Published On: Fri, May 4th, 2018

Kituwah Economic Development Board discussed by Council





For years, leaders of the Eastern Band of Cherokee Indians have discussed ways to streamline the Tribe’s ability to do business free of governmental constraints.  Last year, Tribal Council passed legislation (Ord. No. 619) paving the way for the Tribe to create LLCs (Limited Liability Companies).  Subsequently, Tribal Council passed Ord. No. 93 in March 2018 which clarified the “regulatory guidelines for the formation and management” of those LLCs.

The Kituwah Economic Development Board (KED) is the first incarnation of a LLC for the Tribe under these new guidelines.  The compensation of the KED Board was discussed during the Budget Council session on the morning of Tuesday, May 1.  Tribal Council tabled Res. No. 189 (2018), submitted by Principal Chief Richard G. Sneed, which outlines the proposed compensation structure for the Board.

Chief Sneed said that instead of having a high salary at the get-go, the proposed structure starts at $25,000 a year and increases as the Board meets certain goals based on their Earnings Before Interest Taxes, Depreciation and Amortization (EBITDA).  The goal amount and subsequent compensation amounts proposed in the resolution are as follows:

  • EBITDA goal of $5 million, compensation $30,000 annually
  • EBITDA goal of $15 million, compensation $40,000 annually
  • EBITDA goal of $50 million, compensation $45,000 annually
  • EBITDA goal of $75 million, compensation $50,000 annually
  • EBITDA goal of $100 million, compensation aligned with both the TCGE and the TGC boards

“The whole purpose and function of that (KED) is economic diversification,” said Chief Sneed.  “It is for the purpose of the Tribe to be able to do business at the speed of business and not at the speed of government.  We’ve missed two or three opportunities to do a data center that had return on investment that at year 10 was yielding close to $20 million a year.  The numbers on that looked tremendous.  But, because of the fact that government moves at a speed that is much slower than business, we missed out on those opportunities.”

He noted that many other federally recognized tribes have already established such enterprise boards which, in turn, start new companies, purchase existing companies, do real estate speculation, etc.  Chief Sneed noted that economic development has been brought up for two decades by various tribal politicians.  “That is the buzzword every election cycle; ‘we need to diversify, ‘we need to diversify.’  But, yet, we have yet to diversify.  So, this board would be the LLC that would do business on behalf of the Tribe.”

He further noted, “What I’m trying to accomplish with this matrix is to change the way that we compensate boards.  My personal opinion – boards in the past have been political candy for lack of a better term.  This actually puts requirements for people who are on the board to have the proper education, experience, and then they have to perform.”

The compensation legislation was tabled for a work session.

During Thursday’s regular session, Tribal Council voted to hold a resolution that would appoint persons to serve on the KED Board.  Ord. No. 93 states that the Board will be comprised of three EBCI tribal members and two persons who are members of other federally recognized tribes.

Several Council representatives said they would like to see more tribal members have the opportunity to be considered for the Board.  Birdtown Rep. Albert Rose asked that the Board’s nominees be brought forth in separate resolutions that could be acted upon individually as opposed to all being on one.

“I’d really like to see it put back out so people can re-apply,” said Rep. Rose, “so, they could be given a chance…there’s a lot of people out in Indian Country that didn’t get a chance to apply.”

He added, “I’m 100 percent for this.  We do need this, but I don’t think we need to jump the gun and just jump all in.  We need to have everything right because one bad move on this and we could be in a bind.”

In other economic news from Tuesday’s Budget Council session, Tribal Council passed Res. No. 190 (2018) authorizing the purchase of 4.83 acres, contained in Cherokee County Parcels 118-C, 118-D, and 89, from Donald Palmer for the price of $2 million.  The property is currently leased to the Tribe and used as a parking area for Harrah’s Cherokee Valley River Casino and Hotel in Murphy.  Jim Owle, TCGE chairman, noted that the property was appraised for $2.4 million.

“It takes us out of that lease and we’re able to own the property,” Owle said on Tuesday who noted the property will most likely be used in future expansions at the site.

Also on Tuesday, Council approved Res. No. 191 (2018) which authorizes the purchase of Parcels Nos. 88-C and 170-C from Davy Arch for the price of $700,000 that will be used as part of an upcoming expansion at Harrah’s Cherokee Casino Resort.  “This is part of the project for the hotel and convention center,” Owle said during discussion.  “This is just part of a piece of property that we need to fix a back road for the back of the hotel and convention center to just complete the project.”