Published On: Fri, Jul 10th, 2020

Tribe to enter into business relationship with Innovation Capital, LLC

 

By SCOTT MCKIE B.P.

ONE FEATHER STAFF 

 

The Eastern Band of Cherokee Indians is looking at commercial gaming operations in various states, and Tribal Council has approved a measure to aid in that endeavor.  Tribal Council passed Res. No. 213 (2020), during its regular session on Thursday, July 9, that approves the Tribe “to enter a contract with Innovation Capital, LLC to assist the Tribe in its efforts to expand and diversify its business opportunities, including in gaming and non-gaming industries”. 

Principal Chief Richard G. Sneed, who submitted the legislation, said the impetus behind the engagement with Innovation Capital, LLC is that several surrounding states are currently discussing or have currently begun commercial gaming.  “Over the course of the next five to seven years, there is a potential for approximately anywhere between $150 to $250 million in lost revenue to the Tribe…we have created the Kituwah, LLC and there are opportunities for diversification there, but those opportunities do not present the type of revenue that gaming can produce.”  

He added, “What this (agreement) would do is give us the ability to engage with Innovation Capital, and they would be our advisors, our agents in any potential deals in commercial gaming that we decide to enter into.” 

According to the legislation, Innovation Capital, LLC has done business previously with several other federally recognized tribes including: Poarch Band of Creek Indians, Choctaw Nation, Mashpee Wampanoag Tribe, Lac du Flambeau Band of Lake Superior Chippewa, Seneca Nation, and the Mescalero Apache Tribe.  

“Overall, they (Innovation) have brokered over $9 billion in deals,” said Chief Sneed, “probably the most notable that we’re familiar with is the Poarch Band of Creek with their acquisition of Bethlehem Sands in Pennsylvania and acquisition of two properties in the Caribbean and Aruba that are casino resorts.  They’ve got an excellent track record, and we, by proxy, have already been engaged with Innovation Capital through Caesar’s in the past.”  

Big Cove Rep. Perry Shell asked for clarification between the Kituwah, LLC and the Innovation Capital, LLC group.  

Chief Sneed replied, “This is a limited engagement.  The Kituwah, LLC is actually a corporation owned by the Tribe that does business on behalf of the Tribe.  They’re diversifying into other areas such as real estate, of course the Cardinal Homes project, and some other things that we’re looking at right now that Council is aware of that we have not made public yet.  This is a limited engagement for the purpose of a particular acquisition so if the Tribe were to acquire a commercial gaming property in another state, Innovation Capital would be engaged.”  

Wolftown Rep. Bo Crowe, who voted against the measure, stated that he would like to wait until after the first quarter of FY2021 to see the Tribe’s financial status following the spring 2020 shutdown of Harrah’s Cherokee casinos.  

“This might be something that we might want to put off until January to make sure we do have the money coming in to be able to make purchases…just to make sure that we’re going to be able to afford to do with what we’re being asked to do right now.”  

He made a motion to table and put the project out for an RFP (request for proposals).  This motion did not receive a second.   

Chief Sneed commented, “On the issue of waiting until January, I can assure you that the opportunities that are out there right now are not going to be there in January.”  

Vice Chief Alan B. Ensley said on the proposal, “The point being is if we approve this and any acquisition going forward, it’s going to have to come back before this body before we take action.”  

Yellowhill Rep. Tom Wahnetah said, “I know this is an unprecedented time, and we have all stated that we need to diversify our economy.  Look at the Seminoles in 2006, I’m sure they were worried and scared to death to invest $965 million in the Hard Rock, but now how many billions are they worth now?  If we don’t do something, and these other casinos start popping up around us…we will be looking at 50 percent budgets and start having to cut jobs and services to our people.  I don’t think any of us want to do that or see that happen.”  

Tribal Council Chairman Adam Wachacha said, “I remember something my dad (the late Cherokee County – Snowbird Rep. Abe Wachacha) told me a long time ago because he was one of the ones that made the decision on moving into the gaming field, and it wasn’t a very popular decision, but look at the rewards that our Tribe has been able to reap because of it.  Because of the very few and limited amount of Council members who took that leap of faith, the Tribe has been able to benefit from that for years now.”  

During debate, the legislation was amended to state, “the funding to pay for this engagement shall come from the following account: Governmental Affairs.”  Since no contracts for gaming or other endeavors have been put forth, there is not a funding amount to approve yet.  

The resolution passed as amended by a 9-1 vote with two absent as follows: For – Painttown Rep. Tommye Saunooke, Painttown Rep. Dike Sneed, Wolftown Rep. Chelsea Saunooke, Chairman Adam Wachacha, Vice Chairman David Wolfe, Yellowhill Rep. Tom Wahnetah, Cherokee County – Snowbird Rep. Bucky Brown, Big Cove Reps. Perry Shell and Richard French; Against – Wolftown Rep. Bo Crowe; Absent – Birdtown Reps. Albert Rose and Boyd Owle (both out per COVID-19 protocol). 

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