2002: Business - Native Americans seek golf riches

By SCOTT KAUFFMAN

After three consecutive years of record growth, many developers are putting on the brakes when it comes to investing in golf properties. Too many courses, limited financing and flat participation are the main reasons for the slowdown.

Yet there is one group of builders as bullish as ever on course construction: Native Americans.

Once synonymous with casinos and gambling, Native Americans are quickly earning a reputation for clubhouses and golfing. And as long as free land, water and casino-driven cash continue to bless their reservations, Native Americans likely will continue betting their future prosperity on fairways and greens.

From New Mexico to New York, California to Connecticut and Arizona to Minnesota, Native American courses are popping up like wildflowers. To date, there are at least 12 states where Native American tribes are building courses. In all, Native Americans have golf interests in 15 states and Canada.

Though Native Americans may seem unlikely candidates to oversee “a rich white man’s game,” they are winning big at golf in an economic turnabout of sorts. Their success, in part, lies with the unique advantages at their disposal: large land holdings and water rights, no zoning or environmental restrictions, thanks to their “sovereign nation” status, tax-free bond financing and other tax-exempt benefits.

The linchpin behind the Native American’s economic might, of course, is the casino, which provides a constant revenue stream. Consider the following data released in 1999 by the National Gambling Impact Study Commission: In 1988, approximately 70 Indian casinos and bingo halls were operating in 16 states. Ten years later, approximately 260 facilities were operating in 31 states.

Spurred by all this newfound capital, Native Americans are looking for newer and “cleaner” ways to diversify their nest eggs. Golf courses, with their strong connection to the environment, is a natural fit for a people who hold Mother Nature in such high regard.

One of the more ambitious Native American projects is the 36-hole Whirlwind Golf Club at the yet-to-be completed Sheraton Wild Horse Pass Resort and Spa, about 20 miles southwest of Phoenix.

The $125 million project is being built by the Gila River Indian Community and features two Gary Panks-designed courses. The first opened in November 2000 and played host to a Buy.Com Tour event last October, and it will do so again this fall. The second course, a 500-room luxury hotel and 100,000-square-foot conference center are scheduled to open by the end of the year.

“I’ve seen it start up from birth, and then now to see where it is today...it’s just fascinating to see the golf course on the reservation,” says Connie Huenergardt, purchasing agent for the Gila River Indian Community, where her parents were born and raised. “I would’ve never dreamed about it, and that’s why it’s so special.”

Huenergardt said such a business venture today makes all the sense in the world. “It’s economic development and diversification,” she said.

Scott Pierce, construction manager for Tempe, Ariz.-based First Golf Corp., is experiencing that “diversification” full bore in New Mexico. For the past three years, Pierce has been working with the Pueblo of Pojoaque on a new 36-hole resort near Santa Fe, N.M.

The first course, designed by Senior PGA Tour player Hale Irwin and William Phillips, opened this past September. The second course is scheduled to open in late summer 2002.

If all goes as planned, the Pojoaque’s Towa Golf Resort eventually will feature a high-end, convention-type hotel/casino with as many as 800 rooms, according to Pierce.

Pierce says the golf buzz in Indian country is now louder than ever, based on visits to his company’s booths at recent gaming-related shows and conventions.

“Four to five years ago, not many people in tribal areas would have considered it...

Now, we’ll go to one show for 2-3 days, and there might be 40-50 tribes. For 30, (golf) is in the back of their minds.”

It is widely accepted in the industry that Inn of the Mountain Gods, a golf resort in Mescalero, N.M., was the first Native American-built course when it opened in 1975.

Owned by the Mescalero Apache Tribe, the $3 million course is the centerpiece of a $9 million development that now features a 253-room resort, Casino Apache and the nearby Mescalero Inn, comprising 12 condos and a convention and banquet venue.

As Inn of the Mountain Gods course superintendent Frizzell Frizzell Sr. puts it, “We’re no longer going to stay over there, whittle with a stick and try and make bows and arrows.

“Now we’re playing their game,” he says, referring to private developers. “We’re going to try and join you and see if we can beat you.”

The competition is getting stiffer by the year. Consider the magnitude of the following projects:

n Las Vegas Paiute Resort, a 4,000-acre property about 20 minutes northwest of the downtown strip, just opened a third Pete Dye-designed course in November (It was the site of a “Shell’s Wonderful World of Golf” event the following month.). The resort, owned by the Las Vegas Paiute Tribe, is in the midst of a $170 million Phase 2 expansion that ultimately calls for a fourth course and a 300-room casita-style resort, spa and casino.

n The Barona Band of Mission Indians opened a $12 million course called Barona Creek Golf Club in early 2001 near San Diego in Barona. A 400-room hotel and 300,000-square-foot casino is slated to open in 2003, all part of a $225 million development that also will feature a waste-water treatment and recycling plant.

Back on the East Coast, golf development on tribal owned land is happening at an equally impressive pace. The mindset of the Oneida Indian Nation at Turning Stone Casino Resort in Verona, N.Y., is simply to build one of the top resort destinations around. And golf is a major component of that plan, casino officials say.

Two years ago, Turning Stone opened the highly acclaimed Rick Smith/Warren Henderson-designed Shenendoah Golf Club and a high-caliber, nine-hole course called Sandstone Hollow.

The Shenendoah has been in such great demand that Oneida Indian Nation executives announced May 13 that the resort would be adding two more courses – Robert Trent Jones Jr. and Tom Fazio designs – in the next two years.

Not far away in the southeastern part of Connecticut, the Mashantucket Pequot Tribal Nation is about to break ground on a 36-hole Rees Jones-designed layout in the town of North Stonington, to accompany its nearby Foxwoods Resort Casino.

Unlike most other Native American-owned developments, the Mashantucket Pequots’ project is not on reservation property; the course is on land owned by the tribe. That meant the course was subjected to the same environmental permitting and other regulatory issues as any other development.

“We just finished the permitting and environmental work,” Mark O’Neil, a partner with the Middletown, Conn.-based Daylar Group that is helping develop the courses. “It was two years in the making.

“If this was on tribal land, we’d be playing today.

Once it opens, it will operate like most other Native American courses – as a high-end daily-fee and/or resort.

By most accounts, golf course development is fairly new in Indian country, only because large-scale Indian casino gambling is somewhat of a recent phenomenon.

Its origins trace to 1987, when the U.S. Supreme Court in California v. Cabazon Band of Mission Indians held that the state had no authority to apply its regulatory statutes to gambling activities conducted on Indian reservations. A year later, in an effort to provide a regulatory framework for Indian gambling, Congress passed the Indian Gaming Regulatory Act.

These two developments led to a rapid expansion of Indian gambling. From 1988 to 1997, tribal gambling revenues grew more than thirtyfold, from $212 million to $6.7 billion, according to the National Gambling Impact Study Commission. By comparison, revenues from commercial casino gambling roughly doubled from $9.6 billion to $20.5 billion over the same period.

Native Americans now account for approximately 20 percent of all U.S. casino revenues, a mighty number for such a small constituency: There are 554 federally recognized tribes in the United States with approximately 1.65 million members, less than 1 percent of the U.S. population, according to the Bureau of Indian Affairs.

More importantly, this wealth has brought with it real power, according to Benny Shendo, a proud Jemez Pueblo and avid golfer.

“In this country, economics or money plays a big part in politics,” says Shendo, senior manager for Native American programs at the University of New Mexico. “Tribes always had land and water, but not money. Now they’re able to influence politics of the state and how decisions are being made. And people are taking notice.”

Especially in the golf industry.

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