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Reservation has multi-million dollar impact on area economy

Fond du Lac Chairwoman Karen Diver said the ripple effect was one of the things she found most gratifying in a University of Minnesota Duluth's Bureau of Business and Economic Research study on the impact of the reservation businesses on the area...

Fond du Lac Chairwoman Karen Diver said the ripple effect was one of the things she found most gratifying in a University of Minnesota Duluth's Bureau of Business and Economic Research study on the impact of the reservation businesses on the area economy.

"Even though I knew we have been experiencing a growth rate of 5 percent a year for the last 20 years due to gaming," Diver said Tuesday at an event at Black Bear Casino Resort, "I didn't fully take into account the sphere of influence the Band has on the area around us. We haven't done a very good job in the past of talking about what we do and its effect on the local community and economy."

The Band-commissioned study showed the Fond du Lac Band of Lake Superior Chippewa poured more than $300 million into the regional economy in 2011 - and, despite its two casinos, less than half of its economic impact was from tourism.

"What we wanted to capture in the economic impact study was how vital the health of the Fond du Lac Band is to the entire region," Diver said after the talk. "When DEED (Department of Employment and Economic Development) has done similar studies, they only looked at the impact of the casinos. But when we look at the reservation in total - the government and program operations and the enterprises - the economic impact in the region is actually fairly significant."

Reservation businesses include construction, logging, timber, propane, pharmacies, gas and groceries, radio stations and insurance. The band also offers community, health, government and social services, education, housing and a development corporation. All of those activities put money into the economy. An especially high number comes from reservation services, with a $124 million impact in 2011.

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Casino money, Diver said, is used as a "surrogate tax base" to pay for those reservation services.

"It actually leverages more money at that point by bringing in grant dollars, which hires more people and provides more services," she said. "If it weren't for gaming, there would be a huge impact on our eligibility for grant funding, since pretty much everything requires a match. That is a gift to the people of Fond du Lac - that they are able to create a community that invests in its own people and their health and long-term benefit."

The band has about 4,150 enrolled members and employs 2,200 people. Of that number, Diver said, about half of the total number of employees is comprised of tribal members of Fond du Lac or another band and the rest come from the surrounding population. Its payroll, without benefits, is about $63 million and the benefits it pays - which Diver said she is proud to say are "among the best in the area" - total about $18.7 million. The band decided to share financial information because it interacts with so many in the broader community, Diver said.

"Fond du Lac has a role as employers and economic drivers and partners," she said, "and we're not just kind of stuck away in our little corner of Carlton and St. Louis counties."

UMD's Jim Skurla, director of the Bureau of Business and Economic Research, headed up the study. Through its economic impact, the band created 3,600 jobs in the study area of St. Louis, Carlton and Douglas counties, he said. The economic impact of reservation services created 1,900 jobs, and tourism, mostly from the casinos, created about 1,420.

"They are an important part of our economy here," Skurla said of Fond du Lac. A large portion of the money the band spends stays in the area, he said - more than money spent by some other local industries such as aircraft manufacturing because the production materials aren't made here.

"It's kind of a self-enclosed community that's an economic engine in Carlton County," he said.

Ferdinand Martineau said he was surprised by the $300 million number.

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"That's a staggering amount of money," said Martineau, the secretary/treasurer of the band. "There was a time when we were lucky to have a $1 million impact on our local economy, let alone ($300 million) on the regional economy."

Tribal councils have worked toward band self-sufficiency for decades, he said, and there's still work to do.

"But now it's starting to show," he said.

The band's value is evident, said Kelly Zink, executive director of the Cloquet Area of Chamber of Commerce, noting the chamber's tourism office gets many calls about events held at Black Bear Casino Resort.

"We certainly see the impact in Cloquet; there is no question," she said. "Along with the economic impact, they are a good team player with the community. The collaboration that happens with the two communities is wonderful."

Carlton County Commissioner Dick Brenner stated after Tuesday's event that he is encouraged by the economic impact of the Band, adding he hopes the county can work together with the Band to investigate what types of markets and services that possibly could be supplied from right here within the county.

"It would certainly help give the county a leg up in its future economic development initiatives," said Brenner.

Related Topics: CARLTON COUNTY
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