Gaming tribes break ground on D.C. hotel

Erica Werner

Monday, March 10, 2003 | 9:44 a.m.

Two Southern California Indian bands in partnership with two tribes from Wisconsin broke ground last week on a $43 million hotel in Washington, D.C., the latest example of tribes reaching beyond casino gambling to diversify their business interests.

Tribal members burned tobacco and blessed the site where the 13-story, 233-room Residence Inn by Marriott will open in the fall of 2004. The hotel will be near the National Mall and three blocks from the future site of the National Museum of the American Indian.

It is the first project undertaken by the four-tribe partnership calling itself Four Fires LLC, which claims to be the largest-ever Indian investment collaboration.

"The significance is the fact that tribes are branching out and doing economic diversification away from gaming," said Deron Marquez, chairman of the San Manuel Band of Mission Indians, one of the Four Fires tribes.

"It's my opinion that gaming is not going to be here forever, so while we have it we've got to diversify and create other cash flows," he said.

San Manuel, which operates a casino in San Bernardino, also has a deal with a high-tech company to provide online access to businesses. The tribe also opened a water-bottling plant last year.

The Viejas Band of Kumeyaay Indians, another member of the partnership, owns an outlet mall and has controlling interest in a bank.

"Sooner or later the pendulum for gaming will swing the other way, and when it does the Viejas Band of Kumeyaay will be diversified in our economy," said tribal chairman Anthony Pico. Viejas operates a casino east of San Diego.

The other Four Fires tribes are the Forest County Potawatomi Community of Wisconsin and the Oneida Tribe of Indians of Wisconsin.

With Indian gambling facing political opposition, many tribes are seeking to invest their casino profits in projects far afield from slot machines, from real estate to ATMs to woodworking.

"Gaming is a relatively uncertain business. We've seen a number of states try to limit Indian gaming and we've seen some states try to shut down Indian gaming," said Stephen Cornell, director of the Udall Center for Studies in Public Policy at the University of Arizona and a co-director of the Harvard Project on American Indian Economic Development.

"I think tribes are acutely aware that the political environment changes, and while a lot of Indian gaming is going forward vigorously right now tribes are savvy enough to realize that securing their long-term economic future means they've got to act in prudent ways, and it's prudent to diversify your economy," Cornell said.

Each tribe contributed $3 million to the hotel project, which is being funded by $20.5 million in investor equity, giving the tribal partnership a $12 million majority stake. Loans accounted for the rest of the funding.

The project is being developed by Donohoe Companies of Washington, D.C., and managed by Hospitality Partners, a D.C.-area firm with 13 other hotels.

Michael Dickens, president and chief executive of Hospitality Partners, said the project is a landmark collaboration between multiple tribes and outside investors off a reservation.

"If you look at it, this really is very much a logical progression for these tribes in terms of diversifying their investment portfolio so that they're not completely dependent on gaming," he said. "And in order to do that they need to do like they've done here."