Tiny tribe stops battling US long enough to succeed in hotel business. Kootenai Indians avoid extinction and win a US merit award in the process

When Gordon Cannon heard that the Kootenai Indian Tribe wanted to open a hotel in this small northern Idaho town a few years ago, he was not enthusiastic. After all, the town of 2,000 people already offered several rustic motels to travelers en route to nearby British Columbia. And with only 67 members south of the international border, the Kootenai tribe hardly had the manpower to pull off such an ambitious project.

``My first reaction was, `Another Indian motel, another dog in the making,''' Mr. Cannon, superintendent of the Bureau of Indian Affairs' (BIA) North Idaho Agency, told tribal members and federal dignitaries recently.

``But as I watched the construction, I changed my mind.''

The tribe opened a 48-room inn two years ago on the banks of the wild Kootenai River, the resort's namesake. After the hotel's first year, the Best Western hospitality chain named the Kootenai River Inn the best in its worldwide line.

The Kootenais are not the first tribe to delve into the business world, though they are the smallest. In the 14 years since the federal Indian Finance Act became law, tribal-owned-and-operated resorts, farms, factories, automotive plants, stores, and sawmills have spread throughout the nation.

The finance act provided the BIA with money to help tribes go into business. It was an effort to reduce Indian unemployment rates that reached 70 percent in some areas, says Charlie Moses, business officer for the BIA's Portland, Ore., office.

In Oklahoma, the Cherokee Nation operates a defense subcontracting plant as one of its many business ventures. The Seminoles in Florida used some of the $10 million they net annually from bingo operations to build a 156-room hotel. And the Warm Springs Tribe of Oregon turned a small hot springs park into a multimillion-dollar resort.

But for each tribal success, there have been a dozen failures.

``I could talk and talk on failure,'' says Mr. Moses. ``But things don't fail as much as they take a long time to die because we keep giving them transfusions of money. Like fishing boats - we've lost 50 percent of those loans.''

The tribes with successful businesses have resisted the urge to operate the ventures themselves, Moses says. Those tribes have hired knowledgeable and typically non-Indian managers, let them do their jobs and learned from them.

By following such a system, tribal unemployment rates rarely drop quickly. But business-minded tribes seem willing to forgo immediate gratification for long-term stability.

Tribes have also had problems with financial projections. Too many are overly optimistic about the profits their ventures will reap in the first years and run out of operating funds, Moses says.

Like large tribes, Idaho's smaller group of Kootenais entered the business world to prevent extinction. So successful was their work that the tribe recently received a national merit award from the US Department of Housing and Urban Development.

The Kootenais are the first tribe to receive the federal honor.

``This [inn] is a perfect example of a partnership between the private and the public sector,'' says William Nishimura, HUD's Northwest regional administrator.

For the tribe that has quietly but formally waged land-claims war with the United States since 1974, the national recognition of its business acumen is one small battle won.

Troubled by alcoholism, disease, and victimization, the once-numerous Kootenais had just 67 Idaho members left by 1974. They had lost all but 12 acres of their land, many of their children, and their pride. The declaration of war was a desperation move that, in one sense, worked.

Kootenai children who had grown up in white foster homes or boarding schools in the 1960s returned home when the the legal dispute hit the news.

Dismayed at the depleted condition of their tribe, the grown children took control. Chief Raymond Abraham, then 18, and his council immediately created a tribal survival plan that included the construction of a motel.

Chief Abraham included surrounding governments in planning sessions. With the local economy floundering from the decline of the timber industry, the project that promised 50 new jobs was solidly supported by non-Indians.

The Kootenais funded the $2.5 million project with loans and grants, and a business agreement with northern Idaho's most successful resort developer and operator. As part of that agreement, the Kootenais learned from the developer how to operate their business and keep it profitable.

With its pools, whirlpools, weight room, and enlarged bathtubs, the Kootenai River Inn gives travelers a reason to stop in the oft-bypassed river town. The inn has the only restaurant in town that serves liquor.

Few Kootenais work at the inn, but ``it's for my younger generation,'' the chief says. ``We've never thought of college before, because there was nothing here. Now there is and it's a reason to come back.''

At least two Kootenai teen-agers plan careers in hotel management. And the inn has made the only people indigenous to the area an accepted and respected part of the community.

``There have been Native American motel/hotel developments,'' says Bob Scalia, HUD's Northwest regional director of operational support in Seattle, Wash.

``I don't think any would be rated more successful than the Kootenai project. It's a first-class operation.''