Tribes move beyond casinos to malls and concert halls

Native Americans use growing capital funds to underwrite new ventures and diversify economies.

Roberto Rios strolls among napkins and drooping streamers littering an amphitheater on the scrubby desert flats near Tucson. Recently, this trendy outdoor stage welcomed rocker Don Henley. The night before, perennial crooner Tony Bennett drew a jubilant crowd of retirees.

"For some shows, we get a lot of young people," he says. "But last night, much of the crowd consisted of folks in their 70s, people my parents' age, and they were having a wonderful time."

The amphitheater – part American Bandstand, part Hollywood Bowl – is located on the wind-swept sands of the tiny Pascua Yaqui Indian Reservation.

It is symbolic of a new economic thrust taking root on tribal lands across the country. They are moving beyond gambling – in some cases, leveraging casino money – to build everything from retail malls to tourist boutiques. The result is native American tribes that are integrating their economies more with surrounding populations – and perhaps helping to boost living standards on reservation lands.

Here at the 1.8-square-mile Pascua Yaqui Reservation, for instance, tribal leaders are pursuing projects that are creating jobs – and expanding social services ranging from a senior center to a library.

"As our gaming product matures, it becomes more important that we not have all of our eggs in one basket," says Mr. Rios, Pascua Yaqui's development director.

According to the US Census, the number of native American-owned companies grew by more than 80 percent during the 1990s. Indian businesses now number 197,300, employ 298,700 workers, and generate $34 billion in annual revenues.

Indeed, this has become such big business that 1,300 people recently attended a National Summit on Emerging Tribal Economies in downtown Phoenix. The meeting drew business, government, and Indian leaders for four days of networking and brainstorming.

For some time, many tribes have been able to get their economies off the ground via casino ventures. Not only have the successful ones generated revenue, but they've also given tribes political muscle and a quick education in boardroom culture.

"The people of Indian nations are finally rising to a level of sophistication, as far as gaining contacts with businesses, and getting economic development going on tribal land," says Chairman Edward Manuel of the Tohono O'odham Nation, which operates two casinos in Arizona.

As a corollary, the often insular reservations are integrating more closely with surrounding populations. For example, Rios says the Pascua Yaqui designed their $6 million amphitheater to fill a local gap in high-quality, medium-sized venues. "This amphitheater is geared to the Tucson economy, which we are a part of. Economically, there is no magic line where the reservation ends and Tucson begins."

But as lines blur between tribes and outsiders, strong, effective tribal governments become crucial, says Manley Begay of the Harvard Project on American Indian Economic Development in Cambridge, Mass. Tribes that have built efficient governing structures "seem to do better for economic development, because it reduces factional conflicts" that can be exploited by non-Indian business interests, he says.

Mr. Begay also cautions not to paint too rosy a picture when it comes to Indian economic growth. While some tribes have prospered with gaming, many others have not. Begay estimates that unemployment on reservations averages about 50 percent, "and sometimes is up to 90 percent."

But success stories are becoming more common. Among those recounted at the recent Phoenix conference was one about Mescalero Apache Telecommunications. "It's been a long, hard road getting here," company chairman Godfrey Enjady acknowledged to a lunchtime crowd.

Since purchasing a patchwork communications network from GTE last year, the Mescalero have tripled subscriber lines on the 720-square-mile reservation in central New Mexico, and now provide broadband Internet access to more than 90 percent of its rural communities. This was achieved with help from Siemens, the German electronics and engineering giant.

"There are a lot of businesses and entrepreneurial companies like us that are very interested in supporting tribal needs," says Russ Jaskot, Siemens's marketing and development director.

When corporations don't come knocking, many tribes come up with their own innovations. For example, the 2 million-acre Pine Ridge Reservation in South Dakota had fewer than 40 Indian-owned businesses in the mid-'80s. In addition, reservation residents spent more than $70 million off the reservation each year.

Among other obstacles, would-be reservation entrepreneurs were unable to get loans. This credit vacuum led to the creation of the Lakota Fund, a tribally chartered institution that's provided more than $1 million in small-business loans to native Americans since its founding in 1986.

"We lend to people who the banks won't lend to," says executive director Monica Drapeaux. "So far, we've made loans to 500 borrowers. And we know it's had an impact."