Working Session

Mayor and City Council Work Session
August 17, 2005 – 5:00 p.m.
A101

Council Members Present: Doug Christensen, Hal Gershman, Gerald Hamerlik (Via Phone), Dorette Kerian.
Council Members Absent: Bob Brooks, Eliot Glassheim, Curt Kreun.
Others Present: Richard Duquette, John Schmisek, Don Shields, Al Grasser, Earl Haugen, John Packett, Dennis Potter, Al Morken, Greg Hoover, Roxanne Fiala. Also Present were: Tu-Uyen Tran of Grand Forks Herald, Guy Useldinger of Grand Forks Gaming, LLC, and Bill Johnson on behalf of the Turtle Mountain Band of Chippewa Indians.

Gershman called the meeting to order at 5:00 p.m. and welcomed the presenters from the Turtle Mountain Band of the Chippewa.

1) Turtle Mountain Update.

Duquette stated that the purpose of the meeting was to update Council on the status of the proposed locating of a casino in the City of Grand Forks by the Turtle Mountain Band of the Chippewa. Bill Johnson stated that he was here on behalf of Chairman Ken Davis who was unable to attend this meeting today because he is on his way to Minneapolis for a united tribes meeting at Mystic Lake. He stated that it has been about 7-8 months since they have met with the City officials and felt it appropriate to bring them up-to-date on progress made on the project thus far. Since that meeting, they have met with the non-profits.

Johnson continued that they have formalized their relationship with the Useldinger Brothers and how they are working together on the project. He stated that Useldingers are planning an approximately 500 acre residential/commercial development located South of 32nd Ave S and West of Columbia Road, of that, they have agreed to convert 40 acres of that to the tribe, which would go into a federal trust for the development of a gaming establishment at that site, with an option to acquire an additional 40 acres at a later date for expansion purposes. He stated that this would be roughly the parcel of land across South Columbia Road from King’s Walk Golf Course. He continued that at this point they are seeking a formal resolution of support from the City. He added that they know there is still much work to be done in finalizing the relationship with the City, including determining proper amounts to be paid in lieu of taxes, for provision of services, and to address specific concerns of charitable groups in Grand Forks. He stated that they will be looking at these items further as they proceed in conducting the project feasibility study.

Johnson informed the council that the preliminary plans are for a casino with 700-1,000 slots and may include at minimum some type of 24-7 restaurant, possibly a lounge and in the future some type of entertainment venue, with possible other future expansion additions to also be explored. He stated that their intent as they move forward is to work closely with the City and make sure that there are no duplication of services between what is planned at the casino development and what is already available in the community. He stated that he could foresee in the future an addition to the casino for a hotel and niche type entertainment venue, but this would only be once it was shown that the market needed additional rooms. He continued that the entertainment venue would be for much smaller acts typical to casinos and should in no way compete with the Alerus Center and the type of entertainment that they book.

Johnson continued that they still have much work to do at both the Federal and State levels. He stated that hey had met with Governor Hoeven and one item he expressed a desire to see was something expressing support from the City for this development. He continued that there was a law passed in 1998 that requires legislative approval for any off reservation gaming sites. He stated that getting this approval is one way for them to move forward on this project. He continued that they also have an existing order which allows them to have one off reservation site and another potential way to proceed would be to seek approval of an amendment to that existing order, which limits their gaming to Rollette County.

Christensen inquired what work was done at this legislative session to try and get the approval to move forward. Johnson replied that they did not work on approval at the session which just completed because they did not feel that they were far enough along in the process to be able to provide the type of information and answers to questions that would come with the request, as most of this information will be worked out as the feasibility study and formal letter of intent are developed.

Christensen stated that the City has some other issues going on right now with concerns from some business owners including the local bingo palace in relation to the passage of the no smoking ordinance. He stressed that he would need to see concrete information to justify that the casino development would be a good economic move for the City before he could vote in favor of a resolution which stated that.

Johnson stated that the tribe has limited financial resources and they are at a point where they need to know that the City is supportive of this development before they proceed with expending any more of these limited funds. He continued that a feasibility study is very costly, especially the impact statement that needs to be done. He added that another item he wanted the Council to be clear on is that only other tribes within 50 miles of the proposed development are allowed to voice an opinion on the development, which is contrary to what they had previously thought, but there is a question over whether Mahnomen falls within that boundary and they need to determine that also as part of the study. He reiterated that due to the costly nature of the project they are at a point where they need to know that the City is in favor of this project moving forward.

Hamerlik stated that he was hearing that they are looking for an endorsement from the City before proceeding and that the Council is looking to hear more information before they commit and that possibly there could be some wording worked out to effect that Council is in favor of proceeding with gathering more information and that maybe changing “preliminary support” to some other words and that at a later date a more detailed resolution with more definite wording could be given.

Christensen stated that he is always in favor of economic development in the community, but he can not agree with this project in that light without more information to back up the claim. He stated that he also is concerned that in supporting this we up front take 40 acres off the tax rolls and that he needs more information on what benefit the City will receive in lieu of the taxes forfeited. Hamerlik stated that is something that has been broadly discussed in the past and will need to be negotiated as the project goes forward. Christensen continued that he felt this needs to be looked at in conjunction with any resolution of support for the project, as if the correct terms are not reached then the deal may not be a benefit for the City. He stated that his preference would be to see in a letter of intent that we get a flat percentage off the gross, rather than off the net, as that is more of a guarantee of funds and one way that will alleviate personal taxes.

Kerian stated that she also believes that the community needs to have enough time to give input into whether the community as a whole is in favor of this project, as there are some that express a concern over whether gaming is a net gain for any community. She continued that while there was one public meeting held several months ago, turnout from the general public was not substantial and could not be used as a guide in how the community members feel about gaming.

Christensen stated that he realizes that one purpose of locating a casino in Grand Forks is to provide a flow of funds to benefit the Turtle Mountain tribe, but that the Council needs to be more concerned with making sure there is a benefit to the citizens of Grand Forks before they endorse the project.

Johnson stated that there is a long road to go before this project is approved as illustrated by the fact that of all applications made, there have only been three exceptions granted to allow casinos on off reservation land and there were 19 that were rejected. He stated that the only way to obtain approval is through Congressional action and that thus far a percentage off the gross is not allowed under federal gaming rules, as the main reason to approve is for the benefit of the tribe.

Johnson stated that the Turtle Mountain Band of Chippewa Indians is the poorest tribe in the state and any agreement that is made needs to be for their benefit. He stated that he agrees that the letter of intent could be worked on at this point, but that would quite probably delay any progress on this project by at least another six months. Johnson expressed that he feels the Tribe has been very respectful in their dealings with the City and has agreed to the timeline and held back on holding discussions on this to accommodate the timing that would be best for the City in the past, but now is running into a timing issue where they need to be able to proceed on overcoming the hurdles that remain and they do not want to waste tribal dollars if there is no support from the City to locate here.

Christensen stated that this meeting came about very quickly and the Council had not received any information prior to the meeting to review as to what the discussion would be and since several months ago there has been no conversations or updates given and he feels this is a large request given the information that is currently available. He also requested that Johnson find out what section of regulations governs the gaming and stipulates that the gross can not be used. He continued that perhaps it would also be appropriate for the City to contract with its own attorney that specializes in indian gaming to represent our interests as the tribe does have a contract with attorneys that are assisting them with their end of the project. He stated that he is not saying he is against or for the proposal, only that he does not have enough information to make a decision at this point and he is in favor of proceeding down the path of gathering more information to support the proposal.

Gershman stated that he was disappointed in the public attendance at the meeting that was held a few months ago to give information on the project. He agreed that there has not been a dialogue with the citizens sufficient to discuss fully the pros and cons of the project and for the Council to be able to get a clear consensus of where the community feelings lie. He stated that he feels for the Council to give “preliminary support” for the project at this time implies that we have reviewed information and listened to the constituents and that is not the case. Gershman added that he feels the Council does want to receive more information and then would have justification to say they support the project. He suggested that perhaps a small group work together with Johnson and his associates to arrive at a language for a resolution that would be acceptable to the City and still meet the needs of the tribe in allowing them to move forward on a state and federal level.

Johnson stated that they were hoping to be able to meet with Governor Hoeven within a month and would be looking for a document from the City saying that the City expresses an interest in the project and wants to explore the potential for this project. Christensen and Gershman expressed that they felt it would be possible to develop some language that would accomplish this and still be acceptable to the City.

Hamerlik agreed that there needs to be more input from the citizens in the community and concurred with the disappointment in the turnout for the last informational meeting that was held. He expressed an interest in learning more about the benefits to the City from this proposal and is in favor of moving forward with gathering more information.

Christensen stated that this appears to be a larger issue than some the Council has addressed lately, such as the 2 a.m. bar closing that took a year to reach consensus on. He stated that he sees the City moving carefully in this resolution until more information about the benefits to and expectations of the City are determined.

Johnson stated that the tribe feels they have been very patient in proceeding at a level that the City is comfortable with and have also had some tribal changes which have held up this project. He stated that they do believe that on some other similar issues such as the Canad development and the water park, that the City made some efforts to keep the project moving forward, which has not been the case with the casino proposal and they now feel the time is appropriate to determine whether or not the City is in fact in support of this project. He continued that the tribe has been able to formalize their partnership with the Useldingers and he realizes there are still issues that need to be addressed with the City, but they need to keep the process moving. He appreciates the City’s willingness to meet and discuss and to want to be comfortable with the arrangement as the project progresses.

Christensen stated that he is getting the impression that this project may not be able to progress without the resolution of support. Hamerlik commented that a letter of support has been requested in the past, in particular at the time the presentation was made at Council, but this is the first time that a draft resolution was requested. Christensen asked whether the Governor requested this resolution. Johnson stated that the Governor did not specifically asking for this, but it would be helpful and will be necessary as they move forward at the federal level. Christensen inquired whether a letter stating a concurrence to keep gathering information would be sufficient.

Johnson stated that the urgency is that there may be a move to make some changes within the next year at the federal level in Section 2719 of the Indian Gaming Act, which regulates off reservation gaming. Johnson stated that he hopes that within 18 months they can receive both federal and state approval, as there are a number of avenues they can use to get state approval even with the legislature out of session.

Kerian made some suggestions for potential wording changes that perhaps would meet the needs of both parties. Gershman stated that they will keep those suggestions in mind as they work on a draft document. He reiterated that he is very curious about the potential in this project, but needs to temper that with a need for input from the public.

Johnson stated that he has only spoken with one person negative to this project and two that are concerned because they feel they may have something to loose if the casino project goes forward, which is a normal fear of change and they are asking for support in being able to go forward with their information gathering and being able to answer those concerns.

Gershman stated that the Council will work on some wording that they are comfortable with and get a draft of that to Johnson so they can proceed with that. Hamerlik inquired about the timeline, as he agrees that everyone seems to be interested in at least finding out more about the project and potential benefits for the City so if that is the wording, then it should be able to be accomplished sooner than 2-3 weeks. Christensen asked if there was a particular reason to move quickly on this.

Johnson stated that the had hoped to bring more information back to the Governor within a month and then be prepared to move with their submission to the Department of Interior as quickly as possible. He stated that they have a strong feeling of being able to be successful at the federal level and will need to be able to demonstrate they have City support to be successful. He stated that at the Federal level the rules are very black and white unless some rules change and therefore they strongly feel they will prevail at that level and it will go back to the Governor’s shoulders and the State at which they have a few different avenues that they can pursue to get approval.

The group agreed to work on drafting language for a document in support of continued work on the project and appeared to move toward adjourning the meeting.

(Hamerlik was disconnected from conference call assuming the meeting is adjourned at 6:07 p.m.)

(There is no longer a quorum present.)

Johnson stated that prior to actual adjournment he wanted to summarize his understanding of the City’s position. He stated that he heard that the City will draft a resolution and send to the Turtle Mountain Tribe for review and then they will work together to get mutually satisfactory wording, and that in general it will be a very soft worded approval to proceed gathering information.

Johnson continued that he will need a more firm resolution and possibly a more formal letter of intent to be worked out probably within the next 60 days to be forwarded with their submission to the Department of the Interior. He stated that they can not wait at least 18 months to make that submission as they want to receive approval at federal level before any legislative rule changes can be made that would impact this project. Christensen stated that the City would have a concern with that and if that is the case, as the City has not yet retained an attorney specializing in this type of agreement to work on our behalf in negotiating this agreement and that they have not been made aware of this timeline until now. Johnson clarified that is they at least have a resolution showing strong support and maybe then can wait a little bit on the letter of intent, but if they have to wait at least six months for that it will hold up the project again. Johnson stated that they really need to have the strong letter of support within the 60 days and the letter of intent as soon as possible, knowing that there could be changes made to the terms of the letter of intent before a final one is signed.

Christensen continued that for now the City will work on this initial show of interest document, showing soft interest in the project and then work forward based on the information provided today.

2) Other.

Meeting adjourned at 6:15 p.m.

Respectfully Submitted,

Sherie Lundmark
Admin Specialist Sr.