Tribal Government & News
Tribe ready to reap benefits of economic development
Entering its third full year of operation, the Tribe's Economic Development Department is starting to see returns on its investment of time and Tribal funds.
One Tribal investment will start returning a profit on schedule, said Economic Development Director Titu Asghar, and the Tribe's investments are creating job opportunities for Tribal members.
"One of our investments should be returning money next month and on schedule," Asghar said recently in his office on the second floor of the Governance Center. "If things go according to our plan, the Tribe should see a huge pop in three to four years."
The Economic Development Department started in 2011. One of its first goals was to develop a Tribal Council-approved investment policy to guide its activities.
In October 2012, the Tribe purchased a majority stake in Shasta Administrative Services of Redmond, which processes third-party medical claims. "For a fraction of its worth," Asghar said.
In December 2012, the Tribe purchased 20 percent of SAM Medical Products of Wilsonville. The company is known for manufacturing splints that are used worldwide by health care providers.
In addition to those two investments, Economic Development staff worked with the Health and Wellness Clinic to expand its mail-order pharmacy business, enrolling several Pacific Northwest Tribes. This contributed to a 12 percent increase in contract pharmacy services in 2013.
Economic Development also coordinated the installation of an electric car charging station at Grand Ronde Station at no cost to the Tribe in collaboration with the state Department of Transportation.
"We get 6 percent back on the charges," said Economic Projects Coordinator Jilene Mercier, adding that the charging station provides cross marketing opportunities between Spirit Mountain Casino and Grand Ronde Station because owners of electric cars are probably making purchases at the convenience store or walking over to the casino while they wait for their vehicles to fully charge.
In 2013, the Tribe invested in MicroGREEN Polymers of Arlington, Wash. The company makes drinking cups out of recyclable plastic bottles and has seen its business grow as it contracted with several major airline companies.
Along with the investments, the Tribe is creating job opportunities for Tribal members who live throughout the Pacific Northwest. SAM Medical Products has offered seven new jobs to Tribal members and/or spouses at its Wilsonville facility while Shasta has offered nine positions for possible Tribal employees in Redmond.
On July 1, SAM Medical recruited for four positions in Smoke Signals and applications went through the Tribe's Human Resources Department. Asghar said two more positions will be offered by the end of the year.
The Tribe also has been recognized for its "innovative restructuring of deal making," receiving a Deal of the Year Award from the Native American Finance Officers Association in April for its $10 million equity investment in MicroGREEN. The Tribe also has loaned money to the company at a "significant spread," Asghar said.
With the resignation of Finance Officer Julio Martinez earlier this year, Asghar has taken over guiding the Tribe's endowment investments. Besides stocks and bonds, which are public securities, he also received Tribal Council permission to invest in a private equity fund whose performance is not tied to the performance of public securities. This is called an uncorrelated investment.
"The benefit of adding uncorrelated investments in a portfolio such as our size gives us diversification of risks. It spreads our risks," Asghar said, "and provides better protection of Tribal endowments."
Ultimately, Asghar said, the Economic Development Department wants to bring jobs to the Grand Ronde area for Tribal members. Discussions are currently occurring with MicroGREEN Polymers with that goal in mind, he said.
Asghar added that a SAM Medical distribution or assembly plant near Grand Ronde might be a possibility.
"We want to showcase Tribal properties to bring businesses here," he said, adding that the Tribe will fight to not give up Tribal sovereignty in doing so.
Mercier added that the possible positions would be living wage jobs.
In addition, the Chemawa Station project in Keizer, a collaboration between the Grand Ronde and Siletz Tribes, is closing in on its final leg with the selection of a master developer and contractor.
The Tribe's two major real estate holdings - Cherry City Shopping Center in Salem and the Portland office on Southwest Barbur Boulevard - are showing healthy occupancy rates (84 percent and 78 percent, respectively).
"We have a lease in negotiation right now," Asghar said about the Portland office. "We are keeping an eye on other properties in our ceded lands."
Grand Ronde also is looking to expand its economic relationships with other Tribes across the nation, such as the Seminoles in south Florida. "There is definitely a need for Tribe-to-Tribe collaboration on economic development," he said.
While not investing or analyzing possible investments, the Economic Development Department monitors where the Tribe's money has been invested.
"All this is in addition to all of the meetings with all of the investments we have done," Asghar said. "Just because we have put in money does not mean our responsibilities are over. We get monthly financials from SAM, Shasta and MicroGREEN, and now that we have invested in the private equity fund we are going to manage that relationship as well. I sit on all of their boards and attend SAM Medical meetings on a quarterly basis. We are passive investors. We don't dictate terms, but we listen and give our opinion to protect our investments."
Asghar added that he is hopeful that the Securities and Exchange Commission will change an accreditation rule that currently does not allow Tribes to invest money as accredited investors.
"Tribes, for all intents and purposes, are left out of that loop, and as a result some of the investments we wanted to pursue to protect our investments we cannot unless we throw a lot of money at fund managers, which we will are not willing to do. It defeats the purpose of diversification."