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Wednesday, February 29,2012

Casino referendum brewing

Could Sault Tribe members put a stop to the downtown casino deal?

by Andy Balaskovitz

The chairman of the Sault Ste. Marie Tribe of Chippewa Indians is worried his members will overturn the tribe’s vote to support a downtown Lansing casino, putting an end to over a year’s worth of confidential negotiations and month-long buzz over Kewadin Lansing Casino.

Signatures have been submitted by a former Sault Tribe chairman for a referendum that could overturn the Jan. 24 resolution by the Sault Tribe’s board approving the development agreement with the city to build a downtown casino.

The implications of a referendum worry Sault Tribe Chairman Joe Eitrem because if tribal members overturn the Council’s decision, it means the Sault Tribe essentially backs out of the Kewadin Lansing casino proposal.

“I have real concerns,” he said after a meeting Sunday with Sault Tribe members. “We worked on this for over a year, hundreds of hours. I have concerns they’re going to send it out to a referendum and aren’t familiar with it. I’m scared it may get turned down.

“The point I’m making is: If we send it out to a vote and voters aren’t knowledgeable, I don’t want to take a chance,” Eitrem said.

The main organizer of the petition is Aaron Payment, a former Sault Tribe chairman, who said while he a Lansing casino, he wants more accountability in how the tribe would spend potential revenues from the project, if it gets off the ground.

Particularly, Payment is not satisfied with the plan approved by the Sault Tribe board of directors that allocates 10 percent of the tribe’s annual income from Kewadin Lansing into its “Self-Sufficiency Fund”; 3 percent to various funds for Sault Tribe elders; and 2 percent to establish a scholarship program for Sault Tribe members identical to the Lansing Promise plan for paying for higher education at state institutions for Lansing high school graduates out of casino revenues.

Payment wants to see all of the revenue allocated to specific funds or projects. The referendum would basically ask Sault Tribe members if they would support the project with 100 percent of the revenues allocated, but it also opens up the possibility of Sault Tribe members turning down the project entirely.

“To do that would be just crazy. We can’t tie down funds in that manner. We have to be somewhat flexible,” Eitrem said.

Fearing another Greektown Casino situation — a bankruptcy that the tribe said resulted in a $268 million loss — Payment said the Lansing proposal is big enough to warrant a “vote of the people.” He said he submitted a petition with 180 signatures to the Sault Tribe offices in Sault Ste. Marie on Thursday. He needed 100. The Sault Tribe Election Committee must verify the signatures are legitimate.

While Payment appeared on the City Pulse radio show Jan. 25 to support the proposal — and still generally is a supporter of a Lansing casino — the purpose behind the referendum is accountability.

“I don’t agree with the plan as approved because it doesn’t have a revenue sharing plan” within the tribe, Payment said Sunday. Ultimately, he hopes the tribe devises a more specific plan for spending the revenues, not scrapping the project all together. Yet, he is fully aware of the consequences if tribal voters overturn the board of directors. “I did this as a bargaining chip to pass this, telling the board to approve a revenue sharing plan. It’s very dangerous, high stakes poker. But we can do this the easy way or the hard way. The right of referendum is our guaranteed right.”

The city of Lansing is entitled to 2 1/2 percent of net revenues under the agreement: 2 percent for the Lansing Promise Scholarship program and 1/2 percent for public safety. The Sault Tribe’s attorney, John Wernet, said the developers, Lansing Future LLC, will get the $10 million back that the investment group agreed to pay up front for start-up costs if the casino opens and another 14 percent of net profits for seven years after it opens. After that, the tribe keeps the profits.

Payment served on the Sault Tribe board of directors from 1996 to 2004 and as chairman from 2004 to 2008. He is undecided if he will run for chairman in this summer’s election. Eitrem said he will seek re-election. 

At a tribal member meeting in the Dearborn Hyatt hotel Sunday, Payment appeared to have support among the more than 30 Sault Tribe members in the audience. Several attendees expressed skepticism about another casino idea so soon after Greektown. As Eitrem and Wernet showed confidence in the legal theory they say will allow the tribe to open a casino in Lansing, members were looking for “guarantees” that potential revenue for the tribe would go toward community centers, health services and educational opportunities for members downstate. 

Payment said the referendum would need to be put to a vote within 60 days of the resolution’s approval, which is roughly the end of March. Voting is done by mail-in ballots only. Wernet said the board could amend the resolution it passed in January with seven positive votes. Payment said that is the route he had intended to go, but he went with a referendum after being unable to meet with Eitrem in person to discuss his plans.

Dennis Alexander, a Sault Tribe member from Heartland, was at the Dearborn meeting Sunday. He supports the idea of all Sault Tribe members having a say on the development agreement as drafted. “At the end of the day, everyone is going to have a say in it. … We have a voice — all we can do moving forward is to vote.”

To which Eitrem responded from the podium: “If you vote against it, the whole project would fail.” He went on to address Payment specifically, who was sitting midway to the back of the room: “I don’t know why you’re sending mixed messages,” referring to Payment’s support of the idea but not the development agreement.

“We just need a better proposal,” Payment said.

“Hollow promises are hollow promises,” Alexander followed.

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