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Shopping Centers Today -> November 2002
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NATIVE AMERICANS DRAWN TO RETAIL DEVELOPMENT
By Ian Ritter
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| The Kayenta (Ariz.) Shopping Center is one of several owned by the Navajo Nation. |
The Agua Caliente Development Authority, economic development arm of the Agua Caliente Band of Cahuilla Indians of Palm Springs, Calif., is the latest American Indian organization to join ICSC, as Native Americans increasingly look to retail to diversify tribal income.
The organization, which signed up in July, isn’t building retail properties yet but is looking into buying Palm Springs-area shopping centers.
American Indians are not new to retail development. In the early 1980s the Navajo Nation, which also belongs to ICSC, decided to act because tribe members were leaving their Arizona reservation for their shopping. The tribe, which created a development subsidiary called Navajo Nation Shopping Centers, built its first neighborhood center in 1982 and now has 10 centers on reservation land — six in Arizona and four in New Mexico. Nathan Begay, general manager of Navajo Nation Shopping Centers, said he plans to keep expanding because members still spend 80 cents of every dollar off the reservation.
Increasingly, American Indian businesses and organizations are moving into owning, developing and managing retail real estate properties as an alternative or supplement to their gaming ventures.
“[Gaming proceeds] can be seed money to diversify into other areas where they can create jobs for the community,” said Paul Bresette, president and director of the Bingham Farms, Mich.-based Native American Business Alliance, which facilitates relationships between American Indian-owned enterprises and public and private business entities.
Shopping centers make a better investment right now than, say, Wall Street, observed Stewart Skloff, president of American Indian-owned, Houston-based real estate services firm Idresco. Founded last year, Idresco is also an ICSC member.
In the case of the Navajo Nation, which isn’t in the gaming business, the capital has come from federal government grants. Now the Navajo centers, which range from 15,000 to 110,000 square feet, have done well enough to warrant loans for additional development, Begay said.
Shopping centers create jobs on the reservations, where unemployment is often high.
“It’s one piece of the overall economic development for tribes,” the Native American Business Alliance’s Bresette said.
But among the challenges the tribes face is getting consumers and tenants onto the often remote reservations. National chains often fear they’ll face unfamiliar rules, Bresette said, a fear he insists is usually unfounded. In any event, some tribes are building centers off reservation lands. “If they [tenants] won’t come to the mountain, we’ll take the mountain out there.”
Idresco, which administers triple-net leases, has taken its business even further afield. Some of the company’s 15 offices are in Europe, Asia and South America — among other things, it is seeking space for Wal-Mart in Mexico —and it plans to continue its international thrust.
With its growing interest in retail development, one hurdle American Indian groups must surmount is being the new player in an industry dominated by white, family-owned businesses, Skloff said. “It’s very difficult to get in the door.”
 | Current Issue March 2010 |