The construction site for the McKesson Corporate offices on the Salt River Pima-Maricopa Indian Community. (Photo courtesy of the Salt River Pima-Maricopa Indian Community)
Developing on tribal land: benefits and challenges developers face
Recently, the Salt River Pima-Maricopa Indian Community has been garnering a lot of development buzz.
While developing on tribal lands can be a complex process, developers are taking on the challenges in order to take advantage of other perks associated with building on tribal lands like various tax benefits.
New projects in the Talking Stick area have helped transform the casino destination into an entertainment district, attracting people from across the Valley to enjoy its new amenities.
Topgolf and Salt River Fields made the area more family friendly. The opening of OdySea Aquarium and Dolphinaris last year along with iFLY, an in-door skydiving facility, have cemented the area’s reputation for recreational fun.
Adding to the fun in the sun within the SRPMIC, a bird aviary and hotel are in the planning stages within OdySea’s 35 acres, according to a recent report by the Scottsdale Independent.
There was also talk of the Arizona Coyotes building a new arena on the community, which could spark up again now that the plans for an arena in Tempe are dead in the water.
Pilar Thomas, of counsel at Lewis Roca Rothgerber Christie’s tribal lands practice group, says there are exceptional development opportunities on tribal lands, and developers should be patient, persistent, flexible, respectful and fair.
“Tribes that are looking for development are seeking to promote community and economic development – through job creation, revenue generation and other benefits (a) development may bring,” she says.
For instance, the construction of a 271,000-square-foot office complex for McKesson Corporation that will accommodate 2,200 employees recently broke ground, showing a diverse range of developments that can be found on communities.
Tribes are in a unique position to incentivize development within their communities through tax advantages that are unavailable on state or city owned lands.
For example, Thomas says, some of the tribes do not collect sales or property taxes, or have a lesser tax rate than other cities. There are also tax benefits for employers and reduced taxes on economic activities.
“Depending on the amount of potential taxes, this could be a considerable economic benefit for a project,” Thomas says.
Specifically, the SRPMIC has many benefits when it comes to attracting developers.
The community is centrally located, and has the Loop 101 running through it, says Quannah Dallas, manager of the economic development division at the SRPMIC.
“If you’re looking for raw land, or a lot of acreage, it can be difficult to find in the East Valley,” Dallas says. “That visibility and ease of transportation is something that’s really attractive to the developers.”
Much of the land around the Loop 101 that stretches through the Salt River Community is zoned C3 for general commercial use. Known as the Pima Commercial Corridor, the area has been a magnet for development.
“For us, it’s just brought so many economic opportunities,” Dallas says.
Of course, SRPMIC isn’t the only tribal community to be in build mode.
In Southern Arizona about 60 miles south of Phoenix, the Ak-Chin Indian Community completed updates to its regional airport last May to help the community compete for aviation business.
Then in June, the Ak-Chin Indian Community Tribal Council broke ground on the first phase of its multi-million-dollar expansion of Harrah’s Ak-Chin Casino, which is estimated to cost $100 million.
Negotiating on tribal lands can be a complex process, Thomas says.
Federal law and regulations, likely involvement from the Bureau of Indian Affairs, coupled with waiting on the federal government, makes the negotiations complex, she adds.
First, the Bureau of Indian Affairs has to approve a lease or the Right of Way Act, and implementing regulations apply.
On top of that, federal environmental laws, such as the Clean Water Act and the Endangered Species Act, will be considered by the federal government when deciding whether to approve or deny a lease or Right of Way, Thomas adds.
Another tribal lands expert at Lewis Roca, Associate Frances R. Sjoberg, says the local and state governments may have to be consulted with too in order for development projects to move forward.
Then there’s allotted land, another complex component that developers must consider.
Many tribes have allotted land, which are land parcels that have been given in a family’s name in perpetuity, says Marcelino Flores, former council member of the Pascua Yaqui Tribe and leasing coordinator at Pima Leasing and Finance Corporation.
With allotments, developers have to work out a lease agreement for the development of the land, Flores says. Sometimes there can be multiple owners of an allotted land, and sometimes negotiations have to involve the tribe or the office of the trustee, he adds.
One common misconception the Salt River Community encounters is developers think the tribe owns all of the land within the community, Dallas says.
Individual owners own allotted land, and developers have to work with them to get a land lease.
Dallas says, SRPMIC is very up front about the complexities of the process when developers approach the community.
Interested developers are shown the Salt River Community’s master lease process right from the start.
If the land that they want to develop is tribal land, then developers have to negotiate the lease with the government. If it’s allotted land, then they’ll negotiate with the allotment owners, Dallas says.
Allotments are generally 20-acre parcels, she says, and can have any number of owners who have to approve the lease.
When there’s allotted land, the tribe doesn’t negotiate with the developers, Dallas says, but the tribe does help facilitate negotiations.
Once the lease that conforms with community and federal law is negotiated, Dallas says, then there’s a public hearing process, a review by a land management board (which is similar to a planning and zoning board) and then the elected tribal council needs to approve the lease.
Lately, tribes around the state have been shifting towards creating entertainment districts centered around its casinos as a means of diversifying tribal communities’ economies.
If a tribe wants a development to happen, Flores says, the community will get the ball rolling and it will get rolling easier there than anywhere else.
Flores points towards the Salt River Community developing Salt River Fields as just one example, which broke ground in 2009 to stimulate the local economy.
Blessing McAnlis-Vasquez, marketing project manager for the SRPMIC, says, the Talking Stick area is striving to accommodate all types of visitors.
“Our focus is to make sure everyone is catered to in some way shape or form,” McAnlis-Vasquez adds.
In addition to new amenities near casinos, Flores says many of the casinos in Arizona are starting to hit its 15-20-year mark, spurring major renovations to attract the younger Millennial markets and create an environment of entertainment.
Moving forward, Flores believes tribes need to start shifting towards a more proactive stance to get areas zoned and designated for certain markets, rather than waiting for a developer to approach the community.
Flores describes the proactive approach as “nation building.”
“Some tribes are there,” adds Flores. “I mean, they’ve got it down to, ‘Hey, if you’re going to do a development, you’re going to have the exterior paint fall within this pallet, no bright purple.’ But not all of the communities are there yet.”
Flores thinks the doors to development on tribal lands can still be opened further.