In his previous role as chairman of Mno-Bmadsen, the non-gaming economic development and investment arm of the Pokagon Band of Potawatomi Indians, Eugene Magnuson was able to help out the tribe of which he and his mother are citizens. In his new position as CEO of Little River Holdings in Manistee, Magnuson gets to leverage that experience in helping advance the economic security of his father’s tribe, the Little River Band of Ottawa Indians. He spoke with MiBiz about his long-term vision for Little River Holdings and the group’s growth strategy.
What attracted you to this position?
My father’s a Little River Band citizen and so are most of my family members. We have more Little River Band members in our family than the Pokagon Band. When the opportunity to come up here and help out my dad’s tribe — I still consider it my tribe even though I’m a member of the Pokagon — I thought that was a perfect fit along with living up here in God’s country, because I’ve always wanted since I was little to live up in this area. And here I am. It’s a perfect, perfect fit.
How does your experience in helping launch Dowagiac-based Mno-Bmadsen prepare you to step into the executive role at Little River Holdings?
We’re kind of a startup; we’re going on to our third year now. With Mno, I started that out from day one. Some of the things that we did with Mno, we are kind of recreating here for Little River. I have the experience of knowing the growing pains at Mno, and that’s a good thing. They’re great growing pains to have.
What are some of your strategies to grow Little River Holdings?
We got our 8(a) designation here in late fall of last year. So as a tribally owned company, federal contracting is essential and our contracting subsidiary will be pursuing opportunities in the Small Business Administration’s 8(a) business development program, and also the Buy Indian Act and HubZones. … Getting the 8(a) status is huge for us. We have people on board and they’ve been working for us for about a year or so. Now that we have the designation, we can go after some of these contracts.
What kind of federal contracts do you plan to target?
The sky’s the limit, but right now, it’s service contracts. We’ll start out small and then we’ll build up. We just want to be able to demonstrate our experience in handling 8(a) contracts and prove ourselves and then we’ll start going after the larger projects.
How do you scale up to take advantage of these contracting opportunities?
It could be a future acquisition. Sometimes there are opportunities to get contracts, however, we don’t have the skill set currently. But by acquiring a company that may have that talent, then we could deploy that talent to pursue a government contract. That’s what some of the 8(a) companies do.
Little River Holdings recently created a new company, Native Source Procurement Services, that leverages an exclusive partnership agreement with Entegra Procurement Services, a division of Sodexo, to offer their buying power for food and other services to tribal entities in the U.S. and Canada. What is the opportunity with this agreement?
This is an agreement that has no precedence. We are partnering with Entegra and we use their pricing and have exclusivity in the U.S. and Canada for all tribal entities. We can go to any tribal entity, utilize Entegra’s prices and see cost avoidance for that client. Native Source Procurement Services will do the sale. When we look on a national scale, we believe there’s roughly $12 billion in food spend throughout the U.S. and we believe we can capture a percentage of that.
We can also provide — in addition to food — cost savings on janitorial services and office supplies, and we could provide managed services. If a (tribal) health care organization or a casino has employees that operate their kitchens, we can put them on our payroll and charge the client a fee to manage their operations. That way, the client can focus on their core business.
What else can we expect to see from Little River Holdings?
We’re from Manistee, Michigan … and we’re looking at developing a mixed-use gateway to downtown Manistee, which is a multi-million dollar project. At the same time, in Fruitport, Michigan … we have what we call Odeno, a 300-unit housing (development). By next year, we’ll probably be going into phase two and we have four phases that we’ll be working. These are really nice homes, they’re market-priced and they’re selling, so we’re pretty proud of that.
What are the tribe’s long-term goals in tribal economic development?
Most every tribe considers gaming as economic development. I get it, but we’re committed to providing an alternative revenue stream that’s non-gaming so that if anything happens to the gaming — which I don’t foresee anytime soon — we want to be able to take care of our people for the next seven generations. To be able to do that, we need alternative revenue streams. Some tribes are understanding that and branched out in non-gaming economic development.
How would you assess the state of tribal economic development among Michigan tribes?
It’s kind of sporadic out in the Native space. There are several nations that do a great job, and then there are many more that have not got into this space. I would say Michigan is right about in the middle as far as other states. I know there’s a nice coalition going on. I guess you could say that there’s safety in numbers. As tribal economic development entities work together, we can be stronger in the state of Michigan. We’re not limited to the state of Michigan. Our charter basically says we can provide economic opportunities worldwide. We’re not just limited to Manistee or Michigan.
Do you see opportunities to co-invest along with other tribal entities or partner with them on projects?
Oh, absolutely; that’s a no-brainer. In the tribal space, a lot of tribes are really solid in a particular area, so why reinvent the wheel when you can partner with somebody? I see that as a viable alternative that we collaborate and put our synergies together and minimize the exposure. Yes, we would do that.