Ho-Chunk Village on the Winnebago Reservation in Nebraska. Photo by Kevin Abourezk

Business | National

Winnebago Tribe takes advantage of new 'Opportunity Zone' designation

Friday, April 27, 2018

'It’s a big deal'

Tribes in Arizona, Montana, Washington and Wisconsin also join new effort
By Kevin Abourezk
@Kevin_Abourezk

Opportunity is a word the Winnebago people know well.

They understand its value, having had so few opportunities to lift themselves up from grinding poverty following the loss of their traditional way of life and ancestral lands in Wisconsin.

For many years, the Winnebago Tribe struggled to develop economic opportunities as it lacked many of the same resources non-Native communities enjoyed, including land that it managed and could use as collateral, as well as access to loans and other financial tools needed to start businesses.

In 1992, the tribe opened a casino and two years later used a portion of its profits to launch an economic development corporation meant to diversify the tribe’s assets.

Now the tribe is seeking to create more opportunity for its people by taking advantage of a federal program designed to attract investors to fund projects in low-income areas.

Recently, Nebraska Gov. Pete Ricketts (R) nominated the county that encompasses most of the Winnebago Reservation as a federal Opportunity Zone, along with 43 other areas in the state.

The U.S. Department of the Treasury has since approved Ricketts’ nominations.

“This announcement builds on the positive news we’ve seen from companies from Nelnet to Wal-Mart, who are reinvesting their tax cuts into their workforce through higher wages and bonuses,” Ricketts said in a statement.

A statue representing one of the 12 clans of the Winnebago Tribe at the Ho-Chunk Village development on the Winnebago Reservation in Nebraska. Photo: Ho-Chunk Community Development Corporation

The Tax Cuts and Jobs Act of 2017 authorized the governor of each U.S. state and territory to nominate a certain number of qualifying census tracts as Opportunity Zones. The act allows each governor to nominate up to 25 percent of the total number of eligible census tracts within a state as Opportunity Zones.

To be eligible as an Opportunity Zone, census tracts must qualify as low-income, according to standards established by the U.S. Treasury.

The program is designed to attract investment in low-income census tracts by offering deferral of capital gains taxes on investments made in eligible Opportunity Zones. The program offers greater tax benefits the longer investors keep their investments in the Opportunity Zones.

Lucas LaRose, corporate counsel for Ho-Chunk Inc., the economic development arm of the Winnebago Tribe, said the establishment of the Winnebago Reservation as an Opportunity Zone could lead to significant economic benefits for the tribe.

“It’s a big deal,” he said. “We’re really excited the governor nominated the reservation for this.”

Ho-Chunk Inc., the Winnebago Tribe and the Ho-Chunk Community Development Corporation (HCCDC) worked together to submit an application to Ricketts seeking to establish the reservation as an Opportunity Zone. HCCDC is a tribally affiliated nonprofit that seeks economic development opportunities for the tribe.

Sam Burrish, communications manager for Ho-Chunk Inc., said the reservation’s designation as an Opportunity Zone will add “another tool to our financial toolbox.”

“It increases our ability to get funding,” he said.

Winnebago was the only reservation in Nebraska nominated to be an Opportunity Zone, though it’s not the only reservation in the country nominated.

While it’s unclear how many governors nominated reservation lands as Opportunity Zones, the governors of Wisconsin, Montana, Arizona and Washington nominated reservation lands.

In Wisconsin, Gov. Scott Walker (R) nominated two reservations – the Lac du Flambeau Reservation and the Lac Courte Oreilles Reservation.

“Right now, more people are employed in our state than ever before in our history, and Wisconsin is at near record lows for unemployment,” Walker said in a statement announcing his nominations, which were approved on April 9.

In Montana, Gov. Steve Bullock (D) nominated seven reservations -- Blackfeet, Crow, Flathead, Fort Belknap, Fort Peck, Northern Cheyenne and Rocky Boy's reservations.

In Arizona, Gov. Doug Ducey (R) nominated the Colorado River Indian Reservation.

In Washington, state leaders decided to give tribes the ability to directly access census tracts. Each of the state’s federally recognized tribes were allowed to nominate one eligible census tract for designation.

Dulcie Greene, stands outside her new home on the Winnebago Reservation in Nebraska on January 28, 2018. She and her husband, Amos Two Bulls, participated in the Winnebago Tribe's down payment assistance program, one of the ways in which the tribe is taking advantage of federal and state opportunities. Photo by Kevin Abourezk

LaRose said he’s hopeful the designation will entice investors to finance projects the Winnebago Tribe already has begun developing.

The tribe is currently considering development on three key parcels, according to the tribe’s application for designation as an Opportunity Zone. Those three parcels are part of 140 acres of land currently being used for agricultural production.

Those parcels will be transformed into mixed-used development, including commercial and office space, light industrial and at least 20 acres that will be used for affordable housing. Those projects serve as the tribe’s primary focus of economic and community development over the next decade, according to the tribe’s application.

Other potential projects include a tribal initiative currently underway that will seek to convert significant thousands acres of agricultural land owned by the tribe to organic farming. That initiative also seeks to foster small, independent agricultural producers who would grow vegetables, fruits and other products for local purchase.

LaRose said, while the tribe’s members stand to benefit greatly from the projects that will be developed through the Opportunity Zone program, the law is also meant to benefit those who invest in reservation economic development.

“They’re the ones who actually enjoy the benefit of the tax deferral and the tax exclusion,” he said.

He said the tribe will now begin identifying potential projects that it can then present to potential investors for funding.

“Hopefully, that entices them,” he said. “We think it will because it has before.”

The Winnebago Tribe has won numerous awards for its economic development efforts, which have included development of a 100-acre, 56-unit housing development known as the Thunder Way Property and the HoChunk Village, a 40-acre, mixed-use development.

LaRose said he would like to see more of those kinds of projects in Winnebago.

“We can really build things that the tribal members need in Winnebago with this benefit,” he said. “There are not a lot of limitations on what you can and cannot do with it in terms of what you can build.”

Ho-Chunk Inc owns Indianz.Com. The website is not involved with the Opportunity Zone program.