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| El Paso-owned and proud |
Jul. 25 - Jul. 31
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Tribe unveils new economic engine plan
By Mike Mrkvicka |
 Introducing Tigua Inc.
If all goes as planned, a new, corporate incarnation of the Ysleta del Sur Pueblo will become an economic development engine that diversifies tribal revenue and safeguards its financial future.
Tigua Inc. will assume management of the tribe’s existing businesses – the Running Bear convenience stores and oil distributorship, among others – and identify new investment ventures.
“We have opportunities knocking on our door all the time,” said tribal Lt. Gov. Carlos Hisa.
In past years, opportunities have ranged from an idea to establish a tribal construction company and work at Fort Bliss to an invitation to bid on the purchase of a golf course in Horizon City, he said.
“But we didn’t have the structure or the know-how to take it to the next step,” Hisa said. “That’s what this company is going to do.”
Bent on innovation
Several members of Tigua Inc.’s seven-member board are familiar with business innovation.
• Russell R. Chianelli, a UTEP chemistry professor and director of the Materials Research and Technology Institute, conducts research in applied areas of interest to the energy industry.
• Ebetuel “Beto” Pallares directs the Trans Pecos/El Paso Regional Center of Innovation and Commercialization and helps fledgling high-tech companies apply for equity through the Texas Emerging Technology Fund.
• Karl Maahs and Albert T. Joseph manage Tigua-owned enterprises.
• Esequiel Garcia, Bernardo Gonzales and Dr. Anna Perez are tribal members.
The board has yet to select the company’s chief executive officer.
“We’ll start interviewing this month and make a selection, hopefully, by the end of April,” Hisa said.
Need for new income
The Tiguas have seen better financial days. For years, the tribe basked in relative riches, grossing a reported $60 million a year at the 1,500-slot-machine, adobe-style Speaking Rock Casino.
But that came to an abrupt end in February 2002 when former Texas Atty. Gen. John Cornyn convinced the courts the casino violated state laws and persuaded them to close Speaking Rock.
The loss of gaming revenue forced the tribal government to cut back on services to its members and led to the realization the tribe needed new, non-gaming sources of income.
“We started talking at the tribal council about an economic development corporation. That was about four years, ago,” Hisa said.
Two years ago, the tribe hired one of its own and an MBA, Patricia Riggs, as an economic development specialist to flesh out the concept.
Riggs’ research quickly led the tribe to a remarkably successful model: the Winnebago tribe in eastern Nebraska.
In 1994 and 1995, the Winnebagos took $8 million of casino revenue and invested it in a new economic development company called Ho-Chunk Inc. The name is derived from the Winnebago term for “the people.”
Under the direction of CEO Lance Morgan, a Harvard law school grad who returned to the reservation, the Winnebago company learned how to obtain federal grants and low-interest loans by taking advantage of its tribal status. It created companies to serve tribal members, then branched out.
Today, Ho-Chunk is a $100-million-a-year juggernaut with federal contracts for telecommunications and computer services. It operates motels, gas stations and a manufactured-housing business. According to its 2006 annual report, Ho-Chunk has 584 employees in eight states, Mexico, Iraq and Afghanistan.
In addition to using Ho-Chunk as a model, the Tiguas have been in consultation with its founding CEO, Riggs said.
“We’re very grateful to Lance Morgan because he’s actually gone beyond what any other busy CEO would do. He sees a lot of potential and a lot of commitment in what we are doing. He’s visited the tribe twice. He’s also a partner in a law firm and has helped us establish some of our corporate enterprises – for a fee, of course,” Riggs said.
Morgan is also on the staff of the Harvard Project for American Economic Development, which offers advice on the development of tribal corporations. The project now advises the Tiguas, too.
“They knew we were serious about this,” Riggs said.
Looking for investments
Riggs said the Ysleta del Sur Pueblo has the start-up capital it needs. Without disclosing figures, she said, “we’re in a position to invest a sizeable amount of money.”
But it remains to be determined what will attract Tigua Inc. investment.
“When you look at the businesses other tribes are going into, you see they are in areas where tribes have the competitive advantage, places like federal procurement and federal construction contracts,” Riggs said.
With Fort Bliss in their backyard, it seems only natural the Tiguas would pursue that avenue.
But it’s also clear there are some federal contracts where the Tiguas will take a pass. Employees of a Ho-Chunk Inc. subsidiary pose as civilians on mock battlefields in Indiana so U.S. soldiers can hone their combat skills. It’s not something that appeals to Hisa or Riggs.
“That’s probably something unique to their culture,” Riggs suggested. “In their history, they may have been involved in more battles than we have.”
One hope is that new businesses developed by Tigua Inc. will create jobs that attract the tribe’s 1,600 members.
“We have talent within the tribal membership,” said Tigua Inc. board member Esequiel “Zeke” Garcia.
“Once opportunities for employment show up, we hope to see some of the tribal membership return to El Paso,” he said.
Garcia also hopes putting businesses in place will enable the next generation to go after degrees related to tribal enterprises.
It is not yet known how the tribe’s current businesses will fit into the new plan.
“That’s for the new CEO to decide,” Hisa said. “All I know is that had we gone into those businesses with this structure in place, they would have been more successful than what they are right now.”
Gaming is separate
One business Tigua Inc. will not be involved in: gaming.
That doesn’t mean the tribe isn’t interested in the resumption of gaming revenue.
The Tiguas have a request on file with the U.S. Interior Department to open a new casino on 10 acres just across the New Mexico state line in Chaparral.
The economic development corporation will be separate from any tribal gaming enterprise.
“Sometimes, when you mix business with gaming, gaming is so successful that you don’t really think in terms of profit maximization. So we’re separating it from gaming,” Riggs said.
“That’s something we’ve learned from our studies with the Harvard Program. Harvard has done the math,” she said.
Despite the uncertainties about where the Tigua Inc. will lead, Riggs said the tribal government is enthusiastic about the attempt.
“When I first started working on this project, I thought it was going to be the hardest thing to put before the tribal council. I thought I was going to bang my head against the wall to try to do this. But I didn’t,” Riggs said.
“They were completely supportive. I think they just understood it was time to do something different,” Riggs said.
Comments or questions about this story? E-mail wwpolk@elpasoinc.com
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