City of Duluth, Fond du Lac Band face off in court over downtown land

Duluth city attorneys were in State District Court Thursday seeking a temporary injunction requiring the Fond du Lac Band of Lake Superior Chippewa to withdraw its pending application to place the former Carter Hotel property in trust.

Last November, the band applied to have the U.S. Department of Interior accept an approximately one-acre parcel of land, adjacent to the casino, in trust for the band.

Deputy City Attorney Alison Lutterman argued to Judge Mark Munger that the only meaningful time to control the growth of “Indian Country” in Duluth and prevent the city’s loss of tax base and regulatory control over its land is before a trust application.

In its application to have the parcel transferred to trust, the band said the transfer would be appropriate for “enhancing existing reservation economic activity … and … protecting existing reservation trust resources from the impact of noxious adjacent land use.”

The city filed a breach of contract lawsuit against the band earlier this month, asking more than $50,000 in damages. The city contends that under a 1986 agreement it has sole discretion to disapprove the creation of additional “Indian Country” and that the band shall not create any additional Indian country unless the city approves it.

St. Paul attorney Vanya Hogen represented the Fond du Lac Band at the hearing. Hogen argued that the 1986 agreement was amended in 1994, rendering the city consent requirement unenforceable and giving exclusive jurisdiction to resolve disputes to the federal court. She also said the band has not sought to have land in Duluth made part of its reservation.

City Attorney Gunnar Johnson stated his major concern outside the courtroom after the hearing:

“When land goes into trust it doesn’t go into trust for a year, or for a day; it goes in forever,” he said. “In 1984, when the city worked with the band and agreed to put that first piece of property into trust, it made it so that now the second piece is a much easier process for the band to do that. They’ve stated in their application that they believe they’re entitled to up to one square mile in downtown Duluth. This could go one parcel, the next parcel and continue on and on. The loss of control and the loss of tax revenue is forever.”

Hogen said tribal Chairwoman Karen Diver filed an affidavit stating that the band does not have any present intention to apply to have this parcel proclaimed part of the reservation if its trust application is granted. “So right now all the band is seeking to do is have it taken into trust,” Hogen said.

When asked what having the parcel in trust would enable the band to do, Hogen referred the questioner to Diver.

“It’s a bit of a chicken and an egg thing,” Diver said when reached by phone. “We obviously own the Carter Hotel now. We’ll end up using it for something depending on what the status of the property ends up being in the long term. We could use it for administrative space, a service purpose, or potentially for the expansion of the property. All of that depends on how this shakes out in the next couple of years.”

The band’s answer to the city’s lawsuit said that the Minnesota Agency of the Bureau of Indian Affairs has acknowledged receipt of the transfer to trust application and has just begun the process of review. The band said the trust application process can take from 14 to 36 months to process.

Munger took the matter under advisement and said he would issue his decision on the city’s motion for a temporary injunction as soon as possible.

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