Fond du Lac Band of Ojibwe Chairwoman Karen Diver says the millions of dollars her tribe's casino pays the city of Duluth each year amounts to a "gift" the band isn't inclined to continue giving unless it gets something better in return.
Most people who sit down to play a slot at the Fond-du-Luth Casino probably don't realize a part of their money is going to Duluth -- money responsible for paying for the city's road repair and keeping its credit rating high, among other things.
That's because of a Duluth-Fond du Lac agreement from the 1980s and '90s, when the city allowed downtown property to become federal Indian land. The Fond du Lac band's casino continues to receive police, fire and public works services from Duluth.
In exchange, the city gets
19 percent of gross revenue from the casino's slot machines, money that has created the Community Investment Trust Fund. Interest from that money goes toward city street improvements.
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Last year, about $6.4 million in casino revenue went toward building up the $56 million in the city's Community Investment Trust Fund.
But Diver wants to improve terms for the band, calling the arrangement a "tax" and a "gift."
"If you haven't earned [the money], what else is it?" Diver asked.
The contract with the tribe lasts until 2036, according to city finance manager Genie Stark, but it can be renegotiated as early as next year.
Diver hasn't been shy about her desire to see the contract change. She has made at least two presentations to community groups -- one to Rotary several months ago and another at a Chamber of Commerce lunch this week -- saying that while the city benefits from the deal, the tribe largely doesn't.
"We have essential public services that are provided," she said. "But without those, this really just amounts to a tax ... because we're not getting anything for it.
"Right now we're failing to see the positive impact on the band, given the amount of money that's going out the door to the city," she said.
Duluth Mayor Don Ness believes the agreement has been beneficial for both sides, and not just for the services the city provides the casino.
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"Having a casino in the heart of a downtown with the number of tourists and visitors that we have in Duluth is a tremendous benefit to their operations," Ness said. "The starting point from our standpoint is that this is an agreement that works ... and from our standpoint there's no reason that the agreement should change in any drastic way."
Diver said that she wants the city to put more efforts into the "long-term health of the band," including more resources into development of the downtown area. For example, she said, the band is disappointed that the city hasn't kept its promise to extend the skywalk to the casino.
"When I'm struggling up here with housing issues, health-care issues, education issues, $6.4 million adds up to be a lot of money," she said. "Good things can be done here with that."
Both Diver and Ness said they hoped for respectful negotiations between the two sides, with Ness expecting them to begin sometime early next year.
"The key in these negotiations," Ness said, "is that we start off on the right foot and we have a respectful discussion of our positions, and we lay out the road map as to how we are going to resolve those."
