Traverse City Record-Eagle

January 8, 2013

Grand Traverse Band in land trust talks

Potential tax revenue losses cause concern for officials

BY MICHAEL WALTON
mwalton@record-eagle.com

ACME — The Grand Traverse Band of Ottawa and Chippewa Indians wants to place nearly 160 acres in Acme Township in trust, but local municipal officials are worried about revenue losses that would accompany those properties' departure from the tax rolls.

The two land parcels in question sit along the north side of M-72 roughly between Bates Road and the Traverse Bay RV Resort, county documents state. Grand Traverse Resort and Spa owns one of the parcels. The Grand Traverse Band Economic Development Corporation owns the other.

Lands in trust are owned by the federal government on behalf of tribal entities. Local units of government cannot levy taxes on lands in trust.

The federal Bureau of Indian Affairs sent a questionnaire to Acme Township and Grand Traverse County after tribal officials requested to place the parcels into trust.

The parcels generated roughly $19,500 in taxes in 2011, a county response to the bureau states. The county received 15 percent of that money, about $2,900.

The county and township provide services to those properties, ranging from police protection to soil erosion prevention. The county response stated those services will become more costly if the largely unused property develops and increases in value in the near future.

The county also would lose possible tax revenue if the properties are developed while in trust.

"In essence, we oppose any lands being granted 'trust' status without an agreement with the Tribe regarding payment in lieu of taxes/impact fees to the local units of government," county Commissioner Larry Inman said in an email response.

Acme Township's response to the Bureau voiced similar concerns.

Both responses allude to an unfinished 2008 agreement between the county, the township and the tribe. The proposed agreement suggested the tribe pay for continued governmental services and lost tax revenue associated with lands in trust.

John Petoskey, the tribe's general counsel, said the tribal council will consider possible remedies to the local governments' objections. He also said the tribe contributed significant revenue to the local units in the past through the 2 percent allocations.

Twice a year the tribe distributes 2 percent of its electronic gambling revenue to local governments and nonprofits.

Tribal officials last month suggested the three units of government create a committee to discuss possible solutions, instead of approving the proposed agreement from 2008.

"The 2008 tribal council is different from the 2013 tribal council," Petoskey said. "What we are saying is we should engage in this ... discussion so essentially everyone is on the same page."

The committee also would help all three parties understand their long, shared histories, which is an important aspect of successful future cooperation, Petoskey said.

Inman said the county commission will participate in a committee.

"It does not resolve issues regarding land in trust, but it certainly is a starting point," he said. "We want to develop some sort of conceptual agreement before they start developing the property."

Gerald Parish, superintendent of the federal bureau's Michigan agency, said the officials will consider issues raised by the county and the township before ruling on the tribe's application for trust. Each application is evaluated on a case-by-case basis, and Parish would not comment on whether the tribe's application will win approval.

He said the bureau could render a decision in the next three to six months.

Inman said past experience suggests that, once the bureau asks for input from local units of government, an application for trust basically has been approved.

"We get notice for 30 days for commitment, we understand the application is pretty much approved and it is just a formality."