Intercontinental St. Paul-Riverfront hotel latest Mille Lacs Band venture
Ben Graves, president of Graves Hospitality; Joe Nayquonabe, CEO of Mille Lacs Corporate Ventures; and Jeff Castillo, vice president of Mille Lacs Corporate Ventures, in the under-renovation Crown Plaza Hotel that will convert later this summer to Intercontinental St. Paul- Riverfront.
By September, the frayed-edged Crowne Plaza Hotel on St. Paul’s downtown Mississippi riverfront will reopen as the overhauled and gleaming InterContinental St. Paul-Riverfront, two years after the Mille Lacs Band of Ojibwe acquired it and the nearby DoubleTree by Hilton for about $35 million from an absentee owner.
The new owner also has invested at least another $35 million in a top-to-bottom renovation that the new hotel manager says will make boosters proud of downtown’s largest hotel. The InterContinental opened in 1966 as a Hilton Hotel.
“We’re bringing it back to its midcentury theme with a modern-day twist,” said Ben Graves, president of Minneapolis-based Graves Hospitality, which also manages the DoubleTree. “Think of the Intercontinental as Don Draper with an iPhone.”
So far, it looks like a shrewd investment.
The Mille Lacs Band acquired 719 hotel rooms in 2013, just as downtown St. Paul was enjoying a renaissance as a commercial, cultural and sports hub with rising hotel occupancy and room rates. The acquisition and renovation costs are about $100,000 per room. That’s a third of the price of a couple premier Minneapolis properties that changed hands over the last year for $300,000 per room.
And the Mille Lacs Band has been welcomed to town by business and political luminaries as a local owner with a long-term vision.
Best known for its Grand Casino Mille Lacs (1991) and Grand Casino Hinckley (1992), the 4,500-member tribe’s St. Paul hotels are its most recent moves to diversify growth from its two casino-hotel complexes.
“Gambling has matured,” said Joe Nayquonabe, CEO of Mille Lacs Corporate Ventures, the tribal-business holding company that operates casino and non-casino businesses. “And we get hospitality. And we’ve been marketing in St. Paul and been part of this chamber of commerce and business community for years.”
Nayquonabe, 33, a soft-spoken man who earned an MBA from the University of Minnesota, started as a promotions intern at Grand Casino. He worked his way up through the ranks. Named to head corporate affairs for Mille Lacs CEO Melanie Benjamin and the band’s board, Nayquonabe has been hailed by Indian Country peers as a leader in economic diversification.
Nayquonabe plans to achieve 15 percent of business revenue from nongaming properties, not including Grand Casino hotels, within a few years.
Just how much money is nebulous. Minnesota Indian tribes, sovereign states that do not pay corporate income or property taxes on on-reservation enterprises, also don’t disclose their revenue. The Mille Lacs Band and the Shakopee Mdewakanton Sioux Community (Mystic Lake complex) are considered the biggest operators among 11 Minnesota tribes that own 18 casino-resorts.
The state’s Indian gaming-hospitality operations altogether produce annual gross revenue of up to $15 billion (before payouts and expenses) and annual operating profits to the 11 tribes of up to $500 million, according to past estimates. The tribes employ more than 20,500 in their operations, according to a 2009 study by the Minnesota Indian Gaming Association.
The Mille Lacs Band, which pays property taxes on its separately incorporated St. Paul hotels, employs 3,500 in its various businesses. Its focus has been investing profits in reservation infrastructure, including utilities, roads, medical centers, schools, training programs and scholarships to technical schools and universities so tribal members can learn and earn.
In an interview, Nayquonabe was flanked by Jeff Castillo, 38, an economic development adviser to the tribe, and Graves, the hotelier who also is a close friend and adviser.
Mille Lacs Corporate Ventures’ has expanded revenue from nongaming interests more than 200 percent since 2012, thanks to the St. Paul hotels and a 236-room Embassy Suites hotel in Oklahoma City. But the tribe will not talk about exact numbers. Nayquonabe is hunting for more hotels, not in bid-up New York or Chicago, but secondary growth markets “where we can find great deals on great properties” and own them for longer than the three-to-five year holding of the typical real estate investment trust.
Nayquonabe also trades on “handshake,” personal relationships in business. He is a graduate of St. Cloud State University. So are Ben Graves and his father, Jim, founder of Graves Hospitality who met Nayquonabe at an awards ceremony at St. Cloud. Ben Graves’ wife, Lindsay, attended high school in Sandstone, Minn., with Chad Germann, owner of Red Circle ad agency in Minneapolis, a member of the Mille Lacs tribe and a confidante to Nayquonabe. Graves was a no-surprise choice to help the tribe with urban hotels.
In May, Corporate Ventures also reopened Eddy’s resort. It acquired the modest, 1960s-vintage resort in 2002 to handle overflow traffic from its Grand Casino hotel. Nayquonabe’s team concluded that Eddy’s could be a growing destination. The band demolished the tired place and spent $10 million on its first ground-up hotel since opening Grand Casino Hinckley.
In recent years, the tribe also has opened or acquired:
• Brand Solutions, a marketing-services company that provides assistance to tribal businesses and a host of other clients, including Allina Hospitals, Anchor Bank and Edina Realty.
• Sweetgrass Media, a commercial print shop that provides services to Grand Casinos and other tribal interests that used to use a variety of outside printers.
• Grindstone Laundry in Hinckley, which processes all the linens for all the Mille Lacs hospitality concerns.
• A medical office in Hinckley, with partners, that serves Grand Casino employees and others from neighboring businesses.
Indian gaming is a big business but it has flattened, according to Nayquonabe. His impoverished elders who started Grand Casino 25 years ago thanks partly to a loan from Twin Cities businessman Lyle Berman, predicted that the gold rush wouldn’t last forever. The next generation is investing in different enterprises.
The typical route for some tribes around the country has been small construction and other businesses that qualify as minority enterprises and government contracts.
Mille Lacs Corporate Ventures doesn’t resemble that model.
“We’re leveraging our financial strength and strength in hospitality,” Nayquonabe said.
Reported by: Startribune.com
By September, the frayed-edged Crowne Plaza Hotel on St. Paul’s downtown Mississippi riverfront will reopen as the overhauled and gleaming InterContinental St. Paul-Riverfront, two years after the Mille Lacs Band of Ojibwe acquired it and the nearby DoubleTree by Hilton for about $35 million from an absentee owner.
The new owner also has invested at least another $35 million in a top-to-bottom renovation that the new hotel manager says will make boosters proud of downtown’s largest hotel. The InterContinental opened in 1966 as a Hilton Hotel.
“We’re bringing it back to its midcentury theme with a modern-day twist,” said Ben Graves, president of Minneapolis-based Graves Hospitality, which also manages the DoubleTree. “Think of the Intercontinental as Don Draper with an iPhone.”
So far, it looks like a shrewd investment.
The Mille Lacs Band acquired 719 hotel rooms in 2013, just as downtown St. Paul was enjoying a renaissance as a commercial, cultural and sports hub with rising hotel occupancy and room rates. The acquisition and renovation costs are about $100,000 per room. That’s a third of the price of a couple premier Minneapolis properties that changed hands over the last year for $300,000 per room.
And the Mille Lacs Band has been welcomed to town by business and political luminaries as a local owner with a long-term vision.
Best known for its Grand Casino Mille Lacs (1991) and Grand Casino Hinckley (1992), the 4,500-member tribe’s St. Paul hotels are its most recent moves to diversify growth from its two casino-hotel complexes.
“Gambling has matured,” said Joe Nayquonabe, CEO of Mille Lacs Corporate Ventures, the tribal-business holding company that operates casino and non-casino businesses. “And we get hospitality. And we’ve been marketing in St. Paul and been part of this chamber of commerce and business community for years.”
Nayquonabe, 33, a soft-spoken man who earned an MBA from the University of Minnesota, started as a promotions intern at Grand Casino. He worked his way up through the ranks. Named to head corporate affairs for Mille Lacs CEO Melanie Benjamin and the band’s board, Nayquonabe has been hailed by Indian Country peers as a leader in economic diversification.
Nayquonabe plans to achieve 15 percent of business revenue from nongaming properties, not including Grand Casino hotels, within a few years.
Just how much money is nebulous. Minnesota Indian tribes, sovereign states that do not pay corporate income or property taxes on on-reservation enterprises, also don’t disclose their revenue. The Mille Lacs Band and the Shakopee Mdewakanton Sioux Community (Mystic Lake complex) are considered the biggest operators among 11 Minnesota tribes that own 18 casino-resorts.
The state’s Indian gaming-hospitality operations altogether produce annual gross revenue of up to $15 billion (before payouts and expenses) and annual operating profits to the 11 tribes of up to $500 million, according to past estimates. The tribes employ more than 20,500 in their operations, according to a 2009 study by the Minnesota Indian Gaming Association.
The Mille Lacs Band, which pays property taxes on its separately incorporated St. Paul hotels, employs 3,500 in its various businesses. Its focus has been investing profits in reservation infrastructure, including utilities, roads, medical centers, schools, training programs and scholarships to technical schools and universities so tribal members can learn and earn.
In an interview, Nayquonabe was flanked by Jeff Castillo, 38, an economic development adviser to the tribe, and Graves, the hotelier who also is a close friend and adviser.
Mille Lacs Corporate Ventures’ has expanded revenue from nongaming interests more than 200 percent since 2012, thanks to the St. Paul hotels and a 236-room Embassy Suites hotel in Oklahoma City. But the tribe will not talk about exact numbers. Nayquonabe is hunting for more hotels, not in bid-up New York or Chicago, but secondary growth markets “where we can find great deals on great properties” and own them for longer than the three-to-five year holding of the typical real estate investment trust.
Nayquonabe also trades on “handshake,” personal relationships in business. He is a graduate of St. Cloud State University. So are Ben Graves and his father, Jim, founder of Graves Hospitality who met Nayquonabe at an awards ceremony at St. Cloud. Ben Graves’ wife, Lindsay, attended high school in Sandstone, Minn., with Chad Germann, owner of Red Circle ad agency in Minneapolis, a member of the Mille Lacs tribe and a confidante to Nayquonabe. Graves was a no-surprise choice to help the tribe with urban hotels.
In May, Corporate Ventures also reopened Eddy’s resort. It acquired the modest, 1960s-vintage resort in 2002 to handle overflow traffic from its Grand Casino hotel. Nayquonabe’s team concluded that Eddy’s could be a growing destination. The band demolished the tired place and spent $10 million on its first ground-up hotel since opening Grand Casino Hinckley.
In recent years, the tribe also has opened or acquired:
• Brand Solutions, a marketing-services company that provides assistance to tribal businesses and a host of other clients, including Allina Hospitals, Anchor Bank and Edina Realty.
• Sweetgrass Media, a commercial print shop that provides services to Grand Casinos and other tribal interests that used to use a variety of outside printers.
• Grindstone Laundry in Hinckley, which processes all the linens for all the Mille Lacs hospitality concerns.
• A medical office in Hinckley, with partners, that serves Grand Casino employees and others from neighboring businesses.
Indian gaming is a big business but it has flattened, according to Nayquonabe. His impoverished elders who started Grand Casino 25 years ago thanks partly to a loan from Twin Cities businessman Lyle Berman, predicted that the gold rush wouldn’t last forever. The next generation is investing in different enterprises.
The typical route for some tribes around the country has been small construction and other businesses that qualify as minority enterprises and government contracts.
Mille Lacs Corporate Ventures doesn’t resemble that model.
“We’re leveraging our financial strength and strength in hospitality,” Nayquonabe said.
Reported by: Startribune.com
