zombie subdivisions

Abandoned Subdivisions Drain Resources From Counties in Colorado, Idaho, Montana, Wyoming and Arizona

“Zombie subdivisions” — some platted but vacant land, others partially built and then abandoned — plague parts of the Intermountain West, siphoning valuable resources from struggling local governments, dragging down property values and causing blight. Millions of these undeveloped lots exist, many requiring public services in remote neighborhoods that generate little tax revenue. The unfinished developments have become the “living dead of the real estate market,” according to a report released Wednesday by the Cambridge, Mass.-based Lincoln Institute of Land Policy. The problem is especially prevalent in states including Idaho, Montana, Wyoming and Arizona — where wide-open spaces and booming economies drew new residents and developers before the recession began.

In Colorado, local planners have done a good job of avoiding the damage of failed development, but the Centennial State still has its share of distressed subdivisions, with large numbers of vacant lots in Eagle and Montrose counties, said Peter Pollock, a former city of Boulder planning director who now is a Lincoln Institute fellow. Many of the current crop of desolate developments were planned before the 2007 recession dealt the country the greatest economic blow since the Great Depression, Pollock said.

“The boom and bust real estate cycle is nothing new in the West,” he said, “but the Great Recession was a noticeable one and it left a lot of premature subdivisions.” Much of the problem results from developers planning for demand that didn’t materialize quickly enough. “Some rural counties don’t have very good planning capacity and they let the developers have at it,” said Martin Zeller, president of Conservation Partners, a Denver conservation planning firm. “The bankers were providing loose lending and (the counties) are very unprepared.”

In Teton County, Idaho, 68 percent of 10,225 parcels are undeveloped. The county, west of the posh Jackson Hole ski area in Wyoming, experienced population growth of almost 70 percent between 2000 and 2010, Pollock said. The growth fueled an exuberant real estate boom, but started subdivisions didn’t attract enough buyers, Pollock said. Teton County has tried to recover by adopting ordinances allowing it to work with developers, landowners, lenders and others to replat troubled developments — in some cases reducing the number of lots. The Lincoln Institute and its partner, and the Sonoran Institute, studied five Colorado counties: Douglas, Eagle, Garfield, Mesa and Montrose.

On Colorado’s Western Slope, about 27 percent of parcels in 2,570 Montrose County subdivisions are undeveloped. Most of the 4,232 undeveloped lots are within Montrose city limits, county planning director Steve White said. “There are definitely subdivisions where there are only one or two homes, and the rest is just weeds,” he said. About 31 percent of 19,363 lots in Eagle County are undeveloped, and in Garfield County 17 percent of 17,271 lots are undeveloped. On the Front Range, 14 percent of 59,904 are undeveloped in Douglas County. Mesa County, which includes the city of Grand Junction, experienced a oil and gas boom in the 1970s that ended with a big bust in the early 1980s, and yet only 12 percent of 52,871 lots are undeveloped today.

County regulations at the time of the oil bust called for developers to provide only a letter from a bank promising it would back infrastructure construction. The collapse of the oil industry hit the county hard, and some subdivisions went into default. Development agreements were unfulfilled in nearly 20 percent of those subdivisions.

“We had several thousand lots that didn’t have completed infrastructure that was required when they were approved,” Mesa County’ planning director Linda Dannenberger said. Some of the developments had drainage and other systems that weren’t working. “Buyers had expectations based on the contracts we had with the developers,” she said. “I did a lot of work with banks, and sometimes property owners, to try to reach solutions to get those subdivisions out of default.”

The county hammered out a new way to guarantee infrastructure improvements — such as roads, drainage, water and sewer — are funded. Now developer’s lenders are to disburse payments according to a schedule which assures the work is completed, Dannenberger said. The county also now requires inspection before developers are paid for the work. It took the county 15 years to fully address the problems caused by the 1980s bust, according to the report. “But the work paid off: During the Great Recession, the county had the lowest ratio of vacant subdivision parcels to total subdivision lots among approximately 50 counties examined in the Intermountain West.”

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Auction.com Has Grown into the Largest Online Real Estate Dealer

On computer screens across the country, bidders sparred for boxer Evander Holyfield’s Georgia estate. The champ had lost his 109-room mansion when he failed to keep up the payments. So Holyfield’s property landed on the block last week at Auction.com.

Forty-four bids into last week’s auction, the clock kicked into final countdown mode. The offers had kept climbing through the afternoon: $3 million, $5 million, $6 million. $6.7 million. The screen flashed green with each new bid, resetting the clock 25 times. Finally, “GOING ONCE” and “GOING TWICE” appeared on the screen. “FINALIZING.” The high bid: $6.98 million. The heavyweight auction of Holyfield’s 12-bedroom, 21-bathroom home was just one of 80 auctions big and small under way that day at Auction.com’s Irvine, Calif., headquarters.

With $26 billion in property sales over the past six years, the company boasts that it has grown into the nation’s largest online real estate dealer. Co-founded by entrepreneurs Jeff Frieden and Rob Friedman, Auction.com caught the wave of bank-owned foreclosures during the recession and flourished while other real estate firms floundered.

On any given day, buyers can find 15,000 to 17,000 homes for sale on the site, with online auctions silently ticking off on computer screens around the globe.

The company employs more than 1,000 people in California, Texas, Florida, New York, London, Berlin, Frankfurt and Madrid, and expects to sell more than 30,000 properties this year.

As the foreclosure crisis winds down, Auction.com is seeking its footing in the post-recession economy, expanding into sales of non-distressed homes, luxury properties and commercial real estate.

In September, Auction.com sold the 372,000-square-foot Savi Tech Center in Yorba Linda. Ed Hernandez, a Cushman & Wakefield agent who represented the seller, said his colleagues were skeptical at first, but found that online transactions can be as efficient and profitable as traditional deals.

“You’ve got these guys bidding on this $50 million asset as if it’s on eBay,” Hernandez said. But, he said, “It worked out great.” Frieden and Friedman now aim to transform the entire real estate process.

Home hunting and price comparisons all are done on the web. Completing the transaction online, they say, is the next step in the evolution, though many agents question whether most shoppers will buy a home on the Internet.

“Our goal,” said Friedman, “is to have everybody buying and selling real estate on our website. Agents, brokers, principals. Everybody’s welcome.”

Auction.com’s co-founders met at a football game when they were seniors at Loara High School in Anaheim, Calif. They bonded over their love of electronics.

The 6-foot-6 Frieden began selling stereo components at the Orange Drive-In swap meet when he was 16. Friedman was selling gadgets at the swap meet, too. By senior year, both had their own booths, getting the type of business training few other teens could match.

“We had like-kind interests,” said Friedman, who at 52 is five months younger — and seven inches shorter — than Frieden. “He was crazy. I was crazier.”

A year or two after graduating from high school, they went into business together, opening a discount stereo store in Anaheim.

Within 18 months, the pair had more outlets of the Stereo Connection, a small chain with other locations in California, in Santa Ana, Westminster and San Diego.

On a weekend in the mid-1980s, Frieden and Friedman hired an auctioneer for a promotion and put their stereos, headphones and components up for sale in an auction at the Westminster store. The owners made about $100,000 from that sale — more in one weekend than they made in an entire month. Frieden and Friedman were hooked on auctions. “It was an ‘aha’ moment,” Friedman said.

Not long after holding that first stereo auction, Friedman signed up for a two-week course at the Western College of Auctioneering in Billings, Mont.

By day, he learned the auctioneer’s singsong patter, practicing with mock sales of brooms, pots and pans. By night, he hit a local bar with classmates who had plans to work at livestock auctions.

When he came home to Orange County, Friedman taught the trade to his partner, and they began their auction careers as a sideline, mostly working charity auctions for the experience.

Frieden and Friedman still might be in the stereo business if a Circuit City hadn’t opened across the street from their Westminster outlet. They figured the days of small stereo retailers were numbered as the big chains moved in.

They sold their business around 1986, and began investing in commercial real estate — car dealerships, strip malls, restaurants. Their first big auction occurred when William Lyon Homes hired the pair to sell furniture from the developer’s models. In 1989, the pair traveled to Australia, where real estate auctions are popular, to learn more about property auctions.

Demand for their auctioneering skills took off after the housing market crashed in 1990. A California developer had 53 homes it couldn’t sell and asked the pair to auction them off. A thousand prospective buyers turned out for Friedman’s and Frieden’s first sale at the Riverside (Calif.) Convention Center. They sold all 53 homes for around $10 million.

Their new company, Real Estate Disposition Corp., or REDC, began selling foreclosed homes, excess builder inventory and commercial buildings throughout the West. By then, Friedman and Frieden were hiring full-time auctioneers to run the sales.

Home auctions died down when the 1990’s recession ended, so the pair concentrated on their other business, auctioning off isolated, low-priced land parcels across the country. But another crash a decade later would bring their venture back to life.

Impac Mortgage Chairman and CEO Joe Tomkinson approached Friedman and Frieden in 2006, proposing to join forces selling a growing number of foreclosures in Southern California.

His firm would seed their company with lender-owned foreclosures, and the partners would stage giant sales in hotel ballrooms and convention centers, salvaging as much value as they could from the steeply devalued properties. Their first sale occurred in May 2007, drawing at least 2,000 would-be buyers to the Los Angeles Convention Center to bid on 300 Southern California homes.

“It’s time to sell, sell, sell some homes,” the auctioneer said, launching the sale.

As the recession hit, Bear Sterns and other lenders with bursting inventories of foreclosures began using the firm, and their business mushroomed. In mid-2008, private equity firm Stone Point Capital became a 50 percent investor, expanding the firm’s contacts on Wall Street and in the commercial real estate industry.

At some point, it dawned on the firm’s leadership that auctions could be just as successful online as in the ballroom, but without the overhead.

Frieden and Friedman paid $1.8 million to buy the Auction.com Web address and changed their company’s name.

“It truly changed us from a company into a brand,” Friedman said.

Auction.com’s listings come from a variety of sources. Lenders sign on to list inventories of bank-owned foreclosures. Real estate agents, even individual homeowners, post their properties. Commercial investors or their brokers come to the site to find bidders for apartment houses, warehouses and office towers.

Foreclosure sales must be held live, whether on the courthouse steps or by sites such as Auction.com. But company officials estimate that 90 percent of its auctions now are online, monitored from Auction.com’s two-story “war room” at its Irvine, Calif., headquarters.

Like traditional sales, buyers get an opportunity to view the homes sold by Auction.com. Sales contracts and disclosure forms are available online for download before a sale.

A clock to the right of each home’s web page tells when the auction begins, the time remaining and the most recent offers.

Buyers pay a deposit. They also must demonstrate they can cover their bids and then if they win pay a “buyers premium” equal to 5 percent of the bid price. Agents who represent buyers and sellers can collect a commission.

Bids are expected to meet the reserve minimum set by the seller. In the Holyfield auction, for example, the $6.98 million final bid didn’t reach the reserve amount, so the outcome of the sale was still unresolved at the end of the week.

Patricia Pope, an agent with Hom Sotheby’s International Realty, used Auction.com last year to sell a Dana Point home that wasn’t moving. It sold in a September 2012 auction for $1.1 million.

“I had a wonderful experience with them,” Pope said. “(The home) got a lot of exposure and it ended up selling.”

But not everyone is happy with Auction.com.

About eight months ago, lender and mortgage servicer Nationstar agreed to bring short sales — or sales under the amount owed on a mortgage — to Auction.com to “validate” an existing buyer’s offer. Auction.com says it gets higher offers in just over half of the “market validation program” sales, averaging almost $39,000 above the agents’ offers.

Some agents, however, complain that the second-guessing is costing them time and, in the case of a buyer’s agent, money.

“It’s crazy,” said agent Fred Malate of Equitable Property Shop in West Covina, Calif., who had to submit an Anaheim short sale for an online auction after finding a buyer in August. “I already have a buyer, and now they want me to find (another) buyer for them. It’s delaying the deal.”

Auction.com still hosts live auctions. House flipper Randi Sue Iggulden of Santa Ana calls Auction.com a “luxury auction” because its foreclosure sales are in a hotel ballroom, with food, tables, chairs and computer screens displaying property details. But Auction.com sales tend to take longer than sales on the concrete walkway outside the Orange County Courthouse.

“They’re always trying to pull higher bids out of people,” Iggulden said.

Huntington Beach, Calif., broker Tom Moon, who specializes in bank-owned properties, said his commissions from selling homes on Auction.com are about half of what he gets from a traditional transaction.

“For the banks, it’s very smart,” Moon said. “But we would prefer to sell it by the traditional method.”

Frieden and Friedman concede they’re making waves, but say sellers often end up getting more for their properties using their service.

“Nothing good comes from selling houses cheaper,” Frieden said.

Agents also have complained that Auction.com drives up prices by making its own bids on properties until the bidding reaches the “reserve,” or the minimum needed for the deal to close. But Auction.com warns bidders on its website that it will be making bids on behalf of its sellers.

“That’s not something we invented,” Friedman said, noting that Sotheby’s and other art auction houses do the same thing.

Auction.com Executive Vice President Rick Sharga estimated the United States has about 2 1/2 million homes in the foreclosure pipeline and that the foreclosure business will continue to be lucrative for about three years. In Europe, distressed sales are expected to last even longer.

Perhaps 300 of the site’s sales this year were non-distressed properties, he said. Auction.com needs more non-distressed homes to thrive.

The company recently began experimenting with a new website, Sold.com, as a possible entre into the non-distressed market.

An estimated $1.5 trillion in U.S. home sales have occurred in the past year, Frieden said. If the company gets just 10 percent of that, that’s $150 billion.

“The percentage of transactions this year and the next year and the year after that will continue to move online,” Frieden said. “Let’s just say we have a lot of room to grow.”

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Geothermal Lease Sales Completed in Churchill and Pershing Counties in Nevada

The U.S. Bureau of Land Management says $13,888 was generated in a competitive geothermal lease sale held Tuesday in Reno.

Four parcels, three in Churchill County and one in Pershing County, were offered for lease. The high bid on each of the four parcels was $2 per acre.

Three were sold to Ormat Nevada and one was sold to Colorado-based Presco Energy.

Geothermal leases are issued for a 10-year primary term. Annual rental for a competitive lease is $2 per acre for the first year, and $3 per acre each year after that through 10 years.

The BLM says additional environmental analysis is required before permits are issued to drill or build a facility to develop the energy from the geothermal source.

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State of Idaho Drops Plan For Priest Lake Land Ownership Exchanges

The State of Idaho has dropped plans for a land exchange program that would give land ownership to up to a fifth of renters around several lakes in the state, the Spokesman-Review reports.

Idaho’s land board had developed the exchanges to alleviate tension between the state and cabin owners, some of whom have been renting their parcels from the state for years. In some cases, these tensions resulted in lawsuits by renters angry about lease and rent rates, prompting the state to get out of the business of renting land to cabin owners.

Specifically, the exchange would have traded 48 cabins on Priest Lake and 10 on Payette Lake for three buildings in Idaho Falls and 11 cabin land parcels on Payette Lake for an office building in Nampa.

But Nov. 12, Department of Lands Director Tom Schultz said that his department had halted the land exchanges.

In October, legal questions were raised about a clause of state law that allows the land board to make exchanges “for similar lands of equal value, public or private.” Schultz told the Spokesman-Review that that first phrase, “similar lands,” has been read as pertaining to “like” uses: Mining land must be changed for mining land, timber land for timber land, etc.

Schultz said his department will need more time to evaluate legal options and resolve the law with a clause in the Idaho Constitution that allows the legislature to exchange state land on an “equal value basis.”

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An Earthtalk Reader Asks Who is Protecting Our Private Lands

Dear EarthTalk: While working to protect public land from resource extraction and development seems to be the focus of many environmental groups, what is being done to preserve and protect private property—the majority of our land—across the country? – Jim Friedland, Bath, ME

Westport, CT – infoZine – E/The Environmental Magazine – Indeed, private property makes up about 60 percent of the total land base across the United States. In 42 states there is more private land than public, and by a wide margin in most cases. (Only Alaska, Nevada, Utah, Idaho, Oregon, Arizona, Wyoming and California have more public land—that is, land owned by a federal, state, county or municipal government—than private.) Of course, all this private land isn’t just the parcels where our houses sit. It includes most commercial, industrial and agricultural lands as well.

What we each do on our own private property may be our own business, but whether and how we take care of it does impact the public good and the health of ecosystems near and far. One way each of us can do our part is by cultivating native plants and landscaping around our homes and businesses to increase habitat for local wildlife. As development slowly but surely swallows up open space, every backyard counts. The National Wildlife Federation’s (NWF’s) Certified Wildlife Habitat program provides homeowners with information and inspiration to make their backyards part of the solution.

Meanwhile, millions of Americans have used local land trusts to put conservation easements on their properties that preclude future development. The Washington, DC-based Land Trust Alliance serves as a clearinghouse for information on obtaining conservation easements and other private land protections through one of the 1,700 local land trusts across the country. And the Virginia-based Nature Conservancy has helped protect upwards of 15 million acres of private land across the U.S. by buying at-risk parcels, putting conservation easements on them and seeing that they are managed sustainably moving forward.

As for conservation on working lands, the American Farmland Trust has helped thousands of farmers and ranchers across the country protect over five million acres of private agricultural and grazing land through conservation easements and other tools designed to limit the conversion to non-agricultural uses.

There are also smaller regionally focused groups that work on private lands conservation. Stewardship Partners works with Washington state homeowners and businesses to restore fish and wildlife habitat, improve water quality, protect open space and “green up” the built environment while maintaining working landscapes of farms, forestland and livable communities. The group has helped hundreds of farms and vineyards across the state identify ways to restore otherwise unproductive lands for the betterment of local ecosystems, and is helping thousands of homeowners across the state install “rain gardens” that utilize rainfall to save water and reduce run-off pollution in and around the Seattle area.

Another pioneering private lands conservation group, the Pacific Forest Trust, works with owners of private forestlands throughout California, Oregon and Washington to preserve working forests and keep sustainable forest practices alive and well in some of the country’s most productive timber forests. To date the group has helped conserve upwards of 50,000 acres of private forestland in the region through conservation easements and other means.



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Latter Day Saints are Bigger than Disney in Florida With 670,000 Acres

The Mormon Church, which already owns about 290,000 acres of land in Florida, is set to become the state’s biggest private landowner with a new deal to buy nearly 383,000 acres spread over nine counties for $565 million.

A Mormon Church’s “tax-paying affiliate,” AgReserves, Inc., “intends to maintain timber and agricultural uses of the lands,” Florida’s real estate firm St. Joe Company says in a statement, announcing the deal.

The land to be sold includes the majority of the firm’s timberlands in Bay, Calhoun, Franklin, Gadsden, Gulf, Jefferson, Leon, Liberty and Wakulla counties.

The deal, which was unanimously approved by the firm’s board of directors as well as by the church’s company, is “subject to customary closing conditions, including regulatory approvals, and the approval of the shareholders of the Company,” the statement adds.

The sale is expected to close in the first quarter of 2014.

AgReserves, which has investment farms and ranches around the world, apparently follows the Mormon teaching which calls for readiness in facing adversaries.

“We have felt that good farms, over a long period, represent a safe investment where the assets of the Church may be preserved and enhanced, while at the same time they are available as an agricultural resource to feed people should there come a time of need,” former president of the Church of Latter Day Saints, Gordon B. Hinckley, says on the AgReserves website.

“AgReserves has demonstrated its commitment to wise land stewardship and prudent resource management during more than 60 years of ranching and agricultural operations in east-central Florida,” Paul Genho, chairman of the AgReserves board, told reporters. “We will apply that same commitment and expertise to managing the property we are acquiring in Florida’s Panhandle. We look to the long term in everything we do.”

The Mormon Church has owned Deseret Ranches, a 290,000 cattle and citrus operation straddling three counties in Central Florida, for over six decades, according to Reuters.

The new deal brings the Mormon Church’s Florida holdings to 672,834 acres, which is about 2 percent of the state’s land mass. This excludes smaller church parcels for its Orlando and South Florida temples and other interests.

The Church of Latter Day Saints also plans to develop a 19,000-acre section of the Deseret Ranches, which is about 10 miles from Orlando International Airport and near the route of the All Aboard Florida privately funded train between Orlando and Miami planned for a 2015 launch.

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Colorado San Luis Valley Solar BLM Land Auction Shows Distinct Lack of Interest

Dusting off its agenda after the weeks-long U.S. government federal shutdown, the U.S. Bureau of Land Management (BLM) last week held its first competitive auction for public lands in designated Solar Energy Zones (SEZ) in Colorado — but nobody offered to buy.

Back in 2010 the U.S. Department of Energy (DOE) had identified “solar energy zones” (SEZ) in six western states, and last fall the Western Solar Plan was finalized into 17 zones spanning nearly 300,000 acres of public land, with combined resources approaching 32 gigawatts (GW). Additional SEZs have since been added in California and Arizona.

After receiving some initial interest specifically in portions of those lands in Colorado, the BLM issued a RFP this spring for three parcels spanning two SEZs in the San Luis Valley across roughly 3,700 acres, with projected solar energy potential of 400 MW. (Colorado has four SEZs in total.) That RFP generated nine applications from five companies, and more than two dozen “expressions of interest.” Minimum bonus bids were set at $63/acre based on rent values and value of interests of applicants — $3,352 for the De Teilla Gulch zone, and $4,035 and $4,284 for the Los Motoges East parcels (north and south, respectively)

When it came time for the live auction last week, however, none of the companies who submitted preliminary applications showed up, according to the BLM. There were other developers in attendance — First Solar, Abengoa, Namaste — some of whom likely are interested in Nevada’s Dry Lake SEZ and wanted to check out the BLM’s auction process, offered Vanessa Lacayo, spokesperson for the BLM’s Colorado office.

Reports suggest any number of reasons for the absence of bids, from lack of clarity in the processes to various policy and financing uncertainties, to questions about transmission access. There are no immediate plans for another auction at this time, but Lacayo emphasized that these specific areas will continue to be available for competitive solar energy development, as will all the SEZs “as long as we continue to get interest.”

The real question is, should we read anything into this lack of interest in the BLM’s first SEZ auction, and extrapolate that into what it means for large-scale solar energy development in general? We heard an awful lot last week at Solar Power International (SPI) about distributed solar generation and all sorts of related topics, from growth in residential and commercial-scale sectors to ongoing debates on net metering and how to value solar energy. Even the utilities honored by SEPA during the show shared strong community solar themes. It did feel like there was less emphasis on megasolar energy development. That could change, though, at next year’s SPI in Las Vegas, in the heart of the U.S. Southwest which has been the nexus of large-scale solar development in the country. Solar energy developers and suppliers we talked with during and after last week’s SPI in Chicago who didn’t have a significant presence there have indicated they’ll be back in full force in Vegas.

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Elko County Considers Transferring Land from Federal Control

Elko County is considering spending up to $15,000 to study the cost and feasibility of transferring various parcels of federally owned land to state control.  The study would be conducted by the Nevada Land Management Task Force, a 17-member board made up of one representative from each county.

The Legislature created the panel this year to study the fiscal impacts of such transfers and identify which ones would make the most sense.

The Elko Daily Free Press reports a consulting firm that did a similar study for Eureka County in the 1990s estimates that studying land transfers over the course of a year could cost more than $66,000.

Dividing the costs equally would cost each county $3,900. But Elko County Manager Rob Stokes says they anticipate some additional costs.

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America’s New Cowboys are Blazing a Path to Make Texas the Future of the Country

It’s big. It’s hot. It’s cheap. And, according to Tyler Cowen, it’s where America’s ‘new cowboys’ are blazing a path for the nation to follow.

The crisis may be over (for the time being) in Washington. But the crisis for America’s middle class continues, as middle-income jobs get harder to find and the cost of living gets harder to bear. Where can Americans turn for answers? In a word: Texas.

In the cover story of this week’s TIME magazine, libertarian economist Tyler Cowen, author of the new book Average Is Over, looks at why so many Americans are headed to the Lone Star State. And he comes to a surprising conclusion. For better or worse, he argues, it’s because Texas is our future.

Based on Cowen’s research, there are 10 reasons why America’s future is going to look a lot more like Texas.

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Disputes Over Expanding Indian Gaming are Increasing as Obama Elimination Bush Era Rules on Native American Casinos

As President Barack Obama began his first term in January 2009, an Arizona Indian tribe saw a long-awaited opportunity to jumpstart a plan to build a 225,000-square-foot casino not far from the Cardinals’ football stadium.

Five years earlier, through a special company, the Tohono O’odham Nation purchased land outside Phoenix, 160 miles north of the tribe’s Sells city headquarters on its Tucson-area reservation. Now, having waited out a freeze on casino construction on property distant from a tribe’s reservation by President George W. Bush’s administration, it submitted the project to Obama’s U.S. Department of the Interior — eight days after Inauguration Day.

Tohono found this White House friendlier. The tribe won initial federal approval and then overcame lawsuits filed by state and local officials and competing tribes. There’s one last obstacle: Congressional legislation that would scuttle the project. The U.S. House today approved the legislation, and it now moves to the Senate.

“The Bush administration would not have gone in this direction,” said Representative Trent Franks, an Arizona Republican who sponsored the bill. “Obama is trying to gain favor with tribal entities. They seem to believe that all of the negatives associated with gambling are subordinate to the political advantage that they believe it brings them by approving these projects.”
Precedent Dispute

The legislation will stop “the precedent of tribes all over the country being able to indiscriminately put casinos up in or near cities,” Franks said.

The Tohono O’odham said in a statement that their project is not precedent-setting because it was sanctioned by earlier federal legislation giving them the right to acquire new land in Maricopa County, where they want to build the casino.

Fights over expanding Indian gaming are breaking out across the country as the Obama administration rolls back Bush-era restrictions on Native Americans, easing their way into the growing $27 billion market.

They include loosening limits on Indian gaming beyond traditional reservation borders, redefining what counts as highly regulated, taxed slot machines, and finding a way around a U.S. Supreme Court ruling that questioned the sovereignty of at least 50 tribes, some of which want to open casinos.

Tribal governments responded by donating more than $2.5 million to Obama and Democratic allies for his re-election, according to the Center for Responsive Politics, a Washington-based organization that tracks political money. They gave less than $500,000 to Republican presidential candidate Mitt Romney and his associated groups.

The community has also spent $85 million on federal lobbying since Obama took office, compared with $146 million during Bush’s two terms, the center’s data shows.

“Obama has been seen as a real friend to the tribes,” said Steven Light, a political science professor at the Grand Forks-based University of North Dakota who studies Indian gaming. “His administration has changed course on some key dimensions of Indian gaming, dimensions that had seemed set under the Bush administration.”
Local Opposition

Kevin Washburn, assistant secretary of Interior for Indian Affairs, addressing a Sept. 11 meeting of the National Congress of American Indians in Washington, said the administration supports tribes’ rights to govern themselves.

“We all know that you can’t do it if you don’t have money,” he said. “We know that you need revenues.” And land into trust, one of the first steps for a gaming project outside a traditional reservation, is “an area where we’ve had the most success, but we’re also seeing so much pushback recently.”

Twenty-five years ago, Congress cleared the way for Indian tribes to tap into the gaming industry as a way to rise out of poverty, passing the Indian Gaming Regulatory Act of 1988.

“Beyond a doubt, gaming has been a net positive for tribes,” said economist Alan Meister, who has studied tribal gaming for more than a decade. “There are variables when it comes to how it has helped each tribe. The advantages haven’t shown up across the board because the underlying problems, such as poverty and health, are so entrenched.”

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