Mille Lacs Band closes deal on St. Paul hotels

Beating a drum
(From left to right) Brothers Erik, Bill and Pete Gahbow beat an honor drum in the ballroom of the Crowne Plaza hotel in downtown St. Paul Monday, March 11, 2013 to mark the Mille Lacs Band of Ojibwe's acquisition of that hotel, and the nearby Doubletree hotel, to kick off what they hope will be a nationwide hospitality operation.
MPR Photo/Tim Nelson

The Mille Lacs Band of Ojibwe said this morning that it's officially taken over two downtown St. Paul hotels, but that band is also eyeing properties around the country and may even start its own brand of hotels.

Joe Nayquonabe, CEO of the band's business development arm, talked about the band's ambitions Monday at the 470-room riverside Crowne Plaza hotel, the band's first major expansion off of traditional tribal lands.

"We've already looked at deals in New York City. We're looking at properties in Washington, D.C.," Nayquonabe said. "We're looking at properties here around the metro area. There's really three different locations: St. Paul, Minneapolis, the Mall of America strip. We've looked at all of those locations. We've also looked at some smaller properties in San Antonio, San Francisco and Los Angeles."

The band also bought the 250-room DoubleTree Hotel a few blocks away. Nayquonabe said the band would fund substantial renovations to both. He also said that won't include gambling operations.

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"There are no plans for casinos at these locations," Nayquonabe said. "This investment really represents a diversification for the band beyond gaming, and we're really excited about creating new revenue streams for the band. That's really what this investment is all about."

Joe Nayquonabe
Joe Nayquonabe is the CEO of the Mille Lacs Band of Ojibwe's business development arm, and serves as the band's commissioner of corporate affairs.
MPR Photo/Tim Nelson

The purchase from a real estate holding company was first disclosed in January. Terms of the deal for the two downtown St. Paul hotels weren't disclosed, although the county lists the assessed value of the Crowne Plaza's real estate at about $13 million and the DoubleTree land and building at about $5.5 million.

The deal includes a partnership with Graves Hospitality Corporation, founded by hotelier Jim Graves. The company owns the Graves 601 Hotel in Minneapolis and a number of other properties, and will manage the band's acquistions.

"We will be doing a complete renovation of the rooms and the public space and adding additional food and beverage to this hotel," said Benjamin Graves, president of Graves Hospitality. "We will be bringing a really exciting food and beverage concept to this hotel. We will be adding some bars to this hotel, as well. So we hope that this becomes a hot spot that people will come to it as a destination."

Graves also said that the DoubleTree hotel will get a signature street-level restaurant with an outdoor feature.

He said his company will also be partnering elsewhere with the band, offering consulting and management services for other potential acquisitions, possibly in other states.

Melanie Benjamin
Mille Lacs Band Chief Executive Melanie Benjamin was sworn into office in July 2012. As chief executive, Benjamin leads the band's executive branch that implements band laws and administers programs and services.
MPR Photo/Tim Nelson

Nayquonabe said the new business might include restaurants and casino developements, but would focus on hotels.

"We're looking at it as step number one in really a nationwide strategy to open hospitality assets in all the major markets," Nayquonabe said. "There's a few different ways we're looking at that. We're looking at developing our own brand of boutique hotels that we can take into different markets, again, feeding off the expertise we have in hospitality."

The purchase and upgrades came without taxpayer subsidies, a hallmark of recent real estate development in St. Paul, including the under-construction Penfield project, the Union Depot and the Lofts at Farmer's Market.

"They didn't ask," said Cecile Bedor, the city's director of Planning and Economic Development. "They have a lot of resources, and I think they see this as a great investment. This is a way for the band to not only diversify their interests but to make money themselves. They don't need our cash to do that."

Graves Hospitality and the Mille Lacs Band wouldn't put a dollar figure on the improvements they're planning, but say they hope to have the upgrades to the hotels finished by 2016.