Cherokee joins three-tribe hotel partnership
The Eastern Band of Cherokee Indians will partner with two other Native American tribes and a developer to build a 200-room hotel in Pigeon Forge, expected to open in summer 2023.
The Cherokee will have a 30% stake in the project, as will the Seminole Tribe of Florida and the Mississippi Band of Choctaw Indians . The developer, Memphis-based DreamCatcher Hotels, will have a 10% stake.
The hotel would be the first to be constructed under the DreamCatcher brand, but it would not be the first hotel the company has developed . DreamCatcher intends to franchise a series of hotels over the next five years. The Pigeon Forge project, envisioned in a press release as a “high-end, AAA-rated Four-Diamond hotel,” will feature 12,000 square feet of meeting space and a rooftop restaurant and lounge.
“It is our hope that this will be but one of many economic development projects our tribes can partner on, helping to secure the financial future of our tribes,” Principal Chief Richard Sneed said in the release. “We are grateful for the opportunity as well as the partnership with DreamCatcher as the project developer.”
The project is expected to cost $54.5 million to build, said DreamCatcher Vice President Zeke Cooper during a June 1 Tribal Council discussion . Of that, 72% will be financed through debt and 28% will rely on equity. As a 30% partner, Cherokee will contribute $4.6 million of the equity portion.
Tribal Council approved the historic partnership during a May 6 meeting, with four members voting against the resolution for a weighted vote of 57-43. The resolution allows the tribe to allocate up to $5 million for “equity investments into the legal entity that will own the project.” The resolution also states that all partners must agree to the final project documents, operating agreements and terms prior to expenditure of funds. The property will be held in the name of a newly created economic entity or entities.
The project is the first undertaking to stem from a March 11 resolution creating a new economic entity for the purpose of joint business ventures between the Seminole and the EBCI. The resolution states that the entity will have two representatives from each tribe. The Kituwah Economic Development Board will appoint one of the Cherokee representatives and the Sovereign Wealth Fund LLC will pick the second. Tribal Council approved that resolution unanimously.
While official approval of the resolution concerning DreamCatcher Hotel came on May 6, video of that discussion and subsequent vote is not available. During the June 1 meeting, Chairman Adam Wachacha said he’d received phone calls from representatives of the other members of the partnership who were upset about allegedly slanderous statements made during the discussion. While he’d originally just wanted parts of the discussion deleted that referred to litigation the tribe is involved with, the entire discussion was ultimately wiped, which Wachacha said was a good move.
“We’re going out and meeting all these different tribes and wanting support on issues we’re having, but we’re making statements in here that may push them away, and does that need to go on the air?” he said.
The matter came before Tribal Council again when Birdtown Representative Albert Rose submitted a protest resolution seeking to overturn the decision. After consultation with Legislative Attorney Carolyn West, Wachacha chose not to place the protest on the agenda. The protest was denied, West said, because “it failed to state how the resolution directly impacted Representative Rose.” However, Rose moved to add the protest to the agenda, and that move carried with five members opposed — Vice Chairman David Wolfe, Big Cove Representative Perry Shell, Snowbird Representative Bucky Brown, Birdtown Representative Boyd Owle and Wachacha.
It was after 5 p.m. when Tribal Council began what would become a nearly two-hour-long discussion of Rose’s protest and of the project in general. Rose contended that previous deals with DreamCatcher had “not been the best financially” for the tribe and that “EBCI should not continue to freely invest in DreamCatcher.” The project builds DreamCatcher’s brand and not the EBCI’s, Rose said, and the tribe would be better served if it used its own brand to establish a franchise.
“We don’t need anybody to hold our hand to do this,” he said. “We can do it. We’ve got TERO vendors up there at the casino. They get the same furniture and the same pillows they (DreamCatcher) can get and can get designers to design a hotel. They’re doing it right now.”
Rose pointed out that DreamCatcher is the developer on the casino expansion in Cherokee and on a hotel project at Sequoyah National Golf Club that has yet to break ground, though it had been expected to do so by now. In December, Tribal Council voted to remove Tribal Gaming Commission Enterprise Chairman Jim Owle following the TCGE’s request for an additional $80 million over the originally budgeted $250 million for the casino expansion project.
Principal Chief Richard Sneed told Council that neither situation is DreamCatcher’s fault. The cost overrun at the casino was due to “poor communication” between the TCGE and Tribal Council regarding the impact various design changes would have on the budget, and delays on the golf course project are due to delays in decision-making from the golf board, not due to DreamCatcher’s performance, he said.
Rose also took issue with the fact that the hotel would bear DreamCatcher’s name, rather than a name related to any of the three tribes in on the partnership. In addition, the project wouldn’t have any brand recognition, he said, and would amount to nothing more than “a really nice mom and pop hotel.”
Cooper explained that branded hotels are mainly important when the establishment needs help attracting customers. The brand drives business from patrons who are loyal to that particular flag, but it also takes 12% of the top-line revenue, he said. However, a market study DreamCatcher commissioned shows that Pigeon Forge is a unique market, and that a brand is not necessary to drive visitation.
Besides, Cooper said, the land in question is “the best piece of developable property left in Pigeon Forge that’s not on the Parkway.” It’s adjacent to the LeConte Center and the Cal Ripken Baseball/Softball Experience and will fill a niche for mid-size events of 600-800 people that is lacking in Pigeon Forge.
“The goal of the project was not to do something necessarily with our name on it,” said Sneed. “As it was presented for all three tribes, this is an investment opportunity with double-digit return.”
If all goes well, said Cooper, this could be just the first of many such endeavors.
“There’s a long game here,” he said. “It’s not, ‘We’re going to make one hotel and we’re going to get rich and sit at home.’ That’s not the goal.”
Tensions got high at various points in the long discussion, with some Council members expressing outright distrust of DreamCatcher while others showed frustration at the sometimes circular discussions that members find themselves in when it comes to economic development opportunities.
Wachacha said that he’s been talking with Seminole Tribal Council Chairman Marcellus Osceola Jr. about potential partnerships between the two tribes since first taking office in 2013. At the time, Wachacha said, he was a bit “naïve” about how difficult it would be to broker such an agreement.
Back in early 2020, Cherokee was lobbying the Virginia legislature to write its gaming bill in such a way that the tribe could build a casino on a proposed site just outside of Bristol. Originally, said Wachacha, the Seminole wanted to approach that project as partners with the Cherokee.
“It was the Seminole that came to us and asked if we wanted to be part of it,” he said. “It was our decision to go our own route, and we lost.”
The legislation was never amended to include the property the EBCI hoped to build on, and another developer got the contract.
The hotel project was the next opportunity to come along, and the Seminole are feeling “like they’re burnt a little bit” in developing these partnerships, Wachacha said.
If the EBCI backs out of the Pigeon Forge deal, he said, “I don’t know if we have a partner to move forward after this project. That’s what the Chairman (Osceola) has stated to me.”
“I’ve got partners within this company, and I’ve got partners in this project who said, ‘We’re not interested in doing business with the Eastern Band, because look at the way we have been treated for the past two years,” Cooper added at a later point in the discussion.
However, he said, as someone who lives in and is native to the area, he wanted to bring the project to the Eastern Band first and give the tribe every opportunity to be involved, should it wish to.
Ultimately, Tribal Council voted to kill Rose’s protest in a similar split to the one that passed the original resolution in May. Wolfetown Representatives Chelsea Saunooke and Bo Crowe, as well as Rose, voted against killing the resolution and had also voted against passing it. Yellowhill Representative Tom Wahnetah was the only member to switch sides, voting against the resolution in May but voting to kill the protest in June.
“This has been voted on and it passed, and all I can say is let’s get the project done, let’s get it built and see what happens, and hope there’s no change orders,” he said.
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I believe that was a good investment with the Dream Catcher organization. I just hope the council be smart about this investment because it's (the people's) @#s too. (Just remember that)