AP The Wire
Where does money go?
The winning gamblers
Branching out with little success
From swamp safaris to turtle farms, the tribe loses millions despite tax advantages.
By JEFF TESTERMAN
Times Staff Writers
The Seminole tribe has spent millions of dollars in an effort to diversify its economy beyond gambling.
The tribe has established businesses across Florida that provide hundreds of jobs for tribal members and non-Seminoles. But financial documents obtained by the Times show that few of the new ventures turn a profit.
"A lot of them have been trial and error," Chairman James Billie acknowledged. "Quite a few things we tried did not succeed."
The tribe's lack of success has occurred despite unusual competitive advantages. As a sovereign nation, the tribe pays little or no property taxes. Until this year, when the state went to court to close a loophole, it paid no state sales tax on the purchase of goods and equipment.
The tribe spent $3-million in 1995-96 to take over a 40,000-square-foot hangar in Fort Pierce. Ambitious plans call for the manufacture of a sporty two-seat plane called the SP-20 that is reminiscent of World War II fighter planes. The 180-mph aircraft would be sold for as much as $149,500.
So far, however, workers have not produced a single SP-20. The Federal Aviation Administration granted the aircraft an "experimental airworthiness certificate" on Nov. 18, allowing the company to make flight tests.
F. Dewitt Beckett, who once flew crop-dusters in Florida, oversees the 36-employee plant. Beckett is confident the FAA will approve the SP-20 in a few months, and said the company has orders for 20 planes.
The aircraft business is called Micco, which means leader to the Seminoles. It's also the name of Billie's son. The president of Micco is Max Osceola Jr., a member of the Seminole Tribal Council. Osceola, who has no aviation experience or even an office at the airplane factory, is paid $80,000 a year by the company.
"He doesn't know a damn thing about airplanes," said Billie. "But Max does know marketing, all those types of things."
The National Cattlemen's Beef Association lists the Seminole tribe as the owner of the 11th-largest cattle operation in the nation. The tribe has 10,500 head divided between two ranches composing 25,000 acres of grazing land.
Some tribal members have small cattle-ranching operations that are profitable. But neither the tribe nor Billie, who owns 100 head, is turning a profit in the cattle business. "It's never made money," Billie said.
Employing 44 people, the Billie Swamp Safari offers tourists a ride on swamp buggies through the Seminoles' 52,000-acre Big Cypress reservation in the Everglades. Tourists might see deer, bison, alligators, southern Razorback hogs and maybe even a Florida panther. Hunters can stalk hogs, deer, quail, dove and wild turkey -- no license required.
Despite an influx of German tourists, the safaris and hunting tours lost $2.2-million last year.
Big Cypress businesses
Hunters who bag a boar on the reservation can leave with fresh pork, sausage and ham for $45. The butchering is done at the Big Cypress Processing Plant, a 2-year-old facility that employs up to six people. The tribe slaughters its cattle there, and sometimes has alligator fileted, said plant manager Boe Davis.
The plant also turns out $1.25 beef sticks called "Chief's Jerky," which bear the likeness of Seminole Chief Osceola. And it produces 8-ounce tins of spice with Billie's visage called Seminole Swamp Seasoning. Davis said the seasoning is blended at a plant in Maryland and re-packaged in Big Cypress.
Davis said the seasoning can be found at Disney World and "sells good all over the country."
The processing plant lost $163,686 in the first six months of fiscal year 1996-97. Other Seminole businesses at Big Cypress haven't fared much better. Together, the campground, Entertainment and Rodeo Grounds and Swamp Water Cafe lost $884,102 in 1995-96.
Located near Lake Okeechobee on the Brighton reservation, the 500-acre farm consists of 38 rectangular ponds and a few dilapidated buildings.
Turtles are born in an air-conditioned hatchery and adults are harvested from the sludge-lined ponds. Robert Bowman, the farm's assistant manager, is guarded about who buys the live turtles, but he says they "go all over the country."
Tribal documents show that the farm lost $289,597 in 1996, and is on pace to lose more than twice as much this year. The tribe's comptroller has called the Brighton turtle farm one of the largest of its kind and says it could prove to be very profitable.
The farm was the site of an abortive attempt at catfish harvesting, begun in the late 1970s after the tribe obtained federal grants.
The Seminoles grow lemons, grapefruit, oranges, peppers, cucumbers and squash on the fertile land between Lake Okeechobee and the Everglades.
The citrus groves lost $202,756 in the first half of fiscal year 1996-97 and the vegetable division, Seminole Brand Farms, did worse. It was $3.9-million in the red, with production and harvesting expenses nearly six-times higher than sales.
Expenses include a $1-million management fee. Until recently, the manager of the Seminole Brand farms was Roy Pippin of Plant City, whose own farm went broke six years ago. Pippin filed for Chapter 7 bankruptcy, claiming debts of $6.18-million and assets of just $720. Pippin's contract was terminated, Billie said, because "he didn't produce like he thought he was going to produce."
Billie blamed the North American Free Trade Act for the woes of Seminole Brand Farms, saying the trade agreement has resulted in local farm prices being undercut.
The tribe owns the 276-room Four Points Tampa East Hotel next to the Tampa casino on Interstate 4. The Times was unable to obtain financial data on the hotel, but Sterling Howard, general manager of the Four Points, says it does "very well."
In March 1996, the tribe purchased for $2.15-million a 96-room Day's Inn motel and restaurant in Bahia Beach, on Tampa Bay's eastern shore near Ruskin. The property includes tennis courts, a private beach and a 42-slip marina. The tribe is spending up to $4-million on renovations, Howard said, and views the property as a resort destination.
The Four Points hotel, assessed at $9.25-million, would normally see a property tax bill in excess of $230,000. But the hotel is located on reservation land and is therefore tax-exempt. The Bahia Beach property, which is not on reservation property, remains on the county tax rolls and is assessed at $1.94-million.
Cellular phone towers
Billie described this venture to the Times as an example of a Seminole business making money.
The Seminoles have agreements with GTE in Collier County and with Bell South in Indian River County to lease sites for cellular phone towers. Tribal attorney Jim Shore said the contracts did not require investment of tribal capital and that "some revenues" are now coming in from the GTE deal.
The tribe opened a 10-employee rope manufacturing factory in Immokalee in 1996 and markets its product to ranchers and rodeo riders. Factory founder Benny Motlow said every rope is spun from twine and undergoes "at least 15 meticulous inspections" before being sold, according to the tribe's newspaper. The factory showed a loss of $155,525 in the first half of fiscal year 1996-97.
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