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Quapaw Tribe of Oklahoma Economic Impact of Downstream Casino Resort

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Quapaw Tribe of Oklahoma Economic Impact of Downstream Casino Resort QUAPAW TRIBE OF OKLAHOMA ECONOMIC IMPACT OF DOWNSTREAM CASINO RESORT MAY 15, 2012 Mr. John Berrey Chairperson Business Committee Quapaw Tribe of Oklahoma 5681 South 630 Road Quapaw, OK 74363 Dear Mr. Chairman: KlasRobinson Q.E.D. is pleased to present the accompanying report entitled: “Quapaw Tribe of Oklahoma, Economic Impact of Downstream Casino Resort,” which has been prepared in accordance with our engagement letter dated December 5, 2011. The report presents an analysis of the economic impact of Downstream Casino Resort of the Quapaw Tribe of Oklahoma on tribal, local and state economies, including tax revenue generated to the local, state and federal government. We have also examined the impact of the various tribal businesses on employment, state and federal government services, tourism, and the Indian and non-Indian community. Our analysis was based upon information obtained from direct interviews with and subsequent data from representatives of the Quapaw Tribe of Oklahoma and management at Downstream Casino Resort, as well as figures provided by various state agencies pertaining to issues such as unemployment compensation and human services. Estimates of indirect and induced impact were prepared by KlasRobinson Q.E.D. using the IMPLAN (IMpact Analysis for PLANing) economic model. No effort has been made to obtain independent verification of the source data, which has been assumed to be accurate. Under the terms of our engagement we are under no obligation to revise this report to reflect events occurring after the completion date shown below. Our report is intended for the Quapaw Tribe of Oklahoma and Downstream Casino Resort for use in public relations and lobbying efforts. It may, therefore, be distributed to the press, to various interest groups and to governmental representatives. Under no circumstances can this report be used in support of efforts to obtain financing for any development or enterprise. Publication of the report or any information contained therein in any manner must explicitly indicate that it was prepared by KlasRobinson Q.E.D. May 15, 2012 Quod erat demonstrandum, KlasRobinson Q.E.D. James M. Klas Matthew S. Robinson Founder & Principal Founder & Principal QUAPAW TRIBE OF OKLAHOMA ECONOMIC IMPACT OF DOWNSTREAM CASINO RESORT Letter of Transmittal CONTENTS PAGE INTRODUCTION BACKGROUND .............................................................................................. 2 OBJECTIVE .................................................................................................... 3 APPROACH & METHODOLOGY ................................................................... 4 EXECUTIVE SUMMARY OVERVIEW OF STUDY FINDINGS ............................................................... 6 DIRECT IMPACTS GENERAL ...................................................................................................... 8 OVERVIEW .................................................................................................... 8 EMPLOYMENT .............................................................................................. 9 EMPLOYMENT IMPACT ................................................................................ 12 WAGES & EARNINGS ................................................................................... 15 OTHER BENEFITS ........................................................................................ 15 PAYROLL RELATED TAXES ......................................................................... 15 OTHER TAX REVENUES .............................................................................. 16 PURCHASES OF GOODS AND SERVICES ................................................. 18 IMPACT ON TOURISM .................................................................................. 21 IMPACT ON LODGING .................................................................................. 23 CONSTRUCTION IMPACT ............................................................................ 25 CHARITABLE DONATIONS ........................................................................... 26 DISASTER RELIEF ........................................................................................ 27 INDIRECT AND INDUCED IMPACTS GENERAL ...................................................................................................... 30 OUTPUT IMPACT .......................................................................................... 31 EMPLOYMENT IMPACT ................................................................................ 33 EARNINGS ..................................................................................................... 35 ADDENDUM A: TIMELINE ADDENDUM B: PROFILE OF KlasRobinson Q.E.D. INTRODUCTION BACKGROUND Several hundred years ago, the Quapaw were a division of a larger group known as the Dhegiha Sioux. They split into the tribes known today as the Quapaw, Osage, Ponca, Kansa, and Omaha when they left the Ohio Valley. The Quapaw moved down the Mississippi River into Arkansas, displacing the Tunica and the Illinois. This is the origin of the word “Ugaxpa” or “O-Gah-Pah,” as the Quapaw were known to other tribes, which means the downstream people. The downstream people settled in the area where the Arkansas River met the Mississippi, and the meandering of the two massive rivers had deposited nutrient-rich soil conducive to farming. They settled into four villages at the mouth of the Arkansas River. In fact, the state of Arkansas was named after the Quapaw, who were called Akansea or Akansa, meaning "land of the downriver people", by other Native Americans. This is where the Quapaw stayed until they were pushed out by European-Americans several hundred years later, to their present location in northeastern Oklahoma. The Tribal Headquarters of the Quapaw Tribe is located in Quapaw, Oklahoma. The Quapaw Tribe of Oklahoma formally organized as a federally recognized tribal government in 1818. The Quapaw Tribe of Oklahoma has a government-to-government relationship with the United States Government. As a federally recognized Tribe and sovereign tribal entity, the Quapaw Tribe of Oklahoma has governmental authority over its reservation land and people. The government arm of the Quapaw Tribe of Oklahoma is governed by the business committee. The business committee has developed a variety of successful tribal enterprises that have generated much needed revenue for the Tribe and created employment for tribal members and residents of the surrounding communities. One such enterprise is Downstream Casino Resort, located just off Interstate 44 at the tri-state region of Oklahoma, Kansas and Missouri. Opening in July 2008, the entertainment destination features a casino, numerous food and beverage outlets, a 12-story hotel, meeting and banquet space, a multi-purpose pavilion, outdoor concert venue and a golf course. In an effort to better educate the public and to provide current, factual, supportable information to submit to state and local governments, the Quapaw Tribe of Oklahoma has commissioned a study demonstrating the economic benefits of its tribal enterprises. KlasRobinson Q.E.D. was selected to perform this study due to its accumulated experience in analyzing Indian gaming and other tribal enterprises in Oklahoma and throughout North America, as well as its experience in estimating the economic impact of individual projects and entire industries. For additional information on KlasRobinson Q.E.D. refer to the addendum. OBJECTIVE ∴ INTRODUCTION 2 The purpose of this study is to quantify, to the extent possible, the benefits accruing from Downstream Casino Resort to the Quapaw Tribe itself, communities in the surrounding area, the state of Oklahoma as well as the neighboring states of Missouri, Kansas, Arkansas and, to a certain degree, the entire country. The study provides estimates of the direct, indirect and induced impact from Downstream Casino Resort. Direct impacts are changes in the industry in which a final demand change is made. In the case of Downstream Casino Resort, direct impacts are those generated directly, including employment, wages, purchases of goods and services, as well as taxes or payments in lieu of taxes paid to the local, state and/or federal governments. Indirect impacts are changes in the inter-industry purchases as they respond to the demands of the directly affected industry, namely the presence of the Downstream Casino Resort operation in the local and regional economy. This includes increased production and subsequent employment, earnings and expenditures at businesses, many located in the area and region, which supply goods and services to Downstream Casino Resort. Induced impacts are derived from changes in spending from households as income/population increases or decreases due to changes in the production. This includes increased production and subsequent employment, earnings and expenditures at area and regional businesses that supply goods and services to the employees of Downstream Casino Resort. Indeed, as will be apparent, the magnitude of the direct, indirect and induced benefits provides compelling evidence of the overwhelming positive impact that Downstream Casino Resort has generated. APPROACH & METHODOLOGY ∴ INTRODUCTION 3 The primary source material for this study was derived from direct interviews with representatives of Downstream Casino Resort and the Quapaw Tribe of Oklahoma. Information from interviews was supplemented by written documentation, including financial statements, payroll
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