Innovative Native American Loan Fund Helps California Tribe Rebuild Historical Lands

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Indian Land Capital Company (ILCC) Lends Sonoma County Tribe $1.35 Million To Expand Tribal Lands and Invest In Future

90 million acres of Indian land were taken out of Indian ownership and control as a result of the Dawes Act

"By serving Indian Country with flexible and innovative financing options, ILCC is creatively fulfilling its mandate as a Native CDFI."
- Ms. Tanya Fiddler (Cheyenne River Sioux Tribe and U.S. Treasury's Community Development Advisory Board Member)

ILCC, a Native American owned and managed Community Development Financial Institution (CDFI) based in Montana and the Kashia Band of Pomo Indians of Stewarts Point Rancheria (“Tribe”) recently negotiated an innovative financial agreement to help the Tribe purchase 510 acres of wooded land adjacent to its remote rancheria about 30 miles north of Bodega Bay.

The purchase of additional fee lands, which closed on March 1st, expanded the Tribe’s land holdings from just 42 to roughly 550 acres. Until the land is in trust it will not be under complete tribal jurisdiction and control, but the sale is an important first step for the federally-recognized tribe of 860 citizens whose ancestral lands once encompassed most of northwest Sonoma County.

“Acquiring these lands represents a major step forward towards our tribal goal of preserving our culture and resources while seeking opportunities for economic development and self-sufficiency for our Tribe and people,” said Tribal Chairman Emilio Valencia. “We are grateful that there are resources in Indian Country like ILCC that could help us take a step forward in realizing this dream,” added Valencia.

Kashia’s loan was facilitated by ILCC that provides flexible financing to strengthen Native communities and cultures through tribal land acquisition. As a Native CDFI, ILCC serves market niches underserved by traditional financial institutions, promotes community development, and provides technical support in conjunction with its financial activities.

Unlike most financial institutions, however, ILCC does not require land to be used as collateral for loans but relies instead on the “full faith and credit” of each individual sovereign Indian nation. Loan decisions are based on the full picture of a tribe’s financial condition, borrowing track record, and ability to make loan payments. This eliminates the need for much of the costly and time-consuming measures required by traditional lenders to secure land and other assets as collateral for tribal loans.

“Many non-gaming California tribes with small, remote Rancherias like Kashia don’t have a lot of assets or revenues so they have difficulty securing loans and accessing financing for tribal goals and programs,” said Gerald Sherman (Oglala Lakota), ILCC President. “You don’t see anything negative in their background, you just don’t see much of a proven borrowing track record at all. Our goal is to help such tribes break that cycle and gain access to capital for investment,” added Sherman.

What Sherman and ILCC saw in the Kashia Pomo Tribe were visionary tribal leaders and dedicated citizens willing to forego immediate individual payments (made possible by tribal receipts from the state’s RSTF, or Revenue Sharing Trust Fund, supported by gaming tribes) to invest in the future.

“We were impressed that they were willing to sacrifice individual short-term payments in favor of investing long-term in their Tribe,” said Sherman. “While they are still determining how best to use the land to advance their sovereign goals, there are many possibilities including conducting sustainable logging for economic development,” added Sherman.

“CDFIs provide a unique range of financial products and services to serve the growing movement across Indian County to develop tribal communities and economies and restore ancestral lands,” said Tanya Fiddler (Cheyenne River Sioux Tribe), Chair of the Native CDFI Network, Executive Director of the Four Bands Community Fund on the Cheyenne River Sioux Indian Reservation in South Dakota, and recent White House appointee to the U.S Treasury’s Community Development Advisory Board. “By serving Indian Country with flexible and innovative financing options, ILCC is creatively fulfilling its mandate as a Native CDFI,” added Fiddler.

ILCC has made approximately $6.3 million in loans to Indian nations and entities, and has assisted in the recovery of nearly 30,000 acres of tribal land in Washington State, Montana, Minnesota, South Dakota, and California. Projects made possible through ILCC financing have included expansion of a health care facility, construction of homes for tribal members, sustainable forest management, wetland restoration, agriculture/ranching, and protection of sacred and cultural sites.

Recently ILCC provided $900,000 in rapid financing to help the tribes of the Oceti Sakowin (Great Sioux Nation) raise $9 million to repurchase and once again retain full ownership and control of the sacred site Pe’ Sla located in the Black Hills.

ILCC’s revolving loan funds provide an excellent investment vehicle for tribes with more resources that want to help other tribes while receiving a reasonable investment return. To date, ILCC has raised $7.5 million in funds from socially-conscious investment sources including the Indian Land Tenure Foundation (ILTF), Ford Foundation, CDFI Fund, Wells Fargo Bank, Otto Bremer Foundation, First Nations Oweesta Corporation, individual (gaming) tribes, and others. In June 2012, ILCC received a $1 million low-cost loan from Bank of America to help tribes acquire lands for business development, housing and community–based projects.

ILCC will continue to reach out to both potential borrower and lender tribes in the upcoming National RES (Reservation Economic Summit) in Las Vegas and NIGA 2013 Indian Gaming Tradeshow in Phoenix.

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About ILCC and its Founding Partners
ILCC was created in 2005 as a collaborative effort between the ILTF of Little Canada, MN and the Native American Community Development Corporation (NACDC) of Browning, MT, to bridge the gap in lending to tribes and to facilitate the acquisition of Indian lands for social, cultural, and economic purposes. Working with the Indian land and economic pioneers Cris Stainbrook (Oglala Lakota) and the late Elouise Cobell (Blackfeet) as founding directors, ILCC is at the forefront of a Native American movement to reclaim land using Native resources. Prior to starting ILCC, Sherman was a banker focused on community development and finance on Indian reservations and the founding director of the Lakota Fund, a well-known CDFI and one of the first microfinance funds in the United States. Learn more at http://www.ilcc.net. As partners of ILCC, ILTF and NACDC provide technical support and grants to tribes for the development of strategic land acquisition plans. ILTF is a national, community-based organization focused on American Indian land recovery and management. It works to promote education, increase cultural awareness, create economic opportunity, and reform the legal and administrative systems that prevent Indian people from owning and controlling reservation lands. NACDC is the nonprofit affiliate of the Native American Bank. NACDC’s mission is to remove the barriers that exist in Indian Country that prohibit the flow of capital and credit. NACDC addresses critical needs in Native communities related to growth of family assets and sustainable economic development. NACDC provides financing, technical support and training to Native communities and tribal members for housing, economic development and land recovery. Learn more at http://www.iltf.org and http://www.nacdc.org.

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Gerald Sherman
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