News Analysis: A review of Cherokee Principal Chief Bill John Baker’s administrative decision to purchase a golf course with additional land for a luxury resort and a second tier outlet mall appears to show yet another lack of regard for Cherokee Law if not insider dealing.
In short; the mode of operation for Chief Baker appears to be if the law restricts – change it – in this case more than doubling allowed expenditures without Council oversight. Question is why and to whom did the benefits flow?
As Cherokee Phoenix reporter Jami Custer wrote December 29, 2012, “At a special Dec. 27 council meeting, Tribal Councilors amended the tribe’s General Corporation Act to increase the dollar amount for Cherokee Nation Business (CNB) property purchases that don’t require council approval. The amount went from $6 million to $15 million.”
They then closed a “deal to buy Cherry Springs Golf Course for more than $8 million on December 28,” Custer wrote of a purchase that includes more than 300 acres of land next to Chief Baker’s personal business property. CNB further allocated nearly $3 million for course and restaurant renovations. The course is located at 700 E. Ballentine Road in Tahlequah, Oklahoma. But did the CNB get a good deal?
Comps or “comparables” are regarded as the single-best tool in determining property value. They contrast criteria from recently-sold properties in the immediate geographic area by; sale price, age, size, square footage and other elements. Real estate agents use comps to prepare a Comparative Market Analysis (CMA) for their clients. Apparently; this was not done on the Cherry Springs Golf Course purchase.
But for comparison a private group completed purchase of the Muskogee Country Club for $1 million according to a story in the Muskogee Phoenix on July 4, 2011. “Founded in 1907, the 135-acre club is the oldest country club in Oklahoma” the Phoenix story noted then added “years of mounting debt caused the facility to become unprofitable.” The Muskogee Country Club is located only 24 miles away from the Cherry Springs Golf Course.
In summary of the acquisition; CNB bought near twice the acreage for eight times the price of a more historically significant, better designed and maintained course less than 24 miles away.
CNB also owns and operates Cherokee Hills Golf Club at Hard Rock Hotel & Casino Tulsa and Cherokee Trails Golf Course in Tahlequah.
According to the National Golf Federation (NGF) reported in 2014 by Business Week, golf course closings have outpaced openings for eight straight years. The USA has lost 5 million golf players over the last decade. Rounds of golf played dropped 4.9 percent from 2012 to 2013 and golf participation among 18-34 year olds (the age range when most people take up the game for the first time) has declined 30 percent during the past twenty years.
Greg Nathan of NGF is on record nationally saying, “The problem is, there are great courses all over the country – lots of them and not nearly enough players to go around… [Golf] is also an expensive sport for most folks with families and [there] is a decline in the interest of junior players or millenials who find that golf is just not fun and engaging.”
Most troubling, Tulsa Today has found no feasibility (assessment of practicality) study even three years later. Attractive artist renderings have been provided for some announced features, but no economic analysis, market study or details on the development. With the outlet shopping mall; current cost estimates have grown to a whopping $170 million, but, again, without detailed economy study.
Sources assert the only confirmed lease, at this time, is for a car lot, but CNB is proceeding with construction without leases to guide configuration of the space. Building the outlet mall without securing lease agreements is a high risk if not foolish effort in the current economic climate in Oklahoma.
Tulsa Today reached out to Julie Hubbard, Cherokee Nation Public Relations, to question the lack of detailed studies on the project, but she has not responded to multiple messages.
At the time of the expenditure vote, Custer wrote, “CN Communications Director Amanda Clinton said no CNB official was available for comment regarding the cost of the property or CNB’s plans for it.”
Now while it may be a nationwide cultural trend to ignore lawful constitutions or commandments of faith when not convenient; the question is why the limitation existed in the first place?
A reasonable reading would suggest the law an effort to limit debt that could be incurred by the Nation without detailed oversight by the Council and the Cherokee People.
Tulsa Today has found no indication of a property appraisal for the golf course, so how did CNB come up with the $8.5 million offer?
The Cherokee Phoenix wrote January 18, 2013, “Documents related to the purchase were filed on December 28 at the Cherokee County courthouse. According to those records, a revenue stamp indicates the lands purchased cost $7 million. However, a source close to the transaction said the acquisition’s total cost was $8.5 million when including the cost of the golf business, its buildings, a restaurant and equipment on the property.”
Property improvements are traditionally included in a sale price so why the difference of $1.5 million and where did that money go?
“The Cherokee Phoenix asked Attorney General Todd Hembree to determine if CNB, under the tribe’s Freedom of Information Act, had to release the acquisition’s full cost since the deal had been finalized. As of press time, he had not given the Phoenix an opinion,” the paper noted and Tulsa Today has found no further detail years later.
Without a qualified feasibility study; are any of these grand development plans sustainable or practical to say nothing of profitable for the Nation? Will project costs reduce Cherokee Nation services?
The Cherry Springs Golf Course sits adjacent to property personally owned by Principle Chief Baker on which he operates a furniture store. Again the Cherokee Phoenix notes that “Baker said he thought the purchase wouldn’t affect his property’s value,” but how can it not increase value for any property when adjacent property is improved by multiple millions?
“I bought out there 30 years ago. Really smart people said that was the best place to buy and they were right,” Chief Baker told the Cherokee Phoenix. “The place next to me (the Berrys’ property) couldn’t have been bought by the tribe unless specific things happened. To truly create jobs and economic development, why wouldn’t the CN buy it,” Baker told the paper in the January 18, 2013 story, but what did he mean by “specific things happened?” This is not a private business, but a Nation of fee citizens and he is spending National funds – Cherokee money.
Further complicating this transaction is Bob Berry’s position as both a part owner of the purchased golf course and a member of the CNB Board of Directors. The Cherokee Phoenix reports, “The CNB board of directors voted 14-0-1 to purchase the Cherokee County property at its December 12 meeting. Board member Bob Berry, who owned nearly 25 percent of Cherry Springs, abstained from the vote.”
The Berry family had been fighting over the inheritance for four years. Brian Berry, one of the four former owners, told the Phoenix he and his sister Holly, his brother Burl and his father Bob agreed in December to sell the property, apparently in specific response to the CNB offer. Brian said, “he spent hundreds of thousands of dollars fighting his family for control of the property.”
Tulsa Today has not confirmed, but several sources claim that the Berry family is also significant if not major contributors to Principle Chief Baker’s election efforts.
In summary: Council members were asked by Chief Baker to attend a special meeting so that CNB could buy a golf course which borders the Chief’s own property from a CNB board member and the board member’s family for eight times more than a superior course sold for just one year before, and had to do so urgently, during the holiday season just before New Year’s, so that an individual CNB board member could not only get the unsolicited generous purchase price without appraisal, but could get every potential tax break on millions in personal income gains.
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