MOHEGANS BRANCHING OUT
Tribe diversifies nongaming portfolio
Mohegan — No one can accuse the Mohegans of standing still.
The tribe, whose casino ventures eventually could land in six states and stretch from coast to coast, also has been delving into areas that have nothing to do with slot machines, dice and roulette wheels.
Try sports bars, fast- casual restaurants, wood pellets, business software and digital office technology.
“While we continue to pursue gaming, we’re also cognizant of the fact that no one who’s prudent puts all their eggs in one basket,” Kevin Brown, the Mohegan Tribal Council chairman, said in a recent interview. “We’ve got other things in the works.”
Since mid-May, the Mohegans have announced franchising agreements with two restaurant chains and a tribal subsidiary’s acquisition of wood pellet production plants in Ohio and Indiana. Any day now, they’ll be announcing a joint venture with Leslie Digital Imaging LLC, a New York-based distributor of “digital office technology, color graphics and workflow solutions.”
The tribe will be the majority owner of the newly formed company, LDI/Mohegan LLC, which will serve the New England market.
The tribe’s recent diversification efforts — traceable to the formation of a Strategic Initiatives Department in September 2012 — began with capital investments in a handful of companies, including eBrevia, a Stamfordbased startup whose software helps attorneys analyze complex legal documents quickly.
The new department, essentially a two-person operation consisting of tribal members Jeanette
Ziegler and David McBride, has accomplished much in less than two years. When it started, Brown, a retired Army colonel who had yet to be elected to the tribal council, was “on the outside, looking in,” working as a business consultant for the Bridgeportbased Greater New England Minority Supplier Development Council.
Brown was elected to the tribal council in August and to its chairmanship in October. The supplier development council helped the ZieglerMcBride team expand, and a relationship with Babson College’s entrepreneurship program enabled the tribe to sharpen its focus and its business plan.
“They helped us answer the question, ‘What are we driven by?’ ” Brown said.
Of course, any business deal the tribe considers must promise a return on investment, the chairman said, but it also must have regional appeal or potential for growth. It must be associated with a product or service compatible with the tribe’s principles and, finally, it should provide jobs for tribal members, “whether it’s working behind a counter, as a manager or as the CEO.”
The restaurant agreements will enable the Pennsylvaniabased Arooga’s Grille House and Sports Bar chain and the Denver-based Smashburger chain to expand throughout New England over the next several years. The Mohegans will own at least 15 new Arooga’s restaurants and up to 16 new Smashburger locations. All of Arooga’s existing sites are in Pennsylvania, while a Natick, Mass., location is the only one of Smashburger’s nearly 270 restaurants in New England. Both chains have been listed among the top franchising opportunities in the country.
The Mohegans entered the home-heatingmarketthrough a newly formed subsidiary, Northeast Wood Products, which purchased the Pennington Seed Co.’s wood pellet plants in Peebles, Ohio, and Ligonier, Ind., as well as other Pennington assets in Kenbridge, Va. Northeast announced last month that it expected to begin producing more than 130,000 tons of pellets annually within several months.
Brown said the success of the tribe’s casino facilities has been a major factor in the tribe’s ability to diversify beyond gaming.
“We have a reputation for doing things the right way,” he said. “That’s opened doors for us.”
Mohegans in high places
It seems clear that the Mohegans have no intention of backing away from gaming, given the Mohegan Tribal Gaming Authority’s involvement in casino projects proposed for Revere, Mass., Thompson, N.Y., Philadelphia and La Center, Wash., where the Mohegans are partnering with the Cowlitz Indian Tribe. The authority’s management arm, Mohegan Gaming Advisors, manages Resorts Casino Hotel in Atlantic City.
Over the years, a remarkable number of Mohegan tribal members has ascended to high positions in casino management. Tribal members now occupy 42 of the 184 positions at the manager level and above at Mohegan Sun and Mohegan Sun at Pocono Downs, according to the tribe. Twenty- three tribal members hold positions at the director level and above, including Mohegan Sun’s top two executives — Bobby Soper, president and chief executive officer, and Ray Pineault, executive vice president and chief operating officer.
Another 150 members of the roughly 2,000- member tribe work at the casinos in Connecticut and Pennsylvania.
“It’s been happening right under our noses,” Brown said of the tribal members who’ve assumed positions of authority. “We’ve been able to leverage the experience of people like Mitchell Etess (the gaming authority’s chief executive officer), who have mentored many of our tribal members.”
The chairman also cited tribal career development and succession-planning programs.
Such “self-determination,” whether in casino management or in pursuing diversification, has long been the tribe’s ultimate goal, Brown said.
Might Mohegan enterprises be entirely staffed by Mohegans one day?
“I don’t think we should ever make that purposefully a goal,” Brown said. “But look how far we’ve come. Back in October 1996 ( when Mohegan Sun opened), could we have put people in the vice president of human resources position? CEO? COO? Lead attorney? No. But now we’re running the place. We have availed ourselves of the opportunity.”