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Category: Government | Business

Eastern Band of Cherokee Indians Alcohol Expansion Feasibility Study

background

The Eastern Band of Cherokee Indians (EBCI) is a federally recognized Native American tribe in the United States. The Cherokee Indian Reservation, officially known as the Qualla Boundary, is located in Western North Carolina, just south of Great Smoky Mountains National Park. The main part of the reservation lies in Swain, Jackson, and Haywood counties, with additional smaller non-contiguous sections located in Cherokee County and Graham County. The total land area of the Qualla Boundary is approximately 82 square miles and serves as home to over 8,000 residents. The Qualla Boundary is “dry,” with no access available for residents or visitors to purchase alcoholic beverages. The only exception is that customers at Harrah’s Cherokee Casino can purchase alcoholic beverages at many of the casino’s bars and restaurants. Because of the limitations placed on alcohol sales, many residents and tourists travel outside the Qualla Boundary to nearby counties to purchase alcohol, resulting in a lost opportunity for revenue for hotels, restaurants, convenience stores, grocery stores and the Tribal Alcoholic Beverage Control Commission (TABCC). Additionally, new business growth and development is dramatically hindered due to businesses not being to sell alcohol. The EBCI wanted to understand what would be the financial impact of selling alcoholic beverages on Tribal land other than just at the casino.

solution

WR-Martin was engaged by the Eastern Band of Cherokee Indians Tribal Alcoholic Beverage Control Commission (TABCC) to complete a feasibility study that evaluated the direct financial benefits to the EBCI if the sale of alcoholic beverages on Tribal land was expanded. Tribal leaders wanted to understand what financial benefits could be expected if these services were approved to be offered. A custom financial model was developed by WR-Martin to delineate the key monetary impact of alcohol sales. The activities involved expanding the service populations to include not only gaming, but also restaurants, grocers, hotels, and retail outlet sales. The model used a five-year project period. The critical first step was to establish the baseline assumptions and data that were used to predict future sales and expenditures. Important indicators were supplied to WR-Martin by EBCI. These indicators were used to formulate a set of assumptions, approved by EBCI, which served as a foundation for the financial model.

Simultaneous to our feasibility study, the EBCI prepared for the necessary public vote that would be required to authorize the sale of alcoholic beverages on the Reservation beyond the casino. The EBCI structured the vote into three major categories of alcoholic sales:

  • opening of an ABC retail store.
  • permitting and selling of alcoholic beverages to restaurants.
  • permitting of grocers that would sell malt beverages and wine products.
result

The completed feasibility assessment demonstrated a significant positive financial gain to the community, if the EBCI were to make alcohol more readily available through other venues on the Qualla Boundary. However, the initial vote by the Tribal members did not approve the vote to proceed with the expansion of alcohol sales. At the time of project completion, the EBCI was planning to put the issue back on a future ballot due to the significant financial and economic development impact the availability of alcohol would have on the local economy.