THE NEW LONDON DAY AND LYNN MALERBA ON THE MOHEGAN GOVERNMENT BUILDING

Mohegans say community center funds not a bailout
By Brian Hallenbeck

Publication: The Day

Published 06/09/2010

Chairwoman says $74 million in federal stimulus money makes project possible

Mohegan - For more than a year, the Mohegan Tribe's long-planned community and government center has been a ghostly, shrink-wrapped presence on Crow Hill, a monument to arrested development.

With rust appearing on the building's steel framework and the economic downturn squeezing the Mohegans' casino-fed revenue stream, tribal officials had all but decided they would have to enclose the site in a more permanent way and sit tight. At stake was the $28 million they'd already spent on design and construction. The tribe's "place of its own" would have to wait.

Enter the federal government.

Eager to push out stimulus loans and create jobs, the U.S. Department of Agriculture announced last month that it had approved $74 million in loans for the Mohegans, enough to cover the entire cost of a scaled-down version of the center. Look for the shrink wrap to come undone in July or August and the building to be finished a year later.

For the tribe, the timing of the fed's largesse was "fortuitous," Lynn Malerba, chairwoman of the Mohegan Tribal Council, said in an interview Tuesday. Not that the money's a gift by any means, she was quick to emphasize.

"It's not about a bailout," she said. "It's about a low-interest loan. We're going to pay every bit of it back - with interest."

Indeed, the aid includes $54 million in loans funded under the American Recovery and Reinvestment Act as well as another $18 million in guaranteed loans and $2 million in nonguaranteed loans, according to tribal officials. All of it is to be paid back over 30 years at an effective interest rate of 2.8 percent.

"Our preference would have been to stop the project, but the USDA financing was available now," Malerba said. "Without a loan at such a low rate we couldn't have done it. We wanted to protect our asset and we were more than 'shovel-ready,' which was required to get these loans.

"The council thought long and hard about it."

The chairwoman addressed some misconceptions that she said have arisen, namely that the tribe's project will create some 1,300 permanent jobs and include an educational center and a health administration center, as the USDA announced in a May 27 press release.

In truth, she said, construction is expected to create 114 direct jobs. Federal officials estimate the project will create 1,239 indirect jobs through vendors and subcontractors in the region. The center will house some 300 tribal-government employees, most of whom now work in the tribe's low-slung offices on Crow Hill Road.

No longer the "Cadillac" depicted in an early rendering, the center is to be completed for $15 million less than the $89 million originally budgeted, Malerba said. It will still have four floors and a lower level, but only the two lower floors and the lower level will be completed at this time. Savings have also been realized on furnishings and landscaping.

The building will house a library and offices for the tribal and elders councils and such tribal-government departments as Health and Human Services, Education, Cultural and Community Programs, Legal, Finance, Court, Administration and Publications. A lower level will include a gym with two basketball courts, locker rooms and a fitness center. The exterior will reflect the style of the tribe's longhouses, with arched roofs and elongated wings.

The center's been a long time coming for a tribe that has long since outgrown the confines of the reservation church, Malerba said, recalling that the plans for the center were first drawn and then shelved in 1999. After years of funding expansion at Mohegan Sun, infrastructure improvements on the reservation and commitments to surrounding communities, the tribe dusted off the plans in 2006-07.

Then came the downturn and in early 2009 the shrink wrap.

Now it's time for the Mohegans to finish something "so near and dear to us," Malerba said.

Who would begrudge us that?"

EDITORIAL FOOTNOTE: The Feather News at www.feathernews.blog spot.com added the following comment.

There have been no reports that Mohegan tribal members were asked by their government as to whether the new debt should be taken on at this time.
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ARE MOHEGAN TRIBAL MEMBERS HAVING BENEFITS TAKEN AWAY, AT THE SAME TIME THE TRIBAL COUNCIL IS BUILDING A GOVERNMENT COMMUNITY CENTER, THAT MOST TRIBAL MEMBERS I HAVE TALKED TO DO NOT WANT?

IN BROKENWING'S OPINION, SINCE THE TRIBAL COUNCIL MADE THIS ALLEGED MESS, WHY AREN'T THEY TAKING SOME FORM OF REDUCTIONS IN PAY AND BENEFITS? HOW ABOUT DOING AWAY WITH THEIR CREDIT CARDS TO START?

What do you think?
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