Business

Osage Casinos to pay rent for central offices in Tulsa

With the Standing Bear administration looking into the operations of the Osage Nation, it was discovered the tenants of the Tulsa Airpark have not been paying rent for the past six years.

The 100-acre Tulsa Airpark, which is located on West 36th Street, eight minutes from downtown Tulsa, currently houses the central services offices for the seven Osage Casinos operations. They have been operating at the airpark since 2009.

“My position was if we charge rent for every other program in the Nation, including day cares, why are the casino central offices not paying rent? And the answer I was told was that’s just the way the previous administrations wanted it,” Standing Bear said.

Standing Bear sent Casey Johnson, director of operations, and Bruce Cass, director of the Tribal Land and Acquisitions department, to survey the property and determine the fair market value. The price tag for rent of the central offices building at the Tulsa Airpark: $970,000 per year, or approximately $81,000 per month.

The central services building is 88,655 square feet with additional storage and airport hangar buildings, adding an additional 26,320 square feet, for a total of 114,975 square feet. The property also has an abandoned airstrip and an office for the Gaming Enterprise Board with one employee. Currently, more than 150 employees work at central services.

“They’ve [GEB] been very cooperative, they just got a little bit stunned. The new board didn’t know they weren’t paying rent until they got put on the board and we hit them with a bill of approximately $970,000 a year,” Standing Bear said. “That’s our estimate of fair market value. So we’ve missed out on that for years. But true, I will admit, that was from our point of view. From their point of view, we didn’t take into consideration some of the maintenance costs and other issues they believe we should consider. We charge them for portions of the building they weren’t actually using, so we are in those negotiations.”

Gaming Enterprise Board

At the Feb. 18 Gaming Enterprise Board meeting, Kimberly Pearson, executive director for Osage Casinos, said casino management is in negotiations with the Nation for leasing the office space at the airpark.

“We are going to be expanding I.T. services, so that will change our square footage,” Pearson said.

Pearson said she informed the Executive Branch that the gaming board must approve the lease. She then noted the timing of the lease is in question because of budget constraints in the current 2015 fiscal year for the gaming board or whether the lease would start in FY 2016.

Gaming board member Dawn Pratt Harrington referred to the gaming plan of operation and said it would also need amending to include the office lease.

“We cannot do anything this fiscal year, I think we made that clear with Congress when we presented our annual report because it’s not in there, it’s not in our budget. So even if we negotiate a lease like next month … OK, but we can’t pay it because we don’t have that money in our budget and we have to do a budget modification to get that done,” Harrington said. “So for this fiscal year, my thought or I would urge everybody to think this is not possible for this fiscal year.”

Gaming board chairman Mark Simms said an amendment to the gaming plan of operations would require approval from the Osage Nation Congress. During its January special session, the Congress approved the FY 2015 gaming plan of operation following a delay due to changes with board members and Osage Casino management.

Currently at the airpark, Osage Casino management occupies space used for its central offices including the CEO’s office, gaming board meeting room, human resources and classroom training space.

The Nation has overseen the central services operations since July of 2011, prior to 2011 the Osage LLC oversaw the operations. The property was purchased by the Nation in December of 2008 for $4.9 million, according to a 2009 IndianGaming.com article. The Tulsa Airpark property is part of the original allotment of Osage Chief Peter Bigheart.

Tenants

The Nation has been talking to the United Keetoowah Band of Cherokee Indians for office space at the airpark, Standing Bear said. The Keetoowah are looking for space to house their administrative offices.

Also on the horizon, said Standing Bear, moving the central offices from the airpark to either Hominy or Skiatook.

“I would like to find a way to move central services to Hominy and Skiatook to bring those jobs closer into the Osage Nation economy, because those are all well paying jobs; especially given the fact our oil business is laying off a lot of people around here,” Standing Bear said. “But that’s going to involve money, space, infrastructure, and that is a long-term plan for the next four years. I’ve already told the gaming board and they didn’t quite know how to take that.”