THE BLOG

Who Said First Nations Aren't Open for Business?

07/13/2013 12:23 EDT | Updated 09/11/2013 05:12 EDT

Many Canadians hold the misconception that First Nations are against any form of development or resource extraction within their traditional territories. But the simple truth of the matter is that First Nations are very cognizant of the bigger picture and forward thinking in terms of sustainable development.

The Supreme Court of Canada has ruled that First Nations with unextinguished aboriginal titles and rights, including treaty rights, must be consulted and accommodated if their lands and resources are to be impacted by proposed development. For First Nations, economic development must be both environmentally sound and sustainable in order to proceed.

Tzeachten (chee-ack-ten) First Nation, in Chilliwack, B.C., is one of the shining examples of First Nations economic development success. Capitalizing on their premium location, Tzeachten has created a respectable real estate empire. The Vedder Crossing Plaza, developed by Tzeachten in 1996, is now home to such major retail chains as Save-on-Foods, Tim Horton's, Royal Bank, Panago Pizza, Booster Juice and other local businesses.

A First Nations Certificate of Possession (CP) holder, supported by Tzeachten First Nation, entered the residential real-estate market in 2004 with the development of Halcyon Meadows, an adult-oriented gated community overlooking Mt. Cheam.

Analysts originally predicted that it would take seven years for the 224 single-family detached units to sell out but it only took Tzeachten two years. This was the beginning of the real estate boom for those who held CP's in Tzeachten, which accounts for approximately 90 per cent of the reserve land.

On-reserve residential real estate developments to date include Stoney Creek, Avonlea, Promontory Lake Estates, Ensley Estates, Amberwood, Selomas Mobile Park, Maple Meadows, Steetaws, River Rock and Englewood Village. These developments earn sustainable revenue for the First Nation and contribute greatly to the larger economy.

Mark Perry, real estate developer and Executive Director of the Englewood development, speaks very highly of Tzeachten and is quick to share his experience in dealing with First Nations. Perry was recently quoted in the Chilliwack Progress as stating "I cannot overemphasize how harmonious the working relationship has been with Tzeachten. They have been incredible people to do business with. They are very receptive to new ideas, and very caring about who our end user is. This was my first foray into First Nations land development, I have two more coming.'"

Such high praise from a respected businessman like Perry should dispel some of the myths and negative attitudes regarding First Nations economic development. Tzeachten continues to boom with the construction of Englewood Courtyard, a five-storey, wood framed, 156 unit premium condominium, in partnership with Perry.

Having been certified for their financial administration by the First Nations Financial Management Board (FNFMB), in accordance with internationally recognized COSO standards, sends a strong signal to investors that Tzeachten's fiscal management is sound.

According to FNFMB's Executive Chair, Harold Calla, "Tzeachten demonstrates how becoming certified by the FNFMB translates into real community benefit. They have committed to strengthening their financial management systems by putting policies and procedures in place that gives all stakeholders confidence. This step will help them achieve the long term vision they have for their community.'"

In addition to third-party validation of their financial administration systems, Tzeachten is now able to access below prime financing from the First Nations Finance Authority (FNFA). The FNFA functions much like a provincial treasury board and is modeled after the Municipal Finance Authority of British Columbia.

FNFA President and CEO, Ernie Daniels explains it best, "One of the benefits of borrowing through the FNFA for First Nation communities is access to fixed interest rates, over longer amortization terms, up to 30 years, within a pooled borrowing environment. This results in a major reduction in their annual debt service requirements."

Financing through the FNFA has allowed Tzeachten to break ground on more development projects including their Sportsfield Multipurpose Building and seven-unit townhouse complex for band members. According to Chief Glenda Campbell "What we currently pay out to debt service a $1 million loan will leverage almost $3 million once refinanced, which makes it that much more affordable for us to complete the additional projects we have targeted this year."

In addition, improvements to infrastructure currently underway are making Tzeachten even more desirable on the real estate market. While many will see Tzeachten as the exception rather than the rule, the fact remains that great things become possible when the First Nations Community and the Canadian Business Community get on the same page.

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