Principal Chief Richard Sneed submitted a resolution during the Oct. 31 Annual Council session requesting authority to coordinate with the Eastern Band of Cherokee Indians Investment Committee and Kituwah LLC to conduct due diligence on the deal. Should the committee and the LLC agree that it’s a good idea, Sneed would have the authority to give an initial $2.5 million toward the business venture and could contribute up to $30 million as the project moves forward.
“What the resolution will do is it will authorize a collaborative review and investment opportunity in a family destination resort project that will be the first of its kind, a new concept for a themed resort with a local and national presence that diversifies our business investment,” said Sneed.
In order for the tribe to invest the full $30 million, five requirements would have to be met, he said: there would have to be a satisfactory analysis by the tribe and Kituwah LLC with third-party reviews, the tribe would have to retain 40 to 45 percent ownership of the company, the tribe would have to close on the lands it’s under contract for in Sevier County, the company would have to secure its total equity — which must include financing from other partners— and the company’s board would have to include a seat appointed by the tribe and a seat appointed by the LLC.
“This is a shared risk,” said Sneed. “There will be much due diligence on the front end. If we are able to close on the property we are currently under contract with at Exit 407, this would be the anchor project and anchor property on that parcel of land.”
The tribe voted in February to buy 122 acres along Interstate 40 in Sevier County, entering into a contract for $7.5 million. Then in July Tribal Council voted unanimously to purchase an additional 197.62 acres on the opposite side of the highway for $13.5 million — the resort would be built on the back portion of this property. Both purchases are still in the due diligence phase.
While the resolution itself did not name the company that the tribe is in talks with, during the course of the discussion it was revealed that the tribe hopes to work with Ancient Lore Village at Boyd Hollow. The $40 million endeavor, launched by Tennessee businessman Tom Boyd, was announced in January 2019. A site in southern Knoxville is to house a 40-acre resort including more than 150 period homes and treehouses, a 150-seat restaurant, a 500-person meeting and event center, and a 1,000-seat outdoor amphitheater, according to a press release. Boyd said the resort will be based on his debut fantasy novel The Bobbins — Outcast to the Inner Earth.
The project is expected to open in 2020, but Sneed and Kituwah LLC are hoping to sway Boyd to relocate it to the tribe’s property in Sevier County.
“Initial projections on the return are strong — double-digit return over the first year,” said Secretary of Finance Cory Blankenship. “Over the long term what we’re looking at is ownership of a company that is looking to develop six resorts over the next five years in multiple markets, which checks the box for the tribe about diversification and entry into other marketplaces to establish a presence.”
Under the tribe’s preconditions for investing, the second of those six resorts would be built in Cherokee.
“This would be a replacement for the adventure park project that we could accomplish for about half of the cost that was allocated for the original adventure park,” said Blankenship.
In 2012, Tribal Council green-lighted a $92 million adventure park concept featuring water slides, rock climbing, zip-lining, splash pads and indoor amenities such as a 302-room hotel, restaurants, retail shops and an arcade. The project got sidelined in favor of priorities such as the Valley River Casino and Hotel in Murphy and the new Cherokee Indian Hospital. It came back on the floor for discussion in 2016, but no adventure park was ever built, largely due to the estimated 350 full-time employees needed to run it.
“We simply don’t have the workforce currently or the infrastructure to support a project of that size,” said Blankenship. “We can support a much smaller project.”
If all went as planned, Boyd’s company would build a resort in Cherokee after concluding the Tennessee project, with the EBCI investing only that initial $30 million and sharing the profits in proportion to its ownership.
Reaction from Council
Blankenship and Sneed both spoke strongly in support of the proposal, but councilmembers were hesitant, ultimately voting to table the resolution.
“We really don’t know if it is going to work out or not,” said Councilmember Bo Crowe, of Wolfetown. “I don’t think in my opinion it would be smart to invest in a company that we have no idea if it’s going to work.”
“Why can’t they build in Knoxville and we see how they take off, and then if they want our money, then we’ll invest?” added Councilmember Tom Wahnetah, of Yellowhill.
Councilmember Albert Rose, of Birdtown, said he wanted to see more development options for the site rather than biting at the first proposal.
“I think that anything that goes on that property is going to make money,” he said. “This is the first thing that’s come across that wants to go there, and I know it’s not going to be the only option.”
Councilmember Chelsea Saunooke, of Wolfetown, objected to the lack of background information attached to the resolution council was being asked to approve.
“With something major like this I’d like to see some attachments with it come through here, rather than just a front and back sheet of paper,” she said.
“We bought that property over there to develop, and it’s going to have to be developed one way or another or we’re losing every day,” added Vice Chairman David Wolfe, of Yellowhill. “I’m interested in the project, but I need more information.”
Councilmember Boyd Owle, of Birdtown, was the only one to speak in support of immediate passage.
“If we don’t accept and they build in Knoxville and then we go in and say, ‘We want 45 percent in this,’ it’s forget it, you had an opportunity,” said Owle. “I want to give it a try.”
Owle offered a move to pass, but two moves were already on the floor — one to table and another to kill. The move to table prevailed, with Chairman Adam Wachacha, Councilmember Richard French, Councilmember Bucky Brown, Chelsea Saunooke, Rose, Owle and Wolfe in favor. Opposed were Councilmembers Tommye Saunooke, Dike Sneed, Crowe and Wahnetah. Councilmember Perry Shell was absent.
The move to table came with a request that Council meet with all parties to discuss the opportunity further.
“That meeting has not been scheduled,” Blankenship said in an email. “We are still on track to meet the development timetable should the opportunity advance beyond the due diligence phase.”