Jan. 09, 2013--The Mille Lacs Band of Ojibwe plans to buy two hotels in downtown St. Paul, but the long-time Minnesota casino operator said gambling will not be involved. Instead, the band says it wants to diversify its revenue stream with hotels nationwide.

While the band didn't name the two hotels, people familiar with the deal say it's the Crowne Plaza at Kellogg Boulevard and Wabasha Street, and the Double Tree by Hilton on Minnesota Street. Both hotels have been on the market.

The announcement came Tuesday, Jan. 8, as Melanie Benjamin, the band's chief executive, gave the annual State of the Band address in Onamia, Minn.

"Our goal must be economic self-sufficiency," Benjamin told the more than 1,200 members who gathered for the address. "I believe the key to economic self-sufficiency is to diversify our tribal economy."

With the St. Paul investment, "our intentions are to be good neighbors, good citizens of the community, and to run our hotel businesses in an honorable and profitable way," she told the crowd in Onamia.

In addition to buying the two hotels, the band -- which operates the Grand Casino in Hinckley -- also plans to open a center for small business and light industry in Hinckley and open a commercial printing business on the reservation in East Central Minnesota.

The deal to buy the two St. Paul hotels is expected to close in the next six weeks, said Joe Nayquonabe, commissioner of corporate affairs for the band. "We've been running hotels for

the past 21 years through the Grand Casino brand," he said. "The hospitality sector felt like a natural fit" to diversify the band's businesses, he said.

"The master plan is to own hospitality assets in every major hospitality market in the U.S.," he said. The St. Paul properties are in a location "that's home for us, it's in our market, it's something the band can wrap their arms around."

The band also plans to contract with Graves Hospitality Corp., led by Jim Graves, who recently was a Minnesota candidate for U.S. Congress, to manage the two hotels after the deal is complete, Nayquonabe said. Graves also founded the motel chain AmericInn.

Calls to Graves Hospitality were not returned Tuesday.

Both hotels are currently owned by SP Hotels LLC, according to property tax records. The general manager of the properties didn't return a call Tuesday seeking comment.

The deal was greeted warmly by downtown business interests, with word coming just days after Macy's announced it's shutting its downtown St. Paul department store, just a few blocks up Wabasha from the Crowne Plaza, in March.

The band's purchase of the hotels "is really good news," said Matt Kramer, president of the St. Paul Area Chamber of Commerce. The band is a Minnesota entity and "a bunch of very savvy business people," he said. Downtown St. Paul is changing, Kramer added, and the planned purchase "is a testament that they think they can make money off of the (hotels)."

The deal also drew kudos from the mayor's office. "The city of St. Paul is thrilled with this investment. It shows how strong an investment downtown St. Paul is," said Joe Campbell, a spokesman for the mayor's office.

The Crowne Plaza, built in 1965, was a Radisson for years. It is one of the most visible hotels in the city with 22 floors and 470 guest rooms just up the bluff from the Mississippi River. The Double Tree, built in in 1979, with 251 guest rooms, is adjacent to the Central Corridor Light Rail line scheduled to start operating in 2014. Both hotels have downtown skyway access.

Frederick Melo contributed to this story. John Welbes can be reached at 651-228-2175.

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