Dain Strand deals blackjack to patrons at the Treasure Island Casino in Red Wing. The tribe would move the casino to a site near Rochester in event of a disaster on the reservation. (Jim Gehrz/The Minnesota Star Tribune)

Six years after purchasing 1,200 acres of land just north of Rochester, the Prairie Island Indian Community has secured federal approval to recognize a portion of the land as sovereign tribal territory.

The decision, announced this month by the U.S. Department of Interior’s Bureau of Indian Affairs, puts 400 acres of the Elk Run property the tribe owns into a federal trust, granting the tribe the tax benefits and other protections afforded to tribal lands. It also raises the possibility of the site being used for a casino.

While the tribe said it has no immediate plans to develop the land, its application noted the potential need to build an “emergency gaming facility” on the site in the event a disaster impacts operations at Treasure Island, the casino and resort it owns near Red Wing. The interim casino would be built inside a 22,000-square-foot barn on the property that is now vacant.

The approval from the Bureau of Indian Affairs also opened the possibility for a permanent casino to be built on the site after a six-year forbearance period “should the Tribe determine additional Tribal economic income and employment opportunities are needed.”

For years, the tribe has raised concerns about catastrophic flooding impacting the reservation, including the casino, the tribe’s primary source of revenue. The tribe has also expressed worry about the presence of a nuclear generating plant, one of the oldest in the country, located about 700 yards away from the casino.

“[T]he funds generated by the emergency interim gaming facility will allow the Tribe to continue its critical governmental functions in the event of a closure of its main casino as a result of a natural or nuclear disaster,” reads the decision from the Bureau of Indian Affairs. “The Elk Run Site will become the Tribe’s lifeline in such an event and will serve as a means of recovery for the Tribe should such an event occur.”

As the tribe prepares its contingency options for keeping its gaming operations afloat, it is also awaiting approval for a second application covering the remaining 800 acres it owns near Pine Island.

Those plans center on housing for tribal members, which the tribe has said was its primary reason for purchasing the site in 2019 for $15.5 million. The tribe has about 1,100 enrolled members, about 150 of whom are on a waiting list for housing on the reservation.

While no specifics have been laid out, the tribe said it has already hired a land planner and consulted tribal members about what a potential development could look like.

“For decades, Tribal leaders have sought to provide members with an option to live as a community and raise their families in ways consistent with who we are as Dakota people, at a safer distance from the ongoing threats we face,” said Grant Johnson, president of the Prairie Island Tribal Council, in a statement.

The tribe’s spokesperson declined interview requests.

Pine Island Mayor David Friese said the tribe has not offered the city a timetable of when it could begin construction. But he said from the beginning, the tribe has been upfront and open about its dire need for housing — a conclusion he also reached after touring the existing reservation.

Friese said while there are some infrastructure needs that must be addressed — including a $90 million regional wastewater treatment plant that the city has been asking the Legislature for — the city sees nothing but opportunity with the tribe’s planned development in the area.

“The challenges that might come out with that would be like any other community that has that growth going on,” Friese said in an interview. “We just want to make sure that Pine Island is in a position to welcome that growth and be prepared for it.”

City leaders have reason to be eager for the development of the Elk Run site. It has been 15 years since the property, located 15 minutes north of Rochester along Hwy. 52, was announced as the future home of a $1 billion biotech business park that would become a Midwest version of Silicon Valley.

Those plans, however, never materialized as questions began to emerge about the credibility of the proposal. The venture capitalist behind the project, G. Steven Burrill, was later sentenced to two and a half years in prison after pleading guilty to defrauding his investors and falsifying tax returns.

The failed project left Pine Island, a city of about 3,800 people, with unpaid property taxes and a state-funded $45 million highway interchange that built to accommodate traffic that never came.

Friese said the track record of the site made the community wary when the tribe first announced plans for the site. But as details emerged, he said the community reaction has been mostly positive.

“There were a lot of people that were just a little apprehensive because they needed to see whether or not this was going to actually happen,” said Friese, who was still in grade school when the initial Elk Run project was announced. “But if anything, it’s going to be an absolute boom in opportunity for the Pine Island area.”