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For the past seven years, the city of Duluth and the Fond du Lac Band of Lake Superior Chippewa have been standing their ground in a drawn-out legal battle over revenue-sharing from the tribe’s downtown casino.

Last week, the two sides finally reached a settlement.

Calling it a “new day” in the relationship between the two governments, Duluth Mayor Emily Larson, along with tribal Chairman Wally Dupuis, announced on Wednesday that the band has agreed to pay $150,000 a year for services the city provides, akin to the tax other Duluth business owners pay. In exchange, the city has agreed to end its litigation and appeals.

The Duluth City Council formalized the agreement with a vote at a special meeting Friday afternoon. The tribal council had approved it earlier in the week.

The announcement ended the long dispute over an earlier agreement in which the city ceded part of a downtown block to the tribe in the late 1980s. The tribe built the state’s first true casino there, and the two agreed to share revenue for 50 years. Terms called for the city to get 19 percent of a certain type of gaming revenue for the first 25 years, with the percentage to be renegotiated for the second 25 years.

The tribe paid Duluth between $5 million and $6 million annually in recent years, which the city used for street maintenance and reconstruction.

But the tribe decided in 2009 to stop making that payment, saying it needed and deserved to keep more of its revenue. Within a couple of years, the National Indian Gaming Commission ruled in favor of the tribe, finding that the old agreement violated federal law, which states that tribes are the primary beneficiaries of gaming.

The city, facing a gaping hole in its budget, took the case to federal court. After a series of appeals and lower court rulings, it ultimately lost. It then filed suit in Washington, D.C., challenging the gaming commission’s ruling.

In the deal announced last week, the city will drop all pending litigation. The band will adopt the city’s zoning and planning framework, though it is not required to do so on sovereign land placed in federal trust. If the band decides to build a hotel or motel on the site, it will make an additional financial contribution to the city comparable to taxes paid by other such businesses.

The new contract will run for 10 years and will be renegotiated for another 10 years after that, ending in 2036.

“The Band has always said that we are willing to pay our fair share for services we receive from the City, like any other business,” Dupuis said in a statement. “This agreement respects the sovereignty of the Band while recognizing that we can be good neighbors and good partners with the City.”

Larson, sworn in as mayor in January, said the agreement means the two governments will move forward in a new relationship.

“The truth is that the court system has spoken, very clearly, on several occasions. And the reality is that our time, energy and financial resources are better spent in other ways that can move our community forward,” Larson said.

Already, she said, the two governments have met and reviewed options for a skywalk connection to the casino.

“It’s important to remember that the litigation between our governments represent the business-to-business aspects of the relationship,” Larson said. “As a Duluth community, however, I believe that we know it is time to put this behind us and to step steadily forward into a changed but equally powerful future.”

Dupuis, who took office in November, pointed out that the band’s presence in the city rises from “a long and rich history of all these lands having been occupied by the Fond du Lac Band, the Anishinabek.”

He said the band is looking to “move forward in mutual respect as governments and peoples with a shared interest to provide a higher standard of living for everyone.”

@pamlouwagie • 612-673-7102