Skywalk developer claims tribe violated contract

By Felicia Fonseca
Hualapai Indian Reservation, Arizona (AP) April 2011

They come from as far away as Australia, China and Ireland to walk on a glass bridge that extends from the rim of the Grand Canyon.

Some cautiously hold the rails as they make their way around the horseshoe-shaped structure. Others scream in delight as they pretend to fall over and photographers snap their pictures.

What most tourists are unaware of is a dispute between the northern Arizona tribe that owns the Grand Canyon Skywalk and the Las Vegas developer who invested millions to build it. So far the disagreements over revenue shares and construction haven’t swayed visitation numbers, but the two sides say it could, particularly when it comes to Chinese tourists.

David Jin, a Las Vegas businessman originally from Shanghai, China, counts the Skywalk as part of his legacy. He approached the Hualapai Tribe in 1996 with a plan to build it with his own money. The attraction just west of Grand Canyon National Park has about 300,000 visitors a year.

Under an agreement with the tribe, Jin is supposed to split revenues with the tribe for 25 years in exchange for his $30 million investment. Jin said he received some of what he was owed in 2007 but not the accounting to back it up and nothing since then.

He’s taken his case to tribal court to try to force arbitration and to federal court to keep the tribe that recently passed an eminent domain ordinance from trying to sever the agreement.

In court documents, Jin said he believes the tribe’s motivation is to avoid the embarrassment of explaining how ticket revenues evaporated under its watch and to keep from paying him what he’s owed.

“He’s not received a dime, and that is the fundamental portion of the contract,” said Jin spokeswoman Aimee Romero, “It’s the only way Mr. Jin has to make the money back on his contract.”

The Tribal Council unanimously approved the ordinance earlier this month but its members dispute that it was aimed at Jin. Waylon Honga, who serves as the chief operations officer for Grand Canyon Resort Corporation, said it’s a basic law that all governments should have on the books.

Should the government enforce it, tribal spokesman David Cieslak said Jin would be paid fair market value for his investment.

Jin puts that number at $100 million but said in court documents that it’s difficult to know the true value because the tribe has failed in its contractual duty to produce the financial records. He believes the tribe would offer a “low-ball” figure of $15 million.

The tribe calls Jin’s allegations over revenue shares “outrageous” and “false.” The real issue, it contends, is that Jin has shunned his responsibility to complete a visitor center that tourists must pass through to access the Skywalk.

“It’s about right and wrong,” Honga said. “It’s pretty simple.”

A locked plywood gate keeps visitors from wandering through the building that has no electricity, running water, heating or cooling. Caution tape is stretched across an empty elevator shaft and doorframes, and a pile of bagged insulation sits on a concrete floor.

Visitors on a sometimes unshaded ramp peek inside the windows, and instead of seeing a gift shop, restaurant and restrooms, they see exposed wiring, no interior walls, and hardhats and tools strewn about – some of it due to glass replacement.

Emily and Leon Riley of Brisbane, Australia, figured that’s because the visitor center construction is being done at night, but that’s not the case. The building has sat vacant since the Skywalk opened in 2007. Jin said the tribe’s refusal to bring utilities to within feet of the property means construction can’t move forward.

“That’s ridiculous,” Leon Riley said of the delay. His wife chimed in with this: “Surely for the amount of revenue this has brought in, you want to get it done pretty quickly.”

Others were more concerned about the time restrictions on tours and said the view from the Skywalk made them almost forget they had walked through a construction zone to get there.

“It’s awesome,” said Tamika Solomon of Fairfax, Va. “God’s work is awesome.”

A federal judge has rejected Jin’s request to enjoin the Tribal Council from asserting eminent domain but retained jurisdiction of the case and ordered accelerated discovery.

In his complaint, Jin suggests tribal members have engaged in embezzlement and fraud in connection with Skywalk revenues, and that the tribe is selling tickets in violation of the contract.

Honga said those allegations are a “low blow to the Hualapai.”

The Skywalk extends 70 feet from the canyon rim and 4,000 feet above the Colorado River. It’s designed to withstand 100 mph winds and has shock absorbers to keep the walkway from wobbling as people pass over.

The Skywalk has become a major tourist draw for the tribe that has about 2,200 members. Romero said about a third of the visitation is thanks to Jin and his tour companies. He’s also worked with the tribe to develop helicopter rides and whitewater rafting trips.

Efforts at arbitration have so far been unsuccessful. A hearing is scheduled next month in the tribal court on Jin’s request to force a meeting.

Attorneys for both sides – former Arizona U.S. Attorney Paul Charlton representing the tribe and former Colorado U.S. Attorney Troy Eid representing the developer – say the preferred method to settle the dispute is through arbitration.

Asserting eminent domain would send a bad signal, Eid said. “If the Tribal Council persists in this, it will be very negative for tribes across the country.”

Charlton said the tribe is reviewing its options and “if need be, the tribe is ready to go to court.”