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Tuesday, July 23, 2024 | Back issues
Courthouse News Service Courthouse News Service

Arizona Tribe Seizes Grand Canyon Skywalk

PRESCOTT, Ariz. (CN) - The company that developed and managed the Grand Canyon Skywalk for the Hualapai tribe claims the tribe has seized the world-famous tourist attraction without the legal authority or financial wherewithal to do so.

Grand Canyon Skywalk Development (GCSD), owned by David Jin, who developed the glass-bottom walkway that hangs 4,000 feet above the Grand Canyon's remote western reaches, sued two Hualapai-chartered corporations, nine members of the Tribal Council, and other tribal officials, including two tribal judges, in Federal Court.

GCSD says the tribal council defendants voted on Feb. 7 to seize the tourist attraction. The next day, defendant Tribal Judge Duane Yellowhawk issued an ex parte order "condemning" the property, and on Feb. 10 the defendants "seized" it, according to the complaint.

"Defendants have engaged in these extreme machinations because they cannot account for millions of dollars owed to GCSD," the complaint states. "Rather than address the accounting failings of the tribal business, SNW, defendants assert they have a sovereign ability to simply erase GCSD from the December 31, 2003 Management and Development Agreement between GCSD and SNW ('2003 Agreement'), a binding and enforceable contract which granted to GCSD, among many other rights, the exclusive right to manage and operate the Grand Canyon Skywalk (the 'Skywalk') for period of several decades."

SNW is the lead defendant, 'Sa' Nyu Wa, a Hualapai-chartered corporation. The other tribal corporate defendant is the Grand Canyon Resort Corp.

GCSD claims the tribe cannot exercise eminent domain over the development, and that it lacks the financial resources and management experience to run the attraction. It claims that tribal leaders canceled an arbitration process and approved the condemnation in early February to avoid paying the "millions of dollars owed to GCSD."

The Hualapai tribe, which has about 1,500 members, has a sizable reservation along 100 miles of the Southern Rim, beginning about 40 miles west of the main tourist site at Grand Canyon.

'Sa' Nyu Wa has taken control of the Skywalk.

The tribe acted swiftly to take control of the attraction and dismantle the previous regime's systems, the complaint states.

"They immediately ordered employees to open the safes and took over all tickets that were on site," according to the complaint. "More disturbing is that the tribe immediately began to disable and take apart internal control systems that provide employee and public safety and revenue accountability. Video camera surveillance cables were cut. Terminals to the existing point of sales system which provided accountability were replaced by stand alone registers. The interface with the inventory system was also severed or bypassed so that there is no real time tracking of inventory. Critically, wristbands which used to be issued to visitors to prevent resale of ticket stubs by employees were replaced by tickets which could be reused by patrons or collected and resold by employees without accountability. Tribal representatives, including members of the tribal council and administrative officers informed the employees that they were in charge and that only tribal representatives could give orders or directives and that the former managers including David Jin and General Manager Ted Quasala were no longer going to operate the Skywalk."

Jin says it cost his company some $25 million to develop the Skywalk, which he estimates is now worth more than $100 million, based on projected earnings.

GCSD claims that revenue could drop significantly if the tribe is allowed to take control. It claims the tribe already has canceled programs meant to appeal to Asian tourists, who make up about one-third of the annual visitors to the Skywalk.

"Upon information and belief, the tribal representatives have determined that they will no longer serve suitable Chinese meals or Asian food which is important to these visitors and upon which many of the visitors rely because they have purchased tour packages which include food," according to the complaint. "The loss of operational control of the Skywalk and control over elements such as food and amenities will cause injury and damage to the reputation of David Jin, OTI, Y Travel and the Skywalk generally."

The parties have been fighting over the operation and control of the attraction since shortly after it opened in 2007, when "it became apparent to both parties that there were substantial irregularities in the numbers being reported to GCSD by SNW," the complaint states.

Over the years the tribe has refused to hand over profits and has interfered with Jin's management of the Skywalk in numerous other ways, according to the complaint.

Hualapai tribal spokesman Dave Cieslak told Courthouse News on Tuesday that the tribe took control of the Skywalk because Jin had failed to complete work promised under the 2003 agreement. Cieslak said that the lawsuit misrepresents the tribe's actions, and predicted that it would meet the same fate as two similar actionsfiled last year.

"It's disappointing that Mr. Jin would spread false allegations and attempt to mislead tourists visiting Grand Canyon West," Cieslak wrote in an email. "The Skywalk is open for business and operations are running better than ever under the tribe's management. Sadly, we predicted that Mr. Jin's army of lawyers from three different states would resort to desperate tactics like filing yet another federal court action. A federal judge has previously ruled that Mr. Jin needs to pursue this in Tribal Court, and we anticipate this latest action will be summarily dismissed - much like the two lawsuits he filed last year against the Hualapai people."

Jin seeks declaratory and injunctive relief to stop the tribe from using eminent domain to take control of the Skywalk.

Nevada-based Grand Canyon Skywalk Development is represented by Pamela Overton, with Greenberg Traurig in Phoenix.

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