Grand Canyon Skywalk developer asks court to enforce $28.6 million binding arbitration award against Hualapai Nation
PHOENIX, Sept. 12, 2012 /PRNewswire/ -- The developer of the Grand Canyon Skywalk (GCSD) is asking the U.S. District Court in Arizona to enforce payment of the $28.6 million award it won against the Hualapai Nation. The two sides have been in dispute ever since the Hualapai tribe stopped paying management fees to GCSD.
The Skywalk, which is still in operation, is the horseshoe-shaped viewing platform that provides breathtaking views 4,000 feet above and 70 feet over the west rim of the Grand Canyon.
In a motion filed with the district court on September 11, the Skywalk developer cites the August 16th award from the American Arbitration Association, which says the tribe's actions were unlawful. In the decision, the arbitrator sides with Skywalk developer David Jin saying, "Mr. Jin and GCSD kept his promises to the tribe; breached no material provision of the 2003 agreement; and, in the bargain, suffered damages."
The dispute centers on revenue generated by tourists visiting the glass platform, which was conceived and built by GCSD. While GCSD has met all of its obligations in the construction of the Skywalk and associated visitors' center, the Hualapai tribe failed to provide power, water and wastewater disposal preventing the completion of the visitors' center by GCSD. That part of the project remains unfinished.
The Hualapai tribe contends that GCSD agreed to finance construction of the Skywalk, a visitors' center, as well as all on-site and off-site utilities. However, according to the Hualapai's own leadership, it was always the Hualapai's responsibility to provide water, sewer and electricity to the site. Tribal member and former Hualapai Grand Canyon Resort Corporation (GCRC) Interim CEO, Robert Bravo, Jr., said in a 2012 sworn affidavit, "I know from being both a member of the tribe and involved with GCRC in various capacities that it was always anticipated that the tribe would solely be responsible for bringing utilities to Eagle Point and Skywalk. … Importantly, the tribe has been attempting to get federal funding to install these utilities for the time I have been involved with GCRC."
In his statement under oath in the arbitration, Steven Ray Beattie, former chief financial officer for the Hualapai and the employee who negotiated the contract with GCSD principal, David Jin, testified that water, power, paving the road, providing a waste treatment plant and a phone line were "all in our land-use plan and were well understood to be the tribe's responsibility to do, without question."
Specific contractual provisions between GCSD and the Hualapai require that any disputes between the parties be resolved at binding arbitration. The Hualapai tribe initially participated in the process, agreeing in the selection of the arbitrator, exchanging some information and paying to participate in the arbitration. However, when it became clear that the Hualapai tribe would have to turn over point-of-sale information showing the number and pricing of tickets sold by the tribe, the Hualapai Tribal Council instead voted on a resolution to exercise eminent domain, effectively taking the Skywalk back for themselves and cutting GCSD out of the 25-year deal. The Skywalk is anticipated to generate more than $100 million over the next 10 years.
"The actions of the Hualapai tribe are inappropriate and I believe a judge will confirm that it was illegal," said Ted Quasula, former chairman of the tribe's corporation board of directors when the agreement was signed with GCSD. "This business grab by my own tribe hurts all Native American nations because it raises serious questions for American and foreign investors who must have a level of trust when dealing with tribal nations across the United States."
Hualapai tribal leaders are perplexed by the actions of a handful of tribal members who have strong-armed other tribal members. Jin's attorney, Mark Tratos, calls the tribe's action "a risky legal maneuver and a campaign to discredit GCSD and David Jin – all in an effort to retain the profits for themselves."
According to a sworn affidavit of Louise Benson, Hualapai Tribal Council chairwoman, "I believe the passing of the resolution, taking Mr. Jin's interests, is both embarrassing to the tribe and to Mr. Jin and was done with no plans for proper operation and management of the Skywalk whatsoever."
Jin says he is looking forward to the United States District Court enforcing his $28.6 million award, but is saddened by the actions of some members of the Hualapai and hopes that the tribe resolves its internal struggles. "I want to get back my partnership with the Hualapai. We need each other to deliver a world-class experience for American and foreign tourists who travel by the thousands each day to enjoy the Hualapai culture and the Grand Canyon, in its entire splendor, from our Skywalk," he said.