Grand Canyon Skywalk faces rocky path


At its widest point, the Grand Canyon stretches for 18 miles, a mere bunny hop compared with the vast divide separating the operator of the canyon's Skywalk on its western rim and the American Indian tribe he has partnered with to develop the world-famous attraction.

David Jin, the Henderson businessman who financed and constructed the $30 million Grand Canyon Skywalk, has filed papers in federal court to keep the Hualapai tribe from pushing him out and taking full control of the tourist magnet and the millions of dollars it generates.

At issue: Each side claims the other is responsible for the multimillion-dollar cost of running power, water and sewer to an unfinished visitor center next to the Skywalk.

At stake: $100 million in anticipated tourism revenue generated over the 20 years remaining on Jin's 25-year contract to design, build and manage the Skywalk, with profits and expenses split with the tribe.

The smoking gun: A 2004 letter Jin says spells out which entity is responsible.

"This is extremely unfair," said Jin spokeswoman Aimee Romero. "David put $30 million into this project and he hasn't been paid since 2007."

The Grand Canyon Skywalk is a one-of-a-kind, glass-bottomed and canti­levered observation deck that juts 70 feet from the rim of the canyon 4,000 feet above the Colorado River.

Billed as the highest man-made structure on the planet when it opened in 2007, tourists can walk out on its horseshoe-shaped glass floor to get a unique perspective of the canyon.

Located roughly two hours from Las Vegas, the Skywalk has become a popular day-trip destination for locals and tourists.

The travel website GlobalTreks.com recently listed it as one of the world's top seven skywalks, citing the "monster view" it provides.

Designed by Las Vegas-based MRJ Architects, the Skywalk Jin envisioned would give tourists a view only eagles could enjoy before it was built, he said in a 2006 interview.

The Skywalk has 100 employees; 20 are Hualapai.

FALLING OUT

In 2007 the Skywalk grossed more than $9 million, Romero said, adding that the tribe has not opened the books to outside auditors since then.

"There's no transparency," Romero said. "He (Jin) doesn't have access to the tribe's books, what they are spending, what the profits are."

Romero said the Hualapai tribe's status as a sovereign nation doesn't mean the tribe can take property without paying for it, but she said that's exactly what the tribal council tried to do April 4 when it approved a new eminent domain ordinance.

Jin in court papers says the ordinance was enacted specifically to push him out.

Coincidentally, the tribal council's action came one week after a March 28 missed deadline to open the visitor center.

Federal law explicitly prohibits American Indian tribes from taking property without paying fair market value, but the ordinance dictates that the tribe can take property without even conducting an appraisal.

A federal judge in Phoenix last week said he would rule on the issue if the tribe uses the ordinance to take action against Jin.

If allowed to stand, there are un­intended consequences to the ordinance that could have long-term impacts throughout the nation's Indian country.

Romero said investors would be reluctant to back any economic development projects on reservations if there were nothing to keep the host tribe from confiscating property down the road.

Romero said she has heard the tribe will offer Jin $16 million, but tribe spokesman Dave Cieslak said he is unaware of any specific number.

"I don't know what the Skywalk is worth, but I can tell you this: Mr. Jin's $100 million estimate is ludicrous," Cieslak said.

"The council is weighing its options," he said.

HE SAID, HE SAID

An arbitration hearing, which would include a review of the tribe's revenue, was scheduled for last Friday but was postponed at the request of the tribal council. It was to be heard at the Hualapai Tribal Court in Peach Springs, Ariz., home to roughly 400 Hualapai.

Romero said that was the third postponement the tribal council has requested.

"They're just delaying things hoping to enforce eminent domain," she said.

Cieslak said the tribe was left with no other options as the unfinished building threatens the Skywalk's viability. He said the building is an eyesore, left untouched for years.

"People have to walk through there to get to the Skywalk. Wires are exposed. There's dirt. There's holes in the walls where doors are supposed to be, and the grand entrance is boarded up."

Construction is slow because transporting equipment and material to the western rim of the canyon is difficult, and work must be done at night so the Skywalk can be open to tourists during the day, said Manuel Mojica, a project manager with Executive Construction Management.

His firm is also replacing the Skywalk's glass floor.

Work on the visitor center ceased two years ago when nothing more could be done without utilities, Mojica said.

The tribe reportedly was to bring utilities to within five feet of the building, where the builder would stub in, Jin asserts in court papers.

Mojica said he understood the tribe was supposed to provide utilities, but he wasn't certain on the point.

Neither Jin nor the contractor can run utilities to the site, because they cannot legally access reservation property outside of the project area, Romero said.

Cieslak said the tribal council tried in vain over four years to negotiate with Jin regarding utilities.

"All the tribe wants Jin to do is deliver the utilities,'' Cieslak said. "To say the tribe is disappointed would be an understatement. Mr. Jin has refused to keep his promises, and his lament is completely without merit."

UTILITY FUTILITY

Romero, however, produces a letter Jin wrote in 2004, addressed to Steve Beattie, the chief financial officer of the tribe's Grand Canyon Resort Corporation.

In that letter, Jin touched on a need for the tribe to improve the dirt Diamond Bar Road, the only access to the Skywalk site, as well as utilities. The tribe had asked for a reduction in the cost of running shuttle buses to the tourist attraction.

In the letter, Jin agrees to give the tribe a break, saying "... but you need to build the infrastructure such as the road, water, power, communication, etc. The infrastructure is essential for us to have success."

"This is our smoking gun," Romero said. "I don't think they've seen this yet."

Romero said 1.5 million people have visited the site since it opened. Other than the roughly $9 million generated during its first year, however, no one outside of the tribe knows how much money the Skywalk has earned.

In his lawsuit, Jin alleges discrepancies between the tribe's stated revenues and the number of tickets sold.

He alleges officers of the Grand Canyon Resort Corporation, the tribe-owned business that controls the site's revenue stream, "were embezzling and absconding with Skywalk ticket sales."

"That's outrageous and insulting to the Hualapai," Cieslak said. "This is atrocious. There has been no fraud. All of this is being done because he has not completed even the most basic aspects of construction."

A PLEA FOR UNDERSTANDING

In a letter sent to every tribal member last week, Jin said he hoped to appeal to their "sense of fairness and honor and to ask for your help in resolving this issue."

Jin said he put everything he had on the line to create the Skywalk that would create jobs and profits for the tribe, and is heartbroken over the council's actions.

"I have known the Hualapai people for more than 20 years, and I know your honorable code,'' Jin wrote. "These are not the actions or characteristics of your community; this is the failure of the members of your Tribal Council."

He warned them the new eminent domain ordinance doesn't apply only to nontribal parties.

"They can decide whatever small amount they want to pay you for your property, if anything at all, and force you out of your home or business without notice.

"If they can do this to me, there is nothing stopping them from taking from you, too."

Countered Cieslak: "All the tribe wants is for Mr. Jin to keep his word."

Contact Doug McMurdo at dmcmurdo@reviewjournal.com or 702-224-5512.

 

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