Hualapai Nation ordered to pay $28.6 million to Grand Canyon Skywalk developer for first four years of management fees Future exposure for the Tribe estimated at $277 million
PHOENIX, Feb. 12, 2013 /PRNewswire/ -- In a stunning blow to the Hualapai Nation, U.S. District Court Judge, David Campbell has confirmed the $28.6 million arbitration award entered against the Tribe's wholly-owned corporation 'Sa' Nyu Wa, Inc. (SNW) in favor of Grand Canyon Skywalk Development (GCSD), builders of the Grand Canyon Skywalk. The judgment relates to unpaid management fees of the Skywalk from 2008-2011.
According to the court's Order, "SNW shall remit damages in the amount of $28,572,810.25 to Grand Canyon Skywalk Development, LLC, as set forth in the Aug. 16, 2012 Arbitration Order." GCSD now plans to go after more than $10 million sitting in a trust account held by SNW to partially satisfy the federal court judgment. GCSD will seek 100 percent of ongoing Skywalk ticket sales to satisfy the balance of the $28.6 million judgment.
Calling SNW's arguments "nonsensical," Judge Campbell roundly rejected SNW's position that the Dec. 31, 2003 Agreement between the parties permits an award of money damages against SNW in arbitration yet prohibits enforcement of that award in any court at any time. "Such a reading does not comport with SNW's clear waiver of sovereign immunity with respect to money damages and cannot be squared with the provisions discussed above," explained Judge Campbell in his Order.
The U.S. District Court's decision comes as GCSD launches a website, grandcanyonskywalkfacts.com that is dedicated to accurate reporting of facts regarding the dispute between GCSD and the Tribe. The site presents the developer's perspective and includes links to court decisions, sworn testimony and statements from tribal leaders, key legal documents and links to recent news.
According to Mark Tratos, attorney for GCSD, a related action filed in Tribal Court will determine the legality of the Tribe's condemnation claim or taking back of the Skywalk and GCSD's contractual rights. If the Tribal court says that the Tribe's forcible taking of the Skywalk on Feb. 9, 2012 was appropriate, then it will assess a value to be paid GCSD for the rights it will lose over 35 years – estimated to be $277 million. GCSD believes the condemnation action was unlawful and, by virtue of the Tribe filing that action, it has itself become subject to ongoing damages suffered by GCSD along with responsibility to share profits with GCSD going forward.
Tratos explains that his client and SNW had a written agreement to operate the Skywalk together that extends for 20 years and requires that they split profits from the Skywalk. GCSD also receives a discount on tickets to the Skywalk and the right to purchase up to 50 percent of the available tickets during the 20 years. Thereafter, GCSD continues to receive its discounted ticket price and the right to purchase up to 50 percent of the tickets for another 15 years.
Tratos says further that SNW does not have sufficient resources to pay the U.S. District Court judgment or the value of GCSD's rights over 35 years, as the parties had agreed. He adds, "David Jin, owner of GCSD, has no animosity against the Tribe. He knows that he invested $30 million of his own money to build the Skywalk and that the way he will recoup that investment and his future contractual rights is to resume operational control of the Skywalk."
The dispute between GCSD and the Hualapai Nation centers on revenue generated by 370,000 tourists per year visiting the marvelous glass platform, which was created 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. Consequently, GCSD could not complete construction, and that part of the project remains unfinished. While the Hualapai have a completed and functioning architectural masterpiece in the Skywalk since March 2007, the Tribe has not shared any revenue as agreed and has locked the developer out of the property.