By Cynthia Johnston
GRAND CANYON WEST, Arizona (Reuters) - As the muddy Colorado River flows in the plunging depths below, tourists gingerly step onto a glass walkway jutting out over the rim of the Grand Canyon for an experience that gives the illusion of walking on air.
Some pose with arms outstretched for pictures while others ease over a horseshoe-shaped skywalk that is the subject of a bitter tug-of-war between an Arizona Indian tribe on whose ancestral land it was constructed and a developer who spent at least $30 million to build it.
The tiny Hualapai nation, in a bold move that could serve as a test of the limits of the sovereign power of Native American tribes over non-members, exercised its right of eminent domain last month to take over the management of the site and kick out the non-Indian developer.
The dispute over the potentially lucrative Skywalk -- which all agree could draw up to 3,000 visitors a day -- pits the tribe's sovereign rights over a site it sees as its economic lifeblood against a developer's contractual right to manage the attraction for 25 years and share the profits.
"We've made this decision, and we've done it for what's in the best interests of the people," said Candida Hunter, 32, a member of the Hualapai Tribal Council who voted to take over the Skywalk as the dispute dragged on, abandoning a contract-mandated arbitration process.
"We've been in negotiations with them, we've tried to work with them. It was our last option really," she said of the seizure. "We just need to move forward now."
The dispute at the heart of the crisis appears to center on specifications including who was supposed to provide infrastructure -- power, water and sewer -- for the project, with both sides accusing the other of acting in bad faith.
What is not in dispute is that a visitors' center overlooking the Skywalk -- a beautiful building on the edge of the canyon with floor-to-ceiling windows where a restaurant might have been -- is nothing but a shell.
Construction on the center stopped several years ago -- the sides disagree as to why -- and the building lies unfinished and vacant, with bales of insulation piled up and gathering dust on its bare concrete floor.
Visitors who drive to the site, often as a day trip from Las Vegas, must traverse a long windshield-busting stretch on a dirt road. Others fly in by helicopter or plane to the reservation's busy airport.
The Hualapai council members say the unfinished site is an embarrassment to the tribe, which approved the project despite some internal objections about building on land roughly 30 miles from a place central to the Hualapai creation story. Traditional tribal belief places man's origin on Hualapai lands.
"I believe the canyon is a sacred place. The Hualapai look at is as a church. Why take trash and throw it in the church. I voted against it," said Philip Bravo, a former council member. "What does the tribe have out there? A half-finished building."
Angry at the developer, the tribe passed an ordinance last year creating a legal path to effectively cancel the developer's contract through the sovereign right of eminent domain.
The tribe set compensation for the seizure at $11.4 million, a sum they said represents the fair value of a project that the Las Vegas-based developer says is worth over $100 million.
"They took everything. And then the tribal court issued an order that we were trespassers if we were even there. You do understand this is like Hugo Chavez's Venezuela, don't you?" said Troy Eid, a lawyer for the Grand Canyon Skywalk Development Corporation, which built the skywalk.
There is little doubt that tribes can legally seize property for the public good, much like a state or the federal government. But by seizing a non-tangible asset of a non-Indian company as a way to escape a contentious business deal, the tribe may have stepped into untested waters.
"I think on first glance the tribe is exercising a power that they have. Whether they are exercising it wisely is a different question," said Addie Rolnick, an expert in Indian law at the University of Nevada at Las Vegas.
But there was no clear precedent on the limit of eminent domain. Rolnick said the Supreme Court had limited the power tribes may exercise against non-members in a series of cases starting in the 1970s, and there were signs suggesting some on the court believed tribes had no power over non-members.
"But the court has never actually held that, and it certainly has not addressed the specific question of eminent domain power," she added.
The developer has sued in federal court to halt the seizure, arguing the tribe was abusing its power to make an end-run around a contract that mandates disputes be resolved by arbitration. A final resolution did not appear imminent.
In the meantime, the tribe says it is hoping to get estimates from other developers on how much it might cost to finish the visitors' center to the tribe's specifications.
Ted Quasula, general manager for the Skywalk Development Corporation who said the tribe fired him from Skywalk management as one of their first acts when they took over operations, feared the seizure could impede future development.
"I've had many other Indians from other reservations tell me that, 'What's wrong?' He puts up $30-40 million, whatever it is, and then they want to kick him out? ... It makes us look kind of ungrateful," said Quasula, himself a Hualapai tribal member.
TOURISM A MAINSTAY
The tribe initially agreed to the project to secure its economic future, and has since seen tourism revenues soar to $40 to $50 million a year, more than double what they were in 2006, the year before the skywalk opened to great fanfare, Council member Waylon Honga said.
That increase is a testament to the tribe's ability in recent years to capitalize on its prime Grand Canyon location, although it does not direct Skywalk revenue. Due to the dispute, Skywalk revenue has been paid into a trust since 2010.
In the Hualapai town of Peach Springs, where tribal members live in modest one-story matchbox-style homes often surrounded by chain-link fences, that extra money from growing tourism has translated into a building boom.
The revenues, which the tribe is keen to protect, have helped build a brand new health department and a 30-bed juvenile detention center. The tribe hopes to break ground on a child care center by the year's end, Hunter said.
The tourism money also helps fund hefty tuition payments for 81 Hualapai youth enrolled in college full-time, as well as funding for meals on wheels programs and a cultural center where youth can study the tribal language.
"Tourism is what the Hualapai tribe does," Honga said. "We don't do casino gaming, we don't have any timber or oil or coal reserves. All we do is tourism. We do the rafts on the Colorado river. We have a hotel restaurant and we have tours at the Grand Canyon."
That's not to say the tribe hasn't looked into other methods of raising its revenues. But an attempt at casino gaming in the 1990s was unsuccessful -- the Hualapai reservation is too distant from major cities yet too close to Las Vegas.
The 2,200-member tribe has also ruled out uranium mining, and its traditional commercial income dried up in 1979 when Interstate 40 bypassed historic route 66, cutting the town off from revenue from passing travelers, tribal members say. A gas station in town that once served the route sits vacant.
While some members continue to have lingering concerns about unfettered development at the canyon, others envision developing the skywalk as a convention destination - complete with a luxury hotel, golf course, and perhaps, as council member Charlie Vaughn suggests, even a revolving cocktail lounge.
(Editing by Tim Gaynor)