Parks: A new model for developing fractionated lands

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Coho Creek Village, in Tulalip, Wash., is the name of a regional shopping and entertainment center a tribal family is planning to develop on its trust land.

Thirty-four family members own shares in title to the land their grandmother, Katrina Jim, a Snohomish Indian who acquired land in 1904 on the Tulalip Tribes Reservation through the U.S. General Allotment Act.

For a minority of shareholders who are hesitant about the corporation structure, BIA involvement provides a check and balance on the corporation.

More than 100 years later, her heirs have developed a national innovative plan for organizing themselves into a corporation, and making use of the more than 50 acres she owned.

Across Indian country, the fractionated ownership of land held in trust has made its use all but impossible. The difficulty of communicating among dozens, if not hundreds, of heirs is a major barrier in addition to probate delays. BIA oversight, as determined in the Burke Act of 1906, is predicated on the assumption that Native owners are incompetent and need oversight.

The result: it’s almost impossible for land owners to use millions of acres on reservations across the United States. These policies have impoverished Indian families and nations in which prime land cannot be used because of fractionation. The Cobell case has raised national awareness about the mismanagement of trust fund accounts held for a century by the Interior for individual land owners.

Now, the Katrina Jim Corp. has established a plan to use corporation structure, tribal law and sound business practices to turn land with fractionated ownership into a valuable piece of real estate.

Jim’s land was in a remote area east of Puget Sound when she obtained it. The deed was signed by President Theodore Roosevelt; it provided her children support through a farm and salmon bearing Quil Ceda Creek that crossed the land. But over a century later the landscape has changed, and Interstate 5 was built on the allotment’s eastern boundary. A BIA lease allowed a company to excavate 20 feet of soil from the entire acreage to make the freeway embankment, destroying most of what Katrina Jim would have recognized about her land. Jim’s daughter received no compensation for this lease.

Katrina Jim’s heirs own one of the largest remaining commercially-zoned properties on the interstate north of Seattle.

Yet now, Interstate 5 is the West Coast’s major traffic artery. Katrina Jim’s heirs own one of the largest remaining commercially-zoned properties on the interstate north of Seattle.

The highly successful Quil Ceda Village, a federally chartered city, is immediately south of the land. It is home to the Tulalip Resort Casino and the Seattle Premium Outlet Mall. Quil Ceda Village has 24,000 cars per day pass through. Enterprises in the village produce annual sales of $300 million resulting in $25 million in tax revenues for the state of Washington. The casino attracts six million customers annually.

Located just north of this commerce, Katrina Jim’s heirs could have remained paralyzed by federal oversight and ever-growing fractionations. And since 1995, when Jim’s surviving daughter Katherine Campbell passed away leaving the inheritance to be worked out in probate, it had. But in 2008, the family approached me for help. As a business owner and former Tulalip Tribes board member, I knew corporations could be established under the laws of the tribe.

I am sharing this story now because any Indian family with the will to organize itself in this way can. Like others, Jim’s heirs had no start up money. Instead, they leveraged the prospect of this prime real estate, determining it would not be sold out of trust, nor would be undervalued. I joined them as the corporation’s general manager. Others followed: Red Hummingbird Media Corp. as communications consultant; Coldwell Banker Bain commercial broker Michael Fear of Everett, Wash.; architect Tim Twietmeyer of Dykeman, Everett, Wash; and attorney Gabe Galanda of Williams Kastner, Seattle.

Board President Walt Campbell with his brother John T. Campbell, the board secretary, traveled the region tracking down heirs and obtaining their support.

Across Indian country, the fractionated ownership of land held in trust has made its use all but impossible.

In June 2008, a meeting was called. The heirs voted by well above a 51 percent majority, as required by the BIA, to establish the corporation under tribal law. In that vote, the land owners also became shareholders in the Katrina Jim Corporation.

Shares were divided according to the fraction that each heir owns.

A five member board of directors was voted from among the shareholders, per the requirements of the corporation’s bylaws. Later a sixth was added.

The corporate bylaws were specifically written so the board could assume day-to-day authority for the corporation. With heirs spread from Southern California to Victoria, British Columbia, the demands of communicating or collecting signatures are prohibitive.

The board president has authority to sign sub-leases with tenants, eliminating the BIA requirement that land owners agree to every lease. The only lease the BIA has oversight of is the 50-year ground lease of the entire property to the Katrina Jim Corp. by the land owners.

The BIA will also have a role in negotiating with the shareholder on behalf of the land owners, regardless that they are the same. The BIA will oversee collection of the ground lease payment and distribute it to the land owners though their IMM accounts.

(At this point the ground lease has not yet been signed pending review by Interior Department solicitors. We expect a positive outcome shortly.)

For a minority of shareholders who are hesitant about the corporation structure, BIA involvement provides a check and balance on the corporation.

Within months of listing the land, and despite the state of the economy, the corporation has leads on anchor-quality tenants who meet the family-friendly, upscale, culturally-relevant standards set by Katrina Jim’s grandchildren, nieces and nephews.

Les Parks is general manager of the Katrina Jim Corporation. For more questions about how this model works contact him by e-mail at lesparks@cohocreekvillage.com.