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The Great Land Rush: Fractionated Land Issues at the Center for Katrina Jim Descendants and Tulalip Tribes

Quil Ceda Creek in Tulalip, Washington, flows across this land where the Ancestors fished and harvested and hunted, this land which Bah-hahtlh received in a deed signed by President Theodore Roosevelt in 1905, this land where Bah-hahtlh gave birth to children and raised her family.

But over the years, the land’s transition to the new economy has been troubled. First, Bah-hahtlh was deeded 160 acres, but part of it was among the 2,175 acres claimed by the federal government for ammunitions testing and storage during World War II. After the war, land was returned to the Tulalip Tribes; Bah-hahtlh’s descendants ended up with 56 acres.

In 1946, the family home was destroyed by fire. The Bureau of Indian Affairs (BIA) leased the land in the 1960s and subleased it to the state; the state removed 100,000 tons of dirt to build Interstate 5, reducing a 25- to 30-foot hill to a hole, but Bah-hahtlh’s descendants were never compensated. Off-road cyclists frequently trespassed on the land. Others illegally dumped their garbage here; a cleanup effort by conservation groups removed 125 junked cars and more than 1,000 tires from the property.

Family members say Bah-hahtlh, also known as Katrina Jim (1879-1950), left this land to her children and grandchildren with the desire that it help sustain them as it did their forebears. But now the land is caught up in another dispute – between some descendants and the Tulalip Tribes, which has purchased a majority interest in the property.

Some descendants and their attorney, Gabriel Galanda, of Galanda Broadman, PLLC of Seattle, Washington, claim the Tulalip Tribes denied a request by the corporation set up by the descendants, the Katrina Jim Corporation, to extend sewer and water service to the land for a proposed recreational development. That denial resulted in a lower appraised value of the land. The tribes then came in with an offer of $4.75 per square foot, or about $11.5 million. Over two years, the Tulalip Tribes bought enough shares to become a majority owner of the Katrina Jim Corporation.

Fractionated land trust issues have bedeviled tribal nations, individual owners and the BIA for generations. Some advocates for the Katrina Jim Corporation feel this case, though unique in its particulars, demonstrates overwhelming difficulties for multi-party owners of land trusts to develop land independent of federal or tribal government involvement. They say the sale represents the BIA's and the courts' preference for consolidating fractionated land into the hands of tribal nations, rather than individuals or non-tribal government Native-owned corporations. Thanks to the legislation of the Indian Land Consolidation Act in 1983 (ICLA), if a tribe acquires a 51 percent interest in a parcel of land, the BIA would compel the sale of the other 49 percent. With $1.8 billion of Cobell settlement monies allocated for the purpose of land consolidations, the subject of "forced sales" and fractionated land issues has the potential to impact the course of economic development in large portions of Indian country.

Two brothers, Walter and John Campbell, are seeking to have the sale overturned by the U.S. Department of Interior’s Board of Indian Appeals. They say the Tulalip Tribes artificially devalued the property by denying the Katrina Jim Corporation a connection to utilities, and that descendants are not getting fair-market value for the property.

They also allege that the BIA Puget Sound office colluded with the Tulalip Tribes on the deal. They say the BIA never acted on the corporation’s August 2009 request to lease the land for development, but responded within two working days to the Tulalip Tribes’ first purchase shares – for $879,674.74.

They’ve filed suit in U.S. District Court, seeking copies of written communications between the Tulalip Tribes and the BIA regarding the land purchase.

Tulalip Tribes Chairman Mel Sheldon is the common-law husband of Wendy Church, whose mother, Helen Campbell, was a 164-share beneficiary. Helen sold her shares to Tulalip for $869,674.

Sheldon was cautious about speaking about the case, citing litigation. But he said the tribes could not extend utilities to the Katrina Jim property without doing the same for others.

“There would have been a big lineup of property owners,” he said.

Shelton said Tulalip leaders have not had an “active discussion” about developing the site. “That’s going to be a discussion for future leaders, in a generation or two,” he said. “We’re concerned now with Quil Ceda Village.”

Things started to happen

Before the sale, shareholders were comprised of 34 descendants of Katrina Jim’s children, James, Elmer, Ella, Anthony, Edith, Katherine. Katherine Campbell’s eight children were the largest shareholders – at 164 shares, or 7.59 percent each, they held a combined 60.72 percent ownership. Cousins’ shares ranged from 96 to 8 each, or 4.44 to 0.37 percent.

John and Walt Campbell said the family offered to sell the land to the Tulalip Tribes in 1983 for $283,000 – roughly $639,000 in 2011 dollars – but Tulalip didn’t have the money at the time.

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When the Campbells inherited their mother’s shares in 1995, they hired an attorney and began exploring possible uses of the property. In 2004, the family sold a right of way to the Tulalip Tribes for an extension of Quil Ceda Boulevard.

The Campbells said, “things started to happen” when they brought Tulalip Tribes Councilman Les Parks onboard. Parks had served on the council from 1996-2006 and was involved in the development of Quil Ceda Village.

Parks helped the family form the Katrina Jim Corporation as a family land development enterprise, and became general manager. In June 2008, the family adopted bylaws and elected corporation board members.

At that time, the BIA appraisal of the Katrina Jim land – made at the Tulalip Tribes’ request – set the value at $4.75 per square foot, or $10.8 million. The appraisal states that utility service is unavailable to the property. In August 2008, the Tulalip Tribes offered the Katrina Jim Corporation $12 million, or $5.29 per square foot, for the land. The corporation rejected the offer, citing the tribes’ contemplated purchase of four developed acres elsewhere for $34.50 per square foot.

According to the Katrina Jim Corporation’s chronology, in November 2008 a local real estate company received an “unofficial offer” of $15 per square foot, or $34 million, for purchase of the land. The purchase would have required approval of all family members and would have taken the property out of trust, so the family asked the real estate company to pursue leases, not sale.

On May 12, 2009, Parks introduced plans for Coho Creek Village, which he described as a 450,000-square-foot “pedestrian friendly, lifestyle center.” It would be anchored by a family fun center, with miniature golf, a go-kart track and a movie theater. Lacking a Quil Ceda Creek utility connection, Coho Creek would have onsite septic systems and a well capable of pumping 50,000 gallons of water per day.

Parks said he had a letter of intent from the family fun center’s developer. But seven months later the developer backed out, Parks said, because Katrina Jim Corporation didn’t have the authority to lease the land to him. Parks said the family fun center would have generated $30 million in lease payments over a 30-year lease. The developer went on to build the Monroe Sportzzone, 23 miles away in the city of Monroe.

On June 14, 2010, Katrina Jim Corporation discussed a far more controversial idea: Allowing the Snoqualmie Tribe to lease land for a second casino, 56 miles from the Snoqualmie Casino in North Bend – and 1.2 miles from the Tulalip Casino Resort Hotel.

Shelton was more than surprised by the proposal. “Les Parks was a former Tulalip council member. We were very disappointed,” Shelton said. “But we weren’t worried. Because of the gaming compact with the State, the proposal wasn’t going to go anywhere.”

Shelton disputes Parks’ allegation that the Tulalip felt the Katrina Jim Corporation’s plans posed a threat to Quil Ceda Village, and that’s why the utility connection was denied.

“If the families had the resources to put something in there, it would have contributed to the area as a Snohomish County destination,” Shelton said.

Then, on July 16, 2010, the Katrina Jim Corporation met with BIA Puget Sound Agency Superintendent Judy Joseph to discuss the lease. Mike Taylor, attorney for the Tulalip Tribes, attended and said funds were available for shareholders interested in selling. That was on a Friday. On Monday, the first shareholder received a check for $879,674.74.

“It’s kind of hard when money is on the table,” Walt Campbell said as, one by one, relatives sold out.

Today, 45 percent of the land's owners, including descendants who sold their shares but now think they were given a below market value price, are challenging the sale.

One case, before Interior's Board of Indian Appeals, alleges the BIA refused to allow shareholders to commercially develop the land themselves. It also alleges the BIA allowed the sale without having notified all the landowners. 

A second case, filed by Walt and John Campbell before U.S. District Court Judge Ricardo Martinez in Seattle, seeks information about communications between the BIA and the Tulalip Tribes concerning the land – information that the landowners requested through the Freedom of Information Act in April 2010 and again as trust beneficiaries in 2011.