Stillaguamish development plans: Up in smoke
Published 10:18 pm Sunday, August 15, 2010
ARLINGTON — Seven years ago the Stillaguamish Tribe started buying hundreds of acres of land in north Snohomish County.
It was part of an ambitious plan to expand the tribe’s reach and to create jobs and make money. Its Angel of the Winds casino was expanded onto some of the new land.
Other dreams included a hotel, an amphitheater and ball fields, said Dave Nelson, an Arlington real estate consultant hired by the tribe in 2002. During his time with the tribe, tribal lands grew from 117 acres to nearly 800, according to county property records.
“It was going to be a city,” Nelson said. “An entire city.”
Today those dreams are falling apart, Nelson said.
Earlier this year, he said, tribal leaders told him his contract with the tribe was finished and insisted that any businesses connected with him had to leave tribal land.
Stillaguamish tribal leaders and their attorneys declined to comment.
Nelson said the tribe no longer wanted to work with him because members of the Goodridge family, the tribal leaders who came up with the plan to buy the land, pleaded guilty after they were caught selling smuggled cigarettes that earned them more than $55 million.
They are now in federal prison, and the tribe wants nothing to do with them.
When he signed on, Nelson said he was given free rein to pursue the purchase of almost any piece of land within an area the tribe considers its historic region.
The tribe spent about $33 million over six years to buy property.
“We had plans to buy all the land from 300th Street all the way up to the smoke shop,” Nelson said, referring to the tobacco store now owned by the tribe on Highway 530. “It would have set the tribe up for years to come.”
Nelson built a biofuel plant on tribal land and said he supplied financing for the tribe’s methadone clinic.
Nelson said his contract with the tribe extends to 2012.
More than 100 acres are in limbo, land that investors bought on behalf of the tribe and the tribe agreed to buy from them, he said.
If the tribe doesn’t pay up, Nelson said, he and the investors he found for the deals are planning to sue.
American Indian tribes usually are protected from lawsuits by outsiders because they are sovereign nations.
Nelson said the Stillaguamish can be sued because the tribe waived its sovereign immunity as part of every deal he struck.
Key figure
Nelson said he and Eddie Goodridge Jr., the Stillaguamish tribe’s jailed former leader, trusted one another.
Goodridge gave Nelson carte blanche to represent the tribe, Nelson said, and backed it up with the agreement that Nelson could sue the tribe if anything went south.
He acknowledges that over time tribal business and his personal business overlapped.
According to state records, Nelson leveraged his connections with Goodridge, and his position in the land deals, to use the tribe’s sovereignty to benefit his own businesses.
Several deals, including a land purchase he handled for the Goodridge family, and methadone clinics he opened 2,000 miles away in Oklahoma, were publicly presented as partnerships with the Stillaguamish tribe.
According to state records, Nelson is the key figure around which at least a dozen tribe-connected businesses revolve.
Some are development and investment companies centered on Indian land. For example, in 2005 he handled the tribe’s purchase of about 100 acres just west of Arlington along I-5. Within a year, Nelson slipped past state red tape, obtained business permits from the tribe, and built a biofuel plant there.
Nelson worked with the tribe until late last year, when the Goodridge family’s crimes caught up with them. Longtime tribal leader Edward Goodridge Sr., his wife Linda, his son Eddie and their cousin Sara Schroedl pleaded guilty to a conspiracy involving the sale of smuggled and untaxed cigarettes.
The younger Goodridge, known in the Arlington area for his quick temper, intolerance for naysayers and love of expensive cars, was stripped of his title as the tribe’s executive director.
Nelson was left out in the cold.
“Eddie’s hands were on everything I did,” Nelson said. “The tribe wants to get rid of all of that.”
Cigarettes and land
Nelson signed on with the tribe just as it was on the cusp of a transformation.
With little more than 200 members, the Stillaguamish have long lived in the economic and political shadow of the nearby Tulalip Tribes, a confederacy of about 4,000 American Indians.
Goodridge Jr. was a brash 20-something who’d been elected by his people to the tribal council and given the chance to shine as the tribe’s executive director. It wasn’t long before he announced plans to build a tribal casino.
To make way, Goodridge arranged to raze the tribe’s 30-home village, angering many tribal members who lived there. He asked Nelson to find new homes for those families. Today, they live scattered throughout Arlington and the surrounding area.
In early 2003, with the casino project under way, Goodridge and his family formed a company they called Native American Ventures.
Both Goodridge men and their cousin were on the tribal council at the time, and they voted to lease a smoke shop on tribal land at Island Crossing to Native American Ventures.
They kicked out Stormmy Paul, a Tulalip who for three years had run the smoke shop. Practically overnight, Native American Ventures took over the space and began operating the Blue Stilly Smoke Shop, selling smuggled cigarettes without paying the state’s tobacco tax.
Goodridge Jr. told The Herald multiple times that even though the smoke shop was a family business, most of the money went to the tribe. He even told state officials that the smoke shop was a facet of the tribal government, according to a statement the tribe submitted to federal court in 2008.
The tribe says it never saw a dime of the $55 million the Goodridges made.
The Goodridge family also bought about 60 acres of land near the smoke shop — land he also said would serve the tribe’s interests.
Records show that the tribe never took official ownership of the property. The Goodridges sold that land this year, about a month after heading to prison.
“I bought it through Dave Nelson,” said Leo Clark, the new owner. “He handled everything.”
‘Came back every year’
Some landowners in north Snohomish County say Nelson is well-known for his interest in buying their land.
Chris Bateham and her husband own 54 acres along Highway 530. Over the years, locals and visitors, attracted by their picturesque barn, have asked whether the property was for sale, she said. Bateham told them it wasn’t. They would talk about the barn, breathe fresh country air, and enjoy a chat, she said.
Nelson was different.
“He came back every year,” Bateham said.
In 2007, when Bateham and her husband decided they might sell the place within a year, Nelson was the first to hear about it, she said.
“He told me he would pay $100,000 more than the best offer we got,” she said.
When Batehem didn’t bite, she said Nelson offered her a $700,000 house he owns at Kayak Point as a down payment.
The offer was “bizarre,” Bateham said. “He offered all kinds of things in about a 15-minute period.”
Nelson denies ever offering his home as a down payment. He once offered it as an exchange for a piece of land the tribe wanted to buy, he said, but never as a down payment. He currently rents the house to a Stillaguamish tribal member, and lives in a $1.5 million home in Stanwood he built on land he bought in 2003.
Snohomish County Councilman John Koster, whose district includes the Arlington area, said he’s heard complaints about Nelson’s land-buying tactics for years.
“It was a situation where he’d say, ‘Well, the tribe’s going to get it anyway,’” Koster said.
Landowners also were suspicious when Nelson offered far more than they thought the land was worth.
For example, the tribe bought one 3.6-acre parcel in 2006 for $500,000. That land currently is assessed at just over $150,000. In 2005, the tribe bought about 100 acres of land along I-5 for just over $1 million. That land is assessed at about $300,000.
That’s because landowners jacked up the selling price when they knew the tribe was buying, Nelson said.
They knew that if the tribe converted the land to federal trust status, he said, local zoning codes would no longer apply and it could be developed however the tribe wished.
“They knew the land was worth more to the tribe,” Nelson said.
The tribe spent about $33 million on land between 2002 and 2008, according to county records. Many of those deals were made using nontribal investors’ money, Nelson said.
Biofuel and methadone
One Nelson-affiliated investment company, Pilchuck Group, in 2006 bought more than 100 acres along I-5 west of Arlington. Nelson said he handled that real estate deal on behalf of the tribe, which intended to buy the land from the investors.
Within months, Nelson and a small group of businessmen opened Standard Biodiesel, a biofuel plant, on that land.
When the tribe bought that land in 2007, the tribe signed a lease with Standard Biodiesel allowing it to continue operating there.
Nelson was key to positioning the start-up on tribal land, said Bob McCall, a spokesman for Standard Biodiesel.
“Being on tribal land simplified the permitting process,” he said. “We were able to build a very sensible business, very quickly.”
But early this year, McCall said, the tribe told Standard Biodiesel to get off its land, even though the company’s lease wasn’t up. The company is in the process of moving its equipment to another location, he said.
Nelson is no longer involved with Standard Biodiesel, said John Schofield, president of the company.
Nelson also helped open the tribe’s methadone clinic in 2003. Goodridge faced a wave of opposition to the clinic, but brushed that off and moved forward.
“Because of tribal sovereignty, we were able to cut through the bureaucratic hassles,” Goodridge then told Indian Country Today, a newspaper aimed at American Indians.
Local real estate investor Al Dabestani said he loaned money to the tribe, at Nelson’s request, to start the clinic.
“I never worked directly with the tribe,” Dabestani said. “Everything was through Mr. Nelson.”
In 2004, according to state records, Nelson formed Native Health Systems, a company that offers health clinic management services to American Indian tribes.
Since then, Nelson has opened three substance abuse clinics for tribes, all in Oklahoma.
A photograph of Shawn Yanity, a tribal councilman, was in Oklahoma news reports of one clinic’s grand opening. Yanity was the tribe’s chairman at the time.
At the event, Yanity thanked the Oklahoma tribe for working with the Stillaguamish to end drug addiction, according to a local news report.
Though Native Health Systems is Nelson’s private business and separate from the tribe, Tom Ashley, the tribe’s longtime health services director, for years worked for both entities, Nelson said. Ashley left his job with the tribe this year, and now only works for Native Health Systems, Nelson said.
Nelson said he’s never made any money off the clinics and that the tribe has never paid him directly for consulting. Instead, he said, his compensation was from real estate transactions he arranged for the tribe.
“I had a very successful real estate business before I began working with the tribe,” he said. “I have lots of clients I work with.”
Nelson has a 2001 letter from the Goodridges, sent on tribal letterhead, listing all the benefits the Stillaguamish could offer a partner. Those included tax credits and write-offs for working with a minority group, low or no taxes on business set up on tribal land, and tribal jurisdiction, among other benefits.
“They came to me, not the other way around,” Nelson said, waving the 2001 letter as proof.
Unfinished business
Nelson said he’s willing to part ways with the tribe, but wants the Stillaguamish to fulfill what he considers their obligations.
A handful of investors who have staked millions of dollars on about 100 acres of land have been left hanging, he said.
“The tribe performed well on every past deal we’ve done, and we hope they do the same here,” said Dabestani, one of the investors involved in that transaction.
In the meantime, Dabestani said he’s working directly with the tribe. Tribal leaders don’t want to work with Nelson anymore and asked Dabestani to invest in several parcels of land for them, Dabestani said.
“Mr. Nelson is not involved in those deals,” he said.
Nelson said his work, protected by the tribe’s waiver of sovereign immunity, would have transformed the Stillaguamish from a rural community into a wealthy nation, had he continued with the Goodridges’ development plan.
Tribal leaders, in a statement submitted to the federal judge who handled the cigarette case, said Eddie Goodridge was driven by “arrogance and greed.”
“By no stretch of the imagination could one conclude” that Eddie Goodridge and his family sought to better the tribe through his actions between 2002 and 2008, tribal leaders said in the statement.
That’s not true, Nelson said.
All the deals Nelson and Eddie Goodridge partnered on were meant to help tribal members he said.
“This is heartbreaking to me,” he said.
Krista Kapralos: 425-339-3422, kkapralos@heraldnet.com.
