Pinoleville tribe sued over failed Hopland restaurant, bar

The former owner of the historic Hopland Inn in Mendocino County is suing the Pinoleville Pomo tribe, its chairwoman and its former business consultant, claiming improper and fraudulent business practices arising from the tribe’s operation of the inn, which is currently shuttered and undergoing renovation under new owners.

San Luis Obispo-based developer Forster-Gill Inc. is seeking more than $1 million, alleging fraud, breach of contract and breach of purchase agreement, including unpaid rent in connection with the 2009 lease, according to Mendocino County Superior Court records.

The lawsuit, filed in April, also alleges the tribe refused to return the hotel and liquor licenses to the property owner after the contract breach.

It names tribal Chairwoman Leona Williams and the tribe’s former business consultant, Michael Canales, of San Diego. Neither could be reached for comment this week.

The Hopland Inn project began in early 2009, when the tribe entered a lease agreement that included a $1.5 million option to buy the Victorian-era inn. The property, which has changed hands and opened and closed multiple times in recent years, is once more in the process of being restored under new ownership with reported plans to reopen later this year.

The tribe only sporadically operated the hotel’s restaurant and bar before shuttering it again after a water pipe burst in January 2012, causing significant damage, according to Gregory Connell, who represents Forster-Gill.

“It wasn’t well attended,” he said of the hotel.

Connell said his client tried to work things out with the tribe, even as they failed to make many of the lease payments of about $8,000 a month.

“We kept extending the option to purchase,” he said. “Eventually it became clear they couldn’t or didn’t want to purchase” the hotel.

It wasn’t until early 2016 that the tribe vacated the inn, leaving it in terrible condition, according to the lawsuit. Connell said his client resold the hotel for less than its original asking price because of its disrepair.

The tribe’s Colorado-based attorney, Padraic McCoy, did not return phone calls. But, according to a legal document seeking dismissal of the lawsuit, the tribe is claiming it cannot be sued because it is a sovereign nation.

Connell said the tribe waived sovereignty as part of the lease/purchase agreement. Such waivers are crucial for business deals made with non-tribal members and off-reservation projects because tribes otherwise are not subject to state or federal court decisions, he said. He said waivers will become more important as tribes increasingly seek business deals outside of their tribal lands.

The court has yet to rule on whether the sovereignty waiver is valid, Connell said.

The Hopland Inn, also known as the Thatcher Inn, was just one of the tribe’s economic development endeavors in recent years.

In 2015, Canales helped the tribe launch an economic development project based on marijuana production and processing. The project, which at the time would have been the first large-scale, tribe-sanctioned cannabis growing and processing operation in the country, abruptly died when local sheriff’s officials raided the operation, seizing some 400 plants. The tribe currently has plans to build a 90,000-square-foot casino on the site of a former car dealership just north of Ukiah. It received funding through Indian Land Capital Co., LLC to purchase the 8.8-acre property for $2.24 million early this year.

The company does not require land be used as collateral, relying instead on the “full faith and credit of the Indian nation,” according to its website.

McCoy, of Berg, Hill, Greenleaf & Ruscitti in Boulder, which specializes in casino development, was involved with the property purchase, according to Mendocino County records.

You can reach Staff Writer Glenda Anderson at 707-462-6473 or glenda.anderson@pressdemocrat.com. On Twitter @MendoReporter.