Halvorson, who showed up in the early 1960s, began selling canyon flights in 1965; he claims he was the first to do so, but the National Park Service reports that other entrepreneurs offered canyon flights as early as the 1920s.
Modern Tusayan took shape as a short strip of nondescript motels and restaurants strung along the four lanes of State Highway 64, with a few residences scattered behind the businesses. The Thurston family still owned about 80 percent of Tusayan's 144 acres in 2002, according to a Colorado College study of the community. Chris Thurston, a family spokesman, said in that study: "The properties were developed in a hodgepodge manner, with no real distinctive style."
These days, the highway bustles with traffic: Some 17,000 people drive it to and from the park on an average day. The airport -- the fourth-busiest in Arizona -- squats on the community's southern edge. The sounds of helicopters and airplanes envelop Tusayan all day long. Yet there is still no public school, medical clinic, library or cemetery in Tusayan; the locals have to visit the national park to find those services.
The Percassi Group -- which was founded by a former Italian soccer star, Antonio Percassi, and runs European developments such as high-end malls and Ferrari dealerships -- first focused on Tusayan in the early 1990s, acquiring 2,118 acres of private inholdings scattered in the Kaibab National Forest. The company sought to exchange those parcels for 272 acres of federal land adjacent to Tusayan's business strip, where it wanted to build a $250 million mixed-use project called Canyon Forest Village.
That proposal triggered years of debate. The U.S. Forest Service approved the land exchange and the Coconino County Board of Supervisors granted rezoning for the development. But opponents forced a countywide referendum, called Proposition 400, on the zoning change. They worried that Canyon Forest Village would dry up springs inside the park, despite the developer's pledge at the time to not rely on groundwater. They also warned that it would divert tourism dollars away from Flagstaff and another city, Williams, which are both about an hour's drive south and market themselves as gateways to the park. In 2000, county voters rejected the rezoning by a 64-36 percent margin.
So the Italian developers shifted their strategy: They decided to create a local democracy they could influence more easily. The Arizona Constitution says that communities must have a population of at least 3,500 to incorporate, but in 2003, the state Legislature passed a law allowing communities within 10 miles of a national park or monument to incorporate as long as they have at least 500 residents.
As the locals debated whether to form a town government, Gruppo Stilo worked on improving its relations with Halvorson, who had opposed Canyon Forest Village. In 2004, Gruppo Stilo and Halvorson became partners in a key 18-acre parcel that now houses an RV park called Camper Village, right on the highway.
A mix of business owners and residents created a six-member task force to study incorporation. The task force met for four years and never made a formal recommendation, but five of its six members later expressed their opposition to incorporation. The town had so few property owners that it would be impossible to avoid conflicts of interest, they said. Furthermore, many doubted that Tusayan even reached the 500-person threshold. Those doubts persist today, despite the U.S. Census' conclusion in 2000 that 567 people lived in the area.
The Halvorson/Gruppo Stilo team pushed for a local election on the question of incorporation in September 2008. Gruppo Stilo tapped the expertise of one of Arizona's oldest and most powerful political consulting firms, the Policy Development Group Inc., and used a Scottsdale entity called Grand Canyon Exchange, which lists the same address as Gruppo Stilo's U.S. spokesman, to funnel more than $133,000 into the pro-incorporation campaign. It also sought to win over the locals by donating $50,000 to the Grand Canyon public school district days before the election.
The opposition was led by the Thurston family, the other longtime local power, whose holdings still include the 216-room Red Feather Lodge. The Thurstons have long opposed major expansion of the community; they think commercial projects such as outlet malls would disrupt Tusayan's character and put additional stress on the already limited water supplies. They went so far as to hire Rose & Allyn Public Relations, a Phoenix firm, to represent their view. Sample rhetoric from that firm's Jason Rose: "This is an international issue about a political cartel that has been allowed to form and control the South Rim boundary to one of the world's natural wonders."
Local voters rejected incorporation in the 2008 election by a margin of 78 votes to 62 votes, amid allegations of voter fraud by both sides. Gruppo Stilo hardly missed a beat; it launched another incorporation effort, with its affiliate, Grand Canyon Exchange, funneling money into a campaign committee called United for Tusayan. In turn, United for Tusayan hired the same Phoenix consulting firm that worked on the first incorporation campaign -- Policy Development Group -- to manage the second campaign.
Longtime political operative Ron Ober manages the Policy Development Group. Ober has deep ties with Democratic Party leaders throughout the West. He served as former Arizona Sen. Dennis DeConcini's chief of staff from 1976 to 1983 and managed DeConcini's initial 1976 campaign and two subsequent successful campaigns in the 1980s, a period when he became embroiled in controversy.