Judge Nora Bahamondes ruled the courts must first determine who rightfully owns the land before deciding whether anybody was trespassing, one of the clan's lawyers, Mata Atan, told The Associated Press. Dueling claims to the property are now before the Supreme Court.
The $800-a-night hotel has the potential to provide a major economic boost to the remote Pacific island also known as Rapa Nui, where mysterious statues of giant heads dominate the landscape.
The development includes the island's first movie theater, a cultural center and a museum, promising up to 100 jobs and an extended ripple effect that could make life easier for many islanders, said Jeannette Schiess, who runs the project.
"Once our hotel is recovered, we'll have meetings and conversations with the democratic authorities and representatives of the island; we've always been ready to talk. We don't have anything to offer those who have opted for violence and the use of force; there's no such thing as 'peaceful takeovers,'" she wrote in an e-mail.
The Hito family says the land was swindled from their illiterate grandmother and then passed illegally into private hands during Chile's dictatorship. As many as 50 members of the clan took over the hotel last August, demanding property rights and rent from the development.
Their protest was joined by other families who insisted that Chile honor an international indigenous peoples treaty it signed in 2008 that requires governments to pay compensation for usurped land.
Despite calls by the Inter-American Commission on Human Rights to avoid any violent actions, a prosecutor ordered police to forcibly evict the last handful of Hito family members from the property Sunday.
Atan, who said the property was surrounded by a tight police cordon Tuesday, complained that the government rushed the eviction because it knew it couldn't criminalize the Hitos while the Supreme Court considers their claims.
But prosecutor Samuel Nunez said the 17 Hito clan members were formally charged before the judge who suspended the criminal case. "All were charged with trespassing, with breaking into a dwelling, with intimidation," Nunez told La Tercera newspaper, adding that one clan member, Eddie Tuki, also was charged with threatening a hotel worker.
The protest was the last of nearly two dozen by islander families who were inspired to seize their ancestral properties. Police fired pellet guns in December to remove them, injuring more than a dozen islanders and several officers. Pictures of native women and men with bloodied heads were published internationally, shattering the tranquil image that attracts many tourists.
Schiess says she can prove in court that her company has clear title to the property where it has spent $50 million developing the luxury Hangaroa Eco Village & Spa - and where it has been losing $1 million a month since the protests began. She said its private ownership was grandfathered in under a 1979 law limiting land ownership to native islanders.
"Even though our loss is enormous, and in reality we won't be able to quantify it completely until we recover the hotel, we think the biggest loss has been the damage to the relaxed and peaceful image of the island, which will cost much to recuperate," Schiess wrote in the e-mail.
Schiess added that she is willing to consider a new ownership arrangement, perhaps something like a cooperative for the benefit of islanders, to help resolve the land conflicts.
"One example could be to transfer the land to a nonprofit foundation, based on the island. That could also be a vehicle for supporting projects that help sustainable development," she said.