Latest news with #CityHeightsHoldings
Yahoo
15-07-2025
- Business
- Yahoo
Washington town declares bankruptcy over $26M development dispute, leaving residents dreading what happens now
Cle Elum, a picturesque community in central Washington state, has been embroiled in a long-term land development dispute. After a lengthy legal proceeding, the city was directed by the courts to pay City Heights Holdings $25.9 million in damages. In reality, the city of about 2,200 cannot afford to pay the developer this eye-watering sum. With account garnishment coming into play, the city acted quickly to declare bankruptcy. While the move keeps the lights on, sewage flowing and wages paid for now, residents are worried about what happens next. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it 'It's a wonderful rural town, just a wonderful place,' resident Shawn Daly told KOMO News, "To tell you the truth, it's like a bad dream.' 'We bought out here with the hopes of this being a good investment and space. And if they're bankrupt, I mean, I don't know how that's going to affect our investment and just everything here in general,' Kyle Green told Fox 13 Seattle. 'It's a little scary,' Green added. The need to declare bankruptcy didn't happen overnight. It all started when the city entered into a land development contract with City Heights Holdings (CHH) more than a decade ago. When the deal went south, the developer and the city attempted to reach an agreement but could not. Essentially, the financial pressure on the city can be traced back to an arbitrator's decision requiring the city to pay CHH $22.2 million at 12% interest, a total of $25.9 million. After receiving this notice, the city began to negotiate with the developers in earnest to avoid bankruptcy. According to a press release from the city, it made 'increasingly generous' offers over a three-month mediation process. But, ultimately, the developer rejected the city's offers, meaning the city remained on the hook to pay the damages. In a statement to Fox 13, Sean Northrop, founder and CEO of Trailside Group, which operates CHH, said his team was surprised by the bankruptcy filing after a draft resoultion was proposed on July 20. He wrote, in part, "Instead, the city abruptly went silent — then filed for bankruptcy. This leaves a critical question unanswered: If the city genuinely intends to continue 'good faith negotiations,' why didn't it respond to the mediator's draft before initiating a bankruptcy filing? And if it found any part of the agreement unworkable, why not say so?" With a city budget of around $5 million, Cle Elum's mayor said there simply wasn't room to keep up with the debt payments. 'We felt like we had to take this step in order to, you know, stop the clock," Mayor Matthew Lundh told KOMO News. After bankruptcy, garnishment is off the table, which gives the city enough leeway to keep essential services running. 'We have to be able to make payroll. We have to be able to, you know, keep water and sewer going," Lundh said. The decision to declare Chapter 9 bankruptcy was reached when the Cle Elum City Council voted unanimously in favor of the move. But, this doesn't remove the city's financial obligation to CHH. Instead, it allows a Bankruptcy Court to step in and approve a more sustainable resolution, likely with lower payments that allow the city to continue operating. Read more: Americans are 'revenge saving' to survive — but millions only get a measly 1% on their savings. Understandably, many residents are concerned about this ongoing situation. 'The bankruptcy thing is a bit worrisome for the residents here, myself included,' Holly Tolen, who lives and runs a business in the town, told Fox 13 Seattle. Residents have a host of concerns that range from possible tax increases and job security to property values and municipal services. 'I don't know how it's going to affect them. I don't know how, you know, how are they going to survive? Are they going to be having extra taxes?" Daly told KOMO News. Municipal bankruptcy is relatively rare. But when they happen, it can spell trouble for residents. When a city or town declares bankruptcy, it usually needs to increase its income, lower its spending or a combination of both. Any of these changes can negatively impact residents. Generally, residents might see a combination of increased taxes, higher service fees and reduced benefits for workers. These changes can impact the quality of life in the community. For example, if workers receive fewer benefits, it might be difficult to attract top-performing paramedics or police officers, which could mean lower-quality service for residents. So far, Cle Elum officials have shared their expectation of maintaining city services and keeping up with the payroll. But, it's too early to determine how this decision will play out in the wallets of residents. This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here's how to buy the coveted asset in bulk Here are the 6 levels of wealth for retirement-age Americans — are you near the top or bottom of the pyramid? Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Money doesn't have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Bloomberg
25-06-2025
- Business
- Bloomberg
Small City in Washington State Files Rare Bankruptcy Over Developer Dispute
A small city in Washington State filed a rare municipal bankruptcy after failing to reach an agreement with a developer over a $26 million court judgment. Cle Elum, a city of 2,200 about 80 miles east of Seattle, said it couldn't afford to pay the debt to developer City Heights Holdings LLC, and was insolvent.
Yahoo
29-01-2025
- Business
- Yahoo
‘I don't have optimism:' Cle Elum one step closer to declaring bankruptcy
This story was originally published on The small town of Cle Elum, Washington is one step closer to declaring bankruptcy after a special meeting and vote by its city council Tuesday night concerning how to manage a recent judgment against them for $22.2 million for failing to make good on land development deal they made with Issaquah-based home building company, City Heights Holdings (CHH), more than a decade ago. In a 5 to 2 vote, the city council approved a resolution that provides the city with the option to file for Chapter 9 bankruptcy at any time — a process that could take months or years to finalize and would potentially lower the city's bond rating making it more difficult to borrow money in the future. It would also potentially make funding departments like the city's police and fire departments, schools and social services challenging to fund. What led Cle Elum to consider bankruptcy? In 2011, Cle Elum entered into their housing development contract with CHH to build 950 homesites across 358 acres north of downtown. At the time, both parties understood the local housing market may not be ready for such a large development project because it was still recovering from the 2008 financial crisis. Instead, the contract provided CHH a 25-year construction window and sole discretion to determine when market conditions were ready. Cle Elum pledged to support the project in various ways, like fast-tracking permits, when ready. However, in 2019, when CHH determined they were ready to begin building the community, it appeared Cle Elum was not and expressed they were no longer satisfied with the agreement, adding the deal was outdated and claimed the it benefited CHH more than the city. By 2024, growing frustration on both sides came to a head and the two sides entered into arbitration. Retired Judge Paris Kallas ruled in favor of CHH and awarded the $22.2 million judgment. 'The city sought to add new conditions to the contract,' Kallas wrote in his ruling. 'And the city failed to follow the contract's bargained-for expedited permitting process.' More details: Developer hopes to resolve $22M dispute as Cle Elum faces jarring bankruptcy The multimillion-dollar judgment is a gigantic sum for Cle Elum. The sleepy town of 2,300 residents, tucked along Interstate 90, near the Eastern face of the Cascade mountains, manages a general fund budget of just $5 million. They've said publicly they simply cannot afford to pay the money they owe CHH, or the 12% interest, which amounts to $7,300 a day, also ordered to be paid by Judge Kallas. Developer, Cle Elum City Council differ CHH said it made several attempts to a conversation, or what they call 'direct collaboration' with Cle Elum's mayor and city council to work out a payment plan or enter some other sort of deal to get their money and help Cle Elum from entering the bankruptcy process. If Cle Elum does file for Chapter 9, the chances of CHH recovering the full judgment become slim. 'We're not afraid of bankruptcy, we just think it's the most horrible experience that could happen to the city and it's completely avoidable,' CHH Founder Sean Northrup said during the public comment period at Tuesday night's city council meeting. 'We think there are ample opportunities for the city, within its resources, as I understand them, to … get into conversations and have meetings and avoid Chapter 9. I hope that's what you choose to do and again we're at a point further down the road without a lot of progress yet, so we really need to move on to what you choose to do and then we'll deal with what process you pick.' Ranking the future: WA lawmakers eye overhaul of local elections with ranked choice voting However, Northrup's comments were met with friction from at least one city council member. 'I do not believe City Heights has shown any authentic concern for the city of Cle Elum or understanding of the reality of our finances and the rules governing them,' Steven Cook said right before the council's final vote. 'The city is faced with no good options here, only options that are less bad than others.' One option other than bankruptcy that was discussed at the special meeting included asking taxpayers to foot the $22.2 million in the form of a bond. However, Cle Elum City Council member Ken Ratliff pointed out a bond would include at least 6% interest, would present challenges to pay it off and could drive up the cost of living beyond what residents were willing to take on. Moments later, the council rejected a resolution that would direct the city to consider all available alternatives to bankruptcy while looking for strategies to strengthen better financial stability as it continues to provide essential services to residents. 'I appreciate your optimism,' commented Ratliff right before that vote. 'I don't have optimism.'
