City Heights Cle Elum

06/25/2025

STATEMENT FROM CITY HEIGHTS HOLDINGS

June 25, 2025

In response to the City of Cle Elum’s June 25 press release:

City Heights Holdings (CHH) was surprised by the City’s decision to file for Chapter 9 bankruptcy, particularly given how close the parties were to finalizing a resolution just days earlier. Contrary to the City’s statement, mediation had not broken down. After a 13-hour session on June 16, involving full participation from the City’s legal, financial, and elected leadership, the mediator circulated a comprehensive draft agreement on June 20 reflecting substantial consensus on nearly all material terms.

CHH reviewed that draft and agreed with the framework in substance. Only one item remained open (non-monetary in nature) and related to whether the City was willing to fully leverage existing tools and resources available to it. CHH expressed flexibility and was open to reasonable alternatives. That issue was never framed as a condition to agreement, and remains a solvable detail.

At no time did the City indicate to CHH or the mediator that it was rejecting the June 20 draft, nor did it propose a “final and best offer” or communicate a breakdown. No specific objections were shared. 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?

Equally misleading is the City’s assertion that bankruptcy was required to release garnished funds. By statute, those funds could not be seized before mid-July. Moreover, on May 13, CHH offered in writing to extend the writ deadline in exchange for a nominal payment an offer the City ignored, despite having multiple weeks to act.

We continue to believe the mediator’s June 20 draft which was developed with thoughtful input from the City’s own team offers a workable and sustainable resolution. If the City agrees that the framework reflects shared intent, and that only minor clarifications remain, the parties could conclude a deal swiftly and cooperatively.

CHH greatly appreciates the effort and professionalism of the City’s mediation team: councilmembers brought forward-thinking leadership; the mayor provided vital historical and fiscal knowledge; planning staff offered actionable land use solutions; and legal and financial advisors were constructive and collaborative. The mediator, Al Smith of Perkins Coie, led the process with clarity and fairness.

Bankruptcy was not inevitable. It still isn’t.

If the City affirms that the mediator’s draft captured the substance of agreement, and that the remaining issue is simply a matter of implementation or substitution, then the solution is within reach. “That’s right” would be the beginning of resolution, not just for CHH, but for Cle Elum’s residents and future.

CHH remains prepared to complete the deal in that spirit or to protect its rights through the court process, if required. But our hope is for closure, not conflict.

06/25/2025

RE - June 24th, 2025 City of Cle Elum Bankruptcy Filing

City Heights Holdings (CHH) participated in three full-day mediations with the City of Cle Elum, most recently on June 16, alongside the City’s legal counsel, elected officials, planner, engineer, and a mediator jointly selected by both parties.

On June 16, CHH agreed to substantial financial concessions including multi-million-dollar reductions and a 23-year payment structure tailored to the City’s financial capacity. The mediator confirmed that the parties had reached near-complete agreement.

On June 20, the mediator distributed a final draft settlement agreement. Three days later, without warning or further discussion, the City voted to pursue bankruptcy.

CHH has not been contacted since. We are grateful to have reached agreement with our lender on terms well within the City’s ability to pay, made possible only through major CHH concessions.

At this point, collection efforts are now led by our lender, not CHH. Still, we believe a fair, long-term settlement that avoids bankruptcy and protects essential services remains in the City’s best interest.

We encourage residents and stakeholders to ask the City why such a reasonable resolution was not accepted.

For media inquiries: [email protected]

Seattle Times -

Cle Elum, Kittitas County, filed for bankruptcy over a $26 million debt owed to a developer amid a legal dispute over a long-stymied housing project.

02/07/2025

Leadership isn’t about making excuses. It’s about making decisions. The right ones.

Right now, the City is offering a solution that isn’t a solution at all, raising taxes and fees on residents and withholding available resources while ignoring the real issue. The arbitration ruling made it clear: specific consultants were responsible for much of the damage. And yet, these firms are still getting contracts. Meanwhile, the people, the ones who trusted the system, are expected to pay the price. That’s not just bad policy. That’s bad leadership.

And let’s talk about commitment. We’ve been open and seeking discussions since November 9th. The City said it wanted a facilitator to moderate a real conversation. Great, we'd welcome that! But here we are, three months later. No facilitator. No mediator. No appointment. No time scheduled. Nothing. What are they doing?

Here’s the reality: We can’t remain flexible forever. And we won’t play along while the City resists providing transparency and clarity, choosing instead to drop breadcrumbs and send everyone on a treasure hunt. That’s not how serious leaders operate. It’s beneath them.

Yes, third-party claims, insurance recoveries, city assets and future revenue potential must be on the table. Yet, rather than explore real solutions, the City is acting as if it has no options beyond raising taxes or declaring bankruptcy. That’s just not true. There are options. There are tools. There are resources.

So here’s the big question: When are we meeting? With whom? Let’s talk about your plans, your assets, and the tools available to avoid your nuclear option.

Because here’s the thing: We’ll be ready. We’ll participate. Whether you choose bankruptcy or a transparent alternative that avoids it, that’s up to you. But in the end, everyone will know, you had the choice.

And great leaders? They make the right choice.

01/18/2025

Thank you to all those who have commented online and voiced your opinion at the recent City Council meeting regarding the City’s consideration of bankruptcy. It is great to see the outreach and passion that we share for asking the City leadership to avoid this mistake and to move the city forward responsibly.

In full transparency we are posting the correspondence to and from the City following the January 14th council meeting.

As many of you are aware, as of today the City liability is $22.9m and growing. On the 14th, the City voted to pay $100,000 to City Heights and waive a future $400,000 infrastructure commitment, in return for agreeing to mediate at some unknown date in the future . City Heights has provided a timely response to both the City’s attorney and directly to the Mayor and Council. You can view all the correspondence here :

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01/14/2025

A Statement from City Heights – Thank you Mayor Lundh for providing the FAQs to your constituents. There have been many communications over the last several months between the City of Cle Elum and City Heights, many of which may have been difficult to capture in a short FAQ response. In the spirit of full transparency, City Heights has provided responses to your statements and Frequently Asked Questions. We remain open and committed to a meaningful resolution. https://heyzine.com/flip-book/CityHeightsResponsestoCityFAQs.html

Contrary to public statements made by Sean Northrop and other representatives of City Heights regarding the City’s unwillingness to meet to discuss a potential settlement in lieu of bankruptcy, it was the City that initially reached out to City Heights to schedule a mediated discussion before taki...

11/15/2024

https://www.dailyrecordnews.com/news/cle-elum-to-pay-city-heights-22-million-for-breaching-development-agreement/article_5b62e660-a1fe-11ef-891e-4bb30eb6d250.html

Cle Elum will have to pay more than $22 million to a land developer after a King County judge ruled the city breached its development agreement with the company.

11/12/2024

Puget Sound Business Journal

https://www.bizjournals.com/seattle/news/2024/11/11/washington-city-pay-millions-development-breach.html?csrc=6398&utm_campaign=trueAnthemTrendingContent&utm_medium=trueAnthem&utm_source=facebook&fbclid=IwY2xjawGgYvVleHRuA2FlbQIxMQABHQ7tykYSbcZVBO14rAeYxUODge_WILwpjIFZdE0aHUNQBvuScAtwlZ2pGw_aem_uoBECs8kVwYwgfcZApAV2A

There has been tension for years between the project and the tiny town 83 miles east of Seattle.

11/08/2024

https://heyzine.com/flip-book/PressReleaseCityHeightsHoldings

King County Judge Rules City of Cle Elum Owes More Than $22 Million to City Heights for Breach of Development Agreement

The latest of 3 arbitration decisions in favor of City Heights in ongoing dispute with City of Cle Elum; City Heights developers seeking to work collaboratively with City on reasonable payment plan

CLE ELUM, Wash. (Nov. 7, 2024) — City Heights Holdings, LLC, has been awarded $22,230,175 for the significant damages caused by the City of Cle Elum’s repeated breaches of the City Heights Development Agreement (“DA”). The ruling issued on Nov. 5 by retired King County Judge Paris K. Kallas is the latest chapter of City Heights’ dispute with the City over timely permit approvals required by the project’s DA.

While City Heights is pleased with this third ruling administered against the City of Cle Elum over the past few years, City Heights is disappointed that the matter was not resolved prior to arbitration.
City Heights leaders remain willing to work with the City of Cle Elum to address the damages and make the situation more manageable for the City and will consider partial payments over time along with reasonable non-cash offsets that could reduce the total amount to be paid by the City.

“We hope that the most recent decision will motivate City leaders to promptly change course and work cooperatively with City Heights in consideration of all city stakeholders,” stated Sean Northrop, developer of City Heights. “City Heights is open to engagement by the City, and we hope that would happen before the City takes other measures that could harm the City’s financial status and creditworthiness.”

He added, “At the end of the day, what’s most important is that we’re able to realize, together, a long-standing vision of a healthy, vibrant future of the Cle Elum community.”

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03/09/2024