(gentle music) (upbeat music) - Welcome to "The Newsfeed."

I'm Paris Jackson.

For almost two decades, the City of Cle Elum has had its eyes set on a sprawling real estate housing development that would rival Suncadia and bring many new homes to the downtown area.

In 2008, the city began negotiating a development agreement with City Heights Holdings, LLC.

After three years of public hearings and negotiations, the two parties signed a 25 year development agreement in 2011.

The city is now considering bankruptcy after an arbitrator slapped Cle Elum with a $22 million judgment in favor of the developer after they said the city violated that agreement.

Cascade PBS reporter Mai Hoang explains this ordeal between the developer and the city of Cle Elum.

(gentle music) As we know, real estate developments take years.

What was one key issue that caused this breakdown?

- It came down to disagreement over the original development agreement.

City Heights Holdings and its owner, Sean Northrop, felt they did a lot the, you know, public comment and environmental review during the period they negotiated and crafted the 2011 agreement.

The people who negotiated with Northrup and City Heights Holding, are not the same people in the city that was on staff in 2019 when Northrup approached the city to start securing subdivision permits for the project.

It's really clear, planning staff in particular, felt the agreement was lopsided in favor of the developer.

And that the developer still needed to proceed with a public comment and review.

- Everything came in a head in January when the Cle Elum City Council voted to move forward with bankruptcy.

How rare is that?

And what does it mean for the city to take that step?

- Municipal bankruptcy is very rare.

It's only been done once in the state in 1991, in North Bonneville and Skamania County.

That's because it's a really costing endeavor.

As you can imagine, bankruptcy attorneys are involved.

And even if payments are lower, or you work out something with the creditor, you're put in kind of a financial peril because it could impact your ability, for example, to borrow money in the future.

Which obviously for a city, that's pretty important.

However, the city felt that they had no other options.

Certainly paying the $22 million was gonna be difficult and well beyond the city's means.

But again, Northrup felt the city was using bankruptcy to get out really paying the whole amount.

He felt he was rightfully owed do to breaking the agreement.

- It appears the City of Cle Elum and the developer are at an impasse.

What's next?

- So while the city voted to move forward with bankruptcy, it's certainly possible as they enter this process they look into their options, they work with creditors, they might realize that bankruptcy might not work for them.

Especially if there's trade offs like an impact on credit rating, or your ability to borrow.

And Northrup maintains that he'd rather mediate and is willing to work with the city.

But he also feels that the city should be held accountable for what he calls, "Government overreach."

He felt the city, you know, should of followed through with the terms of the agreement.

And he's been vocal that if this could happen to him, this could be worse for someone like a small business owner if they get into a disagreement with the city.

- It was a pleasure speaking with you, Mai.

To read Mai's full story, head to cascadepbs.org (upbeat music) This Black History Month we're honoring one of Seattle's legendary artists, photographer Al Smith.

(gentle music) Born in 1916, Smith grew up in the Central District, and fell in love with photography at age 12.

(gentle music) Smith pursing his creative passion through much of the 20th century, amassed an archive of nearly 40,000 photos.

To learn more about Al Smith and read more profiles of prominent Black artists, visit blackartslegacies.com and keep an eye out for season four debuting this May.

(upbeat music) I'm Paris Jackson, thank you for watching "The Newsfeed."

Your destination for non-profit Northwest news.

Go to cascadepbs.org for more great local coverage.

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