Cle Elum files for bankruptcy over $26M debt to developer over delayed housing project (Hannah Everman, KOMO News, June 26, 2025)

Lesson: my friends, no government worthy of the name should ever agree to cram-down arbitration or sign developer-drafted contracts with devious developers.  From KOMO NewsL

Cle Elum files for bankruptcy over $26M debt to developer over delayed housing project

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by Hannah Everman, KOMO News Staff

Wed, June 25th 2025 at 5:38 PM

Updated Thu, June 26th 2025 at 10:17 AM

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FILE - A photo showing the outside of the City of Cle Elum City Hall building. The City of Cle Elum filed for bankruptcy Tuesday amid fallout with a developer over a $26 million debt from a legal dispute stemming from a long-delayed housing project. (KIMA/SBG)

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CLE ELUMBANKRUPTCYCITY HEIGHTS$26 MILLIONHOUSING PROJECTCHAPTER 9DEVELOPERLEGAL DISPUTE

CLE ELUM, WASH. — The City of Cle Elum filed for bankruptcy Tuesday amid fallout with a developer over a $26 million debt from a legal dispute stemming from a long-delayed housing project. 

In court filings, the City said it is "insolvent" and filed for Chapter 9 bankruptcy following City Council approval to protect the City's "limited resources" while it continues to work toward a resolution with the developer, City Heights Holdings, LLC. 

The bankruptcy filing is in response to a $22.2 million damages award issued by an arbitrator in November following a dispute over the City Heights mixed-use development project that was entered into in 2011. Those damages have now reached $25.9 million due to interest accruing at 12%, according to a City press release.

The City of Cle Elum is about 80 miles east of Seattle in Kittitas County with a population just over 2,000, according to the 2023 census. The City employs about 29 people and has an annual budget just under $5 million, according to a recent report.

The development was planned to have up to 926 dwelling units on 358 acres in Cle Elum around the area north of 6th Street along the ridge overlooking the City. However, according to a statement from Cle Elum Mayor Matthew Lundh last year, many things had changed with the City's administration and the developer between when they entered the agreement and when development efforts began in 2019, leading to "differing views" on the project. 

The City Heights Development Agreement was entered into in 2011. City Heights initiated discussions with the City about moving forward with development in 2019," the mayor's statement from 2024 reads. "Between the time that the agreement was established and development efforts initiated, the City’s administration as well as personnel for both the City and City Heights changed. Given the time that had passed and changes in personnel for both parties, there were differing views on the interpretation and meaning of various provisions in the 2011 Development Agreement, including the applicable process for reviewing permit applications as well as environmental concerns. The City did its best to work with City Heights’ requests and comply with its obligations.

The dispute has been developing for years, but has come to a head this year as mediation sessions were not leading to any resolution. 

A statement from the City Wednesday said officials made "increasingly generous offers during the three months' long mediation process, but the City's final offer was rejected by City Heights." 

City Heights Holdings allegedly initiated garnishments to seize the City's bank accounts prior to their final mediation session on June 16, according to the City's statement, which prompted Cle Elum officials to seek Chapter 9 protections after its final offer was rejected at their final mediation meeting. 

A copy of the City of Cle Elum's declaration for Chapter 9 bankruptcy protection.Click here to view the PDF file.

"We did not make this decision lightly,” said Mayor Matthew Lundh on Wednesday. “For months, we pursued every reasonable avenue to reach a fair and responsible settlement with City Heights. Unfortunately, we were unable to do so. Our priority continues to be protecting Cle Elum’s residents, essential services, and our financial future. Chapter 9 allows us to do just that.”

The Chapter 9 filing does not remove the City of Cle Elum's financial obligation to City Heights, but it will allow the City to work toward a "more sustainable resolution" that will likely "reduce the City's total payment obligations to reflect the City's financial realities."

"The City believes it has made its best offer given its limited resources and unwillingness to burden the City in a way that will require curtailing city services or raising taxes to a level that will drive residents and businesses out of the City," officials said. 

The City of Cle Elum is only the second city in Washington state to file for bankruptcy. The first city to claim bankruptcy was North Bonneville in 1991, Bloomberg reported. 

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KOMO News has contacted City Heights Holdings for a response to Cle Elum's bankruptcy filing but has not yet heard back.

ANNALS OF TRUMPISTAN: U.S. Inflation Accelerated in June as Trump’s Tariffs Pushed Up Prices (Colby Smith, NY Times, July 15, 2025)

Under ignorant, uneducated, angry, retaliatoy imperious Imperial President DONALD JOHN TRUMP, is our Nation is abusing tariffs?  Punishing Brazil when we have a trade surplus?  The numbers do not lie.  Democrats have always been better for the economy.  From FDR to Truman to JFK, to Jimmy Carter, to Bill Clinton to Barack Obama to Joe Biden, Democrats have always protected working people.  From The New York Times:

U.S. Inflation Accelerated in June as Trump’s Tariffs Pushed Up Prices

The Consumer Price Index rose 2.7 percent from a year ago, as the global trade war started to bite.

Listen to this article · 4:14 min Learn more

A chart showing inflation, which was up 2.7 percent for a year through June, and inflation that excludes energy and food prices, which was up 2.9 percent.

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Year-over-year change in the Consumer Price Index

Source: Bureau of Labor Statistics

By Karl Russell

By Colby Smith

Colby Smith covers the U.S. economy and the Federal Reserve.

July 15, 2025Updated 8:55 a.m. ET

Inflation accelerated in June as President Trump’s tariffs started to leave a bigger imprint on the economy, keeping the Federal Reserve on track to hold interest rates steady when policymakers next meet this month.

The Consumer Price Index rose 2.7 percent from a year ago, the swiftest pace since February, data released by the Bureau of Labor Statistics showed on Tuesday. That is slightly higher than expected and is up from an annual pace of 2.4 percent in May.

“Core” inflation, which strips out volatile food and energy prices and is seen as a reliable gauge for underlying price pressures, also shifted higher. Those prices were up 2.9 percent from the same time last year.

Over the course of the month, prices rose 0.3 percent, a notable pickup from a 0.1 percent increase in May. Core prices rose 0.2 percent.

The June data still reflects only the initial impact of Mr. Trump’s global trade war. Products most exposed to tariffs, like household furnishings, saw prices jump 1 percent, significantly higher than the 0.3 rise last month. Prices for appliances, specifically, rose 1.9 percent, up from 0.8 percent. The apparel index increased 0.4 percent, snapping multiple months of declining prices.

Gasoline prices rose 1 percent in June, after falling 2.6 percent the previous month. Grocery prices also rose, ticking up by 0.3 percent in June, or 2.4 percent from the same time last year.

Economists expect price pressures to intensify over the coming months, especially if new tariffs the president has threatened against the European Union and a host of other countries in recent days are imposed on Aug. 1 as planned.

Breakdown of the inflation rate, by category

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Sources: Bureau of Labor Statistics, New York Times analysis

 

By Christine Zhang

Up to this point, inflation has been more muted than feared when Mr. Trump returned to the White House. That has emboldened the president and his top advisers to dismiss the latest set of warningsfrom economists about the damage steep tariffs could have on consumers and businesses across the country.

Prices for both new and used cars declined in June, while airfares slipped 0.1 percent.

What economists and policymakers fear most is a stagflationary shock in which inflation rises as the economy flatlines or, worse, contracts. Before the latest trade escalation, the Federal Reserve saw the risks of that outcome receding. Now, the risks are rising once again.

Signs of accelerating price pressures will make it much more difficult for the central bank to restart interest rate cuts that have been on hold since January. Officials have instead been wedded to a “wait-and-see” approach, opting to keep borrowing costs steady until they have a clearer sense of how Mr. Trump’s policies — which beyond tariffs include a crackdown on immigration, sweeping tax and spending cuts, and a broad deregulatory push — will impact the economy.

For the Fed to cut interest rates, it either needs to have in hand evidence that inflation is indeed under control and not at risk of flaring up, or that the labor market is weakening a lot more. So far, neither has come to pass, suggesting there is still little urgency among most officials for the central bank to make a policy move.

Some divisions have emerged, however, with a handful of policymakers calling for a reduction in borrowing costs as early as this month. But the recent economic data, and Mr. Trump’s latest trade broadside, has dashed those hopes. The Fed’s next policy decision will be on July 30.

The Fed’s patient approach has angered Mr. Trump, who has incessantly demanded that the Fed lower interest rates significantly. As part of his pressure campaign against the central bank, the president has taken to berating Jerome H. Powell, the Fed chair, on a nearly daily basis and has even gone so far as to call for him to resign.

Colby Smith covers the Federal Reserve and the U.S. economy for The Times.