Cascadia development could wind up managed by YarrowBay, developer behind two big projects in Black Diamond

Depending on a couple of decisions by the courts and Black Diamond City Council, YarrowBay could very soon become king of the hill for master planned developments in the state – two in Black Diamond and The Cascadia Project just south of Bonney Lake.

Depending on a couple of decisions by the courts and Black Diamond City Council, YarrowBay could very soon become king of the hill for master planned developments in the state – two in Black Diamond and The Cascadia Project just south of Bonney Lake.

The Kirkland-based developer is currently participating in closed record hearings in Black Diamond for two of its master planned developments, The Villages and Lawson Hills.

As if seeking permit approval for two MPDs wasn’t keeping enough balls in the air, according to U.S. Bankruptcy Court documents filed May 31, YarrowBay could become a leading player for Cascadia.

Bankruptcy reorganization

The Cascadia project spans more than 4,000 acres located with plans for about 6,500 homes, making it the largest MPD in the state.

Cascadia filed for Chapter 11 bankruptcy Oct. 15, 2009.

The case is before Judge Karen A. Overstreet in the U.S. Bankruptcy Court in Seattle.

The disclosure statement for reorganization filed by Cascadia attorney Geoffrey Groshong with the Seattle bankruptcy court spells out a plan where the project will be purchased by TPG Opportunities Partners, YarrowBay Holdings and Obsidian Finance Group, based in Portland, Ore.

The plan stated TPG would kick in $49.5 million for 90 percent ownership of Cascadia, YarrowBay $4.4 million for an 8 percent share and OPG $1.1 million for 2 percent ownership. The group is referred to as Holdings.

A second entity will also be formed titled Servicing Entity, which will manage the Cascadia project.

According to the letter of intent from TPG and included in the court documents, YarrowBay will be 60 percent owner of Servicing Entity and Obsidian 40 percent.

TPG, which was formally Texas Pacific Group, is described in the court document as “one of the largest private equity firms globally, focused on leveraged buyout, growth capital, and leveraged recapitalization investments in distressed companies and turnaround situations.”

Cascadia hired Obsidian in January as a financial advisor. The firm is described in the document as a “hybrid advisory and investment group.”

If the judge accepts the plan, YarrowBay could be part of building more than 13,000 residences between east Pierce County and Black Diamond.

“We are waiting on a decision about the Cascadia project as we speak and (we) are excited about our proposal for the project,” Brian Ross, president of YarrowBay wrote in an e-mail. “If our proposal is accepted, we bring to the table an incredible team that combines the vision of the original team members and the financial strength of our new partners with homes scheduled to be available in the first quarter of 2011.”

The Villages and Lawson Hills in Black Diamond proposes about 6,000 residences with office, retail, industrial and schools.

YarrowBay also has a plan to development Summit Place, a 156-acre site in Maple Valley. The land is currently owned by King County, but is located inside the Maple Valley city limits.

Cascadia past and future

Patrick Kuo, the founder and president of Cascadia, began the project 20 years ago. Kuo’s vision was an employment-based community, with high tech and light industry, a golf course and a 500-acre free trade zone with seven schools.

The first major problem hit Cascadia in 2006 when a tunnel being drilled under the Carbon River allowing connection to the Orting wastewater treatment plan collapsed, delaying the project.

The next major problem came in 2008 when three builders backed out of purchasing lots for homes. As the recession deepened Cascadia was unable to come up with the cash to meet debt obligations, the largest being two loans for about $75 million from HomeStreet Bank.

The bank began foreclosure proceedings on the loans in 2009.

Cascadia filed a petition for reorganization and recapitialization and the court gave Cascadia until May 31 to file a plan for reorganizing and paying debts.

According to Ross, the plan means, “We are making every investor whole by paying 100 cents on the dollar.”

The reorganization document stated if the plan is accepted by the judge, HomeStreet would receive a $10 million payment on the loan debt with a repayment plan for the balance.

Kuo would be paid $150,000 per year for three years. From that money he would pay the interest on a $1 million loan.

More in News

Citizen group urges council to start pool planning

With the Sumner High School pool closing at the end of the 2018-2019 swim season, residents are asking the City of Bonney Lake to build a city pool to house the Panther and Spartan swim teams. A presentation on why the council should start planning a pool as quickly as possible is being held Tuesday, Jan. 23.

Teacher, student reconnect at living center after 66 years

A person can change in 66 years. At the very least, they’re going to look pretty different. So when Robert Terrell, 96, and Margaret (Peggy) Burley, 75, ran into each other at Bonney Lake’s Cedar Ridge assisted living facility last August, neither of them realized they had met before — at an elementary school, where he was a fourth-grade teacher, and she was a part of his first ever class.

Library’s art and writing contest returns to Pierce County | Pierce County Library System

Pierce County teens are encouraged to express themselves through writing, painting, drawing and more for the annual Our Own Expressions competition, hosted by the Pierce County Library System.

Sumner School District seeks name ideas for new elementary school

Want to name your new local school? Just fill out a short form by Jan. 26

Black Diamond hits the reset button

The new Black Diamond City Council wasted no time on settling in and testing the political waters. On their first meeting of the year, new Councilwomen Melissa Oglesbee and Erin Stout and returning Councilwomen Tamie Deady and Janie Edelman marched through a long list of agenda items, many of which reversed council policies and goals set over the last two years.

Judge reproaches Black Diamond mayor, former city council majority

In a summary judgement hearing, King County Superior Court Judge Janet Helson said she was troubled by both the actions of Black Diamond Mayor Carol Benson and former City Council majority Pat Pepper, Brian Weber, and Erika Morgan over the last two years concerning potential Open Public Meetings Act violations.

Man shot in Burnett; suspect turns himself in

According to the Pierce County Sheriff’s Department, the victim was driven to the Burnett Store in order to report he was shot by his brother. The suspect turned himself in approximately three hours later.

Garbage, water, sewer rates increase in Enumclaw

Having made the leap into a new year, Enumclaw property owners are now seeing increases to nearly all their utility rates. Here’s a look at the 2018 increases for city services, along with the financial impact on customers.

WA infant mortality rate below U.S. rate, disparities still remain | Department of Health

Washington ranks eighth in the nation for the lowest infant deaths, yet African-American and American Indian families still experience disproportionate rates of infant mortality.

Most Read