By Daniel Nash

The Courier-Herald

The developers of what would have been the largest planned development in Pierce County filed for Chapter 11 bankruptcy protection last week.

Cascadia Project LLC filed the initial documents Thursday, reportedly to prevent HomeStreet Bank from selling off the majority of the site in auction Friday.

The bankruptcy could directly affect the city of Bonney Lake. Cascadia owes the city $200,000 and had agreed to pay $750,000 more, for the purpose of mitigating the expense of traffic-related construction along state Route 410.

Traffic projects include traffic lights outside of high schools and on the Sumner-Buckley Highway. Some of these are already under way.

SR 410 already experiences congestive traffic during peak commute periods. A developed and populated new community, let alone the largest one in Pierce County, would have likely created even more congestion, said Don Morrison, Bonney Lake city administrator.

“Cascadia was approved by Pierce County as a planned community, with commercial developments near the residencies,” he said. “A selling point for it was that it was a self-contained community, almost like a company town where people lived where they worked, and they wouldn’t create much outside traffic. How practical that is, given how people commute these days, I don’t know.”

Under terms of the state’s Environmental Policy Act, developers must work with the county containing their project to determine its impact on the surrounding communities. It is through the SEPA process that Bonney Lake and Cascadia reached their $950,000 deal.

With the current Chapter 11 protection, Cascadia reorganizes its company under supervision by the courts, and interested creditors will vote on a plan for the company to pay off its debts, giving it a chance to emerge and reassume business as usual. But Chapter 11 can often lead to Chapter 7, requiring the organization to liquidate assets to pay off debt.

“Cascadia was supposed to be an all-encompassing community,” Bonney Lake Mayor Neil Johnson said. “If they can’t follow through and re-emerge from their debt, several mini-developers could pick up the project and change the entire development from what we planned for.”

In such an event, the new developers would have to submit their plans to the SEPA process all over again. If those involved a greater residence-to-business ratio than Cascadia’s plan, than that could mean more traffic impact and more mitigation money for Bonney Lake, Johnson, said.

But for now it is too early to tell. John Ladenburg, Cascadia’s chief operating officer and the former Pierce County executive, said in early interviews that the company wasn’t really in bankruptcy because the value of assets exceeded debt.

But for now, the city has to wait, watch and project what future developments mean for traffic.

“Because we’re talking about a large area of rural land with no infrastructure, if (the Cascadia project) were to come up today instead of 18 years ago, I don’t think the county would have approved it,” Morrison said. “If things change and several developers take over the land, well, that’s our fear.”