A lawsuit that challenged Group Health's plan to clear more than 1,000 trees from its woodsy Redmond campus has been settled, removing an obstacle to redevelopment of the Overlake Village area.

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A lawsuit that challenged Group Health’s plan to clear more than 1,000 trees from its woodsy Redmond campus has been settled, removing an obstacle to redevelopment of the Overlake Village area.

Citizens and Neighbors for a Sustainable Redmond agreed to drop its suit in exchange for tree planting elsewhere in the neighborhood and a voice in whether trees are part of a new park on the property.

The environmental group had sought to preserve a portion of the urban forest around Group Health’s former Eastside hospital.

The agreement, signed by Sustainable Redmond, the city of Redmond and Group Health, doesn’t guarantee that any of the trees of up to 53 inches in diameter — some of which may be more than 200 years old — will be saved.

But Group Health agreed to create a $20,000 fund to be used by the city to either transplant trees from the hospital property or plant new trees in the area.

The agreement also states that citizens will be given an opportunity to advocate for tree retention or planting in a 3-acre park to be developed on the 28-acre property adjacent to the Microsoft campus and a future Sound Transit light-rail station.

The Washington State Bar Association’s Land Use/Environmental Mediation Committee helped the parties reach the settlement, which was approved by the City Council May 22 and announced Friday by the city and Sustainable Redmond.

“What we were after was a better outcome for the Overlake Village neighborhood than what they were going to experience with the existing plans. I think we achieved that,” said Bob Berg, Sustainable Redmond spokesman, on Monday.

Berg said his organization supports high-density development around the Overlake Village light-rail station but wanted to “preserve some of the natural environment.”

“From our perspective,” said Bill Biggs, Group Health vice president for administrative services, “it means that the development agreement and master plan that were approved by the City Council in December can now move ahead and won’t be encumbered by a legal dispute.”

Biggs said Group Health will first look for a single buyer to develop the property, but could eventually market the property to multiple buyers.

Mayor John Marchione said the settlement “doesn’t change the fundamental principles the council approved earlier this year,” and characterized the settlement as an agreement primarily between Sustainable Redmond and Group Health.

The Group Health property has the highest-density zoning in Overlake Village, the only area of the city other than downtown designated as an urban center.

Plans approved for the property will allow development of 1.2 million square feet of office space, 1,400 apartments or condos, and a hotel in buildings of up to 12 stories. Overlake Village is southeast of the interchange of Highway 520 and 148th Avenue Northeast.

The lawsuit had challenged the city’s finding that Group Health qualified for an exemption to the city tree-preservation ordinance, allowing the property owner to cut down all the Douglas firs.

Three other plaintiffs, Friends of Overlake Village, Villa Marina Condominium Association and former Mayor Rosemarie Ives, withdrew from the case after the agreement was reached.

Ives, who was traveling when the settlement was negotiated, said she remains unhappy about the City Council’s decision to authorize cutting all the trees.

“I still believe that the approval of this project was inconsistent with adopted policies, so I don’t want to be a party to it,” she said.

Keith Ervin: 206-464-2105 or kervin@seattletimes.com