By the 1990s, the sewage treatment facility in Giant Forest, known as the "Imhoff" plant (dating from the 1930s), no longer met federal and state standards for wastewater treatment. The level of treatment was substandard - "partial primary" only, with solids skimmed off and the remaining effluent heavily chlorinated and sprayed over a steep slope below the Giant Forest. The Imhoff plant had been operating on a temporary, ten-year discharge permit since 1978, and was issued a five-year extension until 1993. In 1993, the California Regional Water Quality Control Board denied renewal of the discharge permit, which would force closure of the treatment plant. The Park was required to submit a plan to comply with wastewater treatment standards by either rebuilding the plant, or providing a firm schedule for closure, with reduction of wastewater flow from the plant each year until closure.

Because the National Park Service had committed in 1980 to removing lodging and associated infrastructure from Giant Forest, the decision was made not to rebuild the sewage treatment plant in or immediately adjacent to Giant Forest. Construction of replacement infrastructure at Wuksachi Village had been underway since 1983, but a firm schedule for closure and removal of facilities was not in place until this denial of a discharge permit by the State of California forced the issue.

Many of the nearly 300 lodging and commercial buildings in Giant Forest, built between 1920 and 1950, were poorly built and aging rapidly. Maintaining and servicing these old and widely dispersed facilities was difficult and costly. Deteriorated sewer lines had reached their limit for repair. Because replacement would harm the giant sequoias the National Park Service is mandated to protect, removal of the facilities remained the only option.