Question
Dear Marc,
 We are in the planning stages of building a house on a 4.5 acre lot we bought a few years ago. The house as designed is a 70 x 28 ft rectangle with the long side facing north/south for passive solar and day lighting. We are designing a lower level/walkout basement to the south. Because of elevation/drainage issues, the engineers with whom we are working have recommended that the basement open to a dug out area that will lead to a 2.5 ft sitting/retaining wall with additional land sloping up from the wall (with a French drain to address water additional issues).  The dug out area needs to at least be the length of the house, but they have asked us what we抎 like for the width i.e. how far back should this 搒unken?backyard be before the sitting wall?  They抳e suggested we should err on the side of too big rather than too small because it will be harder to increase the size later than to decrease it.  We抎 like to ensure that there is room for a small swimming pool which we will put in later, as well as a play area for our child and an outdoor eating/sitting area.  Based upon that, we were thinking this lower backyard area should by roughly 70 x 30 ft i.e. we would extend it back 30 ft from the house before hitting the back retaining wall (which would be on the sides too).  
Do you think this is a reasonable size for what we are trying to accomplish? Are there factors we should be considering that we have missed?  The land in the back beyond the retaining wall will provide additional space for other purposes. In addition to addressing drainage issues, the hope for the lower backyard area was that it would more clearly delineate the house/backyard from what is essentially a large field. Thanks for any advice.

Answer
You are essentially doubling the house foot-print, which seems rather large, IF this area was only going to be hardscaped with concrete or pavers alone -- Which I would strongly suggest you  avoid.  If you use concrete or pavers, you'd create a large, impervious surface that would have to be drained away somehow.  

My suggestion would be to mix hard & soft elements (Place a lawn or planter where the future pool may go, perhaps?).  A south-facing, paved area has the potential to generate a lot of heat in the summer from solar gain, if not shaded with deciduous trees, umbrellas, or retractable awnings of some sort.  Passive solar is great, but not so much that it drives you from enjoying your back yard! Deciduous trees & plant material can moderate this influence while still allowing for the benefits of solar orientation.

You've done an exceedingly smart thing by hiring an engineer to help with the anticipated drainage, and avoid future problems!  The "French" drain is a good thing; A curtain or channel drain may also work.  A classic gravel "French" drain has a tendency to eventually silt up in a few short years (15 to 20), depending on climate and how well it is constructed.  

I抦 confident your engineer is aware of these products ?here is a good site that discusses other drainage options:
http://www.capbrick.com/drain_data.htm

Prefabricated 揷urtain?drainage examples:
http://www.drainaway.com/panel/
http://www.eljen.com/Pages/PDS/Howorks.html
http://www.carlisle-ccw.com/findsolution/Brand.aspx?brand=23

Examples of channel  or slot drainage - a little easier to maintain & keep silt-free:
http://acousa.com/drain/index.htm
http://www.abtdrains.com/

Allowing for a future, modest-size pool is going to be about 14 to 16 feet wide, plus 6 to 8 feet of pool decking on both sides, so you'll need an overall width of 26 to 32 feet wide...Sounds like you are leaving plenty of room for this.

I personally think a straight retaining wall of 70+ feet, though easy for the engineer to design & contractor to install, and maybe save you a few construction dollars in the short-term, may however, make for a very dominating element.   You will have to look at from your walk-out basement for the life of your home.  I would vary the wall length or use a curved wall, made of stone or segmented wall units.  

Here are some great pictures of what I mean:
http://www.woodyscustomlandscaping.com/images/gall7.jpg
http://execlandscaping.com/Portals/0/wall.jpg
http://content.breederoo.com/users/dwayne/images/content/1953.jpg
http://palmettopaverstones.com/images/arakilian_wall.jpg
http://www.allanblock.com/photoalbums/Walls/Residential/Index.aspx?ta=1&product=...

Congratulations, and all the best in your endeavors.  ~Marc