The Philomath City Council moved forward a request by Millpond Crossing developer Levi Miller Tuesday night during a special meeting at City Hall that could later pay the home builder up to $185,000 through a system development charge credit purchase.
Heading into the meeting, councilors believed they were going to consider the approval of a $70,000 lump-sum payment from the city through SDC funds. City Manager Chris Workman started the discussion by providing clarification on how the money would be paid out and the timing of the transaction — conclusions that came out of meeting with the city attorney.
Millpond Crossing developer sits at table with Philomath City Council
Developer Levi Miller told the Philomath City Council Monday night that he’s ready to get started on a punch list to close out the second phase of Millpond Crossing, a housing development in a southern section of town that has seen multiple delays and challenges since it was first approved seven years ago. Miller was…
“We’re looking to buy back some of those credits that Millpond Crossing owns currently … so that it lowers the balance down,” Workman said. “The lower the balance, the quicker he’ll exhaust that credit and return to just paying SDCs for storm with each building permit that comes out.”
A resolution that was later approved does not result in an immediate payout but as mentioned, puts the funding issue on a list of supplemental budget items that will be reviewed at a June 9 City Council meeting. The public will have an opportunity to testify on the supplemental budget that evening during a public hearing. If approved, Miller might be able to access the funds as soon as June 10.
Millpond Crossing had received the credits for completing a storm line installation on South 15th Street through an agreement with the city — a project that was beyond what was required of the developer. The total project cost was $257,644.
The credits were to be applied against future stormwater SDCs and by the end of 2024, the balance was down to $210,488. By purchasing Millpond’s credits, Workman said the city would not face any adverse impacts to future stormwater projects.
SDCs are one-time charges to developers or individuals who are doing construction projects that change the use of a property. The city uses the funds to build or reimburse necessary capital improvement projects.
“There’s no real loss or benefit to the city either way because it’s not like the credit’s going to lose its value,” Workman said. “The credit is based on what the dollar value of the SDCs are at the time.”
Miller disagreed with Workman’s neutral position on buying back the stormwater SDC credits.
“I think there’s tremendous benefit to the city for buying these credits back,” Miller said. “First and foremost, the project moves along quicker. I don’t think there’s a person in this room or this town who does not want to see Millpond Crossing get done.”
Miller also said it helps move up the start time on Phase 3.
“It helps me move the mission forward, which is affordable housing,” he said. “The townhomes are desperately needed from what I’ve been told because that’s middle-income workforce housing which the town does not have.”
Councilors had arranged for the special meeting on May 20 to be able to provide Miller with a decision on the request for funds as he attempts to finish out needed work on the current phase of his housing project, which is located in an area north of Chapel Drive and east of South 15th Street.
Discussion on the scope and timing of punch-list projects went on for some time between Miller, Workman and the councilors. Those projects include the construction of a detention basin flow control system to prevent flooding and erosion, filling the ditch on Willow Lane and putting in storm pipes across Chapel Drive among others.
Miller said he started the task of filling the ditch along Willow Lane, which backs up to properties on the north side of Timothy Street, on Tuesday but the city’s Public Works Department halted the work.
“Public Works doesn’t have that as a top priority and actually has some concerns about filling that ditch before all of the storm lines and everything else goes in,” Workman said. “As much as Levi wants to fill in the ditch and the council would love to fill in the ditch and I’d love to fill in the ditch for those neighbors, Public Works wants the whole project done at the same time. So the ditch has kind of dropped down in priority a little bit.”
As a result, a top priority for the city is the installation of the storm bypass across Chapel. However, that can only move forward if approval comes in from Benton County, which owns the road.
Another punch-list item that Public Works wants to see the developer complete is a grind-and-overlay project on South 16th Street, something Miller had planned to do later as part of Phase 3 work because it comes with a price tag of about $90,000.
In addition, Miller went through various financial numbers to illustrate what he sees as Millpond Crossing’s positive impact on the city’s capital improvement projects. Citing those factors, primarily the high cost of the road, he increased his request from $70,000 to $185,000.
“If you guys can buy the credits back from me, that would supercharge my reserves and I could definitely get this done ASAP — get this project back in a fast-track process,” Miller said.
At a May 12 meeting, the council approved a park SDC refund of $39,802 — money that the developer had overpaid on homes built between 2021 and 2024 after a new SDC methodology had been implemented.
Mayor Christopher McMorran believes that unlike the park SDC refund, the stormwater SDC credit purchase doesn’t change the bottom line while helping the project move forward.
“I think this is a unique opportunity where we can as a City Council stay true to our word of wanting to just get this damn project finished without actually hurting our tax base or spending taxpayer money,” McMorran said.
Councilor Diane Crocker introduced an idea of approving a lesser amount and once those projects are finished, then moving forward with another SDC credit purchase — a sort of motivational tool for the developer to follow through and get things done.
Workman said that could be a possibility but he would rather go with making more funds available at once to provide Miller with flexibility to pivot to a different project, if needed, in cases of delays in certain areas. His suggestion was to see where things stand when the City Council meets again on June 9.
The resolution passed on a 5-1 vote (Brent Kaseman nay, Teresa Nielson absent).
