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 in the room to provide background information and answer questions on the housing project as part of an effort to receive a $39,802 refund from the city — money that MPC Builders had overpaid in park system development charges on homes constructed between 2021 and 2024.
City Manager Chris Workman explained that the park SDC refund is basically a “fairness issue for a development that got caught between two very different park SDC methodologies.” Workman blamed neither the city nor the developer for the oversight and believed it was something that should have been caught by the project’s consultant.
“Legally, the city did provide notification of the new methodology and an opportunity to provide comment prior to adoption, so it may be justified in requiring both the developer-provided park and amenities and collecting the full, new SDC fee,” Workman said in an agenda item summary. “However, staff believes reimbursing the overcharged SDC fee seems like a better path forward and the right thing to do.”
Located north of Chapel Drive and east of South 15th Street, the project at a former mill site has seen countless construction delays — most notably elevated methane concentrations in the soil that led to Oregon Department of Environmental Quality intervention and comprehensive mitigation plans. A few years later, the project was halted again with new home sites being constructed on an elevation grade that was lower than what the city had approved, a situation that could have possibly created a floodplain.
Many other issues have plagued the subdivision, including properties that back up to Willow Lane with residents who have lived in their homes the past three years with no backyards because of an open ditch that needs to be filled in. There are also a slew of homeowners that have been dealing with property lines that were incorrectly staked that has forced them to maneuver through a frustrating process to reach resolution.
That’s just scratching the surface with many residents who can share stories of frustrations related to the development — Mayor Christopher McMorran and City Councilor Jessica Andrade both mentioned at the meeting that they’ve heard about many challenges that have been endured.
“When I say it’s been a nightmare, it’s been a nightmare on all levels,” Miller said at one point during the meeting.
Miller spoke to councilors for several minutes with his perspectives on the history of the project, where things currently stand and where construction is headed in the future. He referred several times to his mission of providing affordable housing to Philomath and said he maintained that commitment despite rising costs.
At one point during the discussion, Miller said if he had put those early-phase homes up for sale at market value, he could’ve raised an additional $4 million.
“If I would have had the funds from the very beginning to have handled the challenges I had, I think I’d probably be done with Millpond Crossing right now … but I didn’t have the $4 million and the last three years have quite frankly been a nightmare,” Miller said. “We’ve had to slow roll the project. I’ve had to refinance the project to get additional revenue to keep things moving forward and I had to get a $1.5 million loan from Business Oregon.”
Miller made several references to the financial challenges and reiterated his commitment to the stated mission of keeping home prices affordable.
“The last thing I wanted to do was come to town, say I was going to build the subdivision, provide housing that people could afford and all of a sudden, I raise my pricing up and people are like ‘oh, you know, Levi lied to us — the whole classic developer bait-and-switch.’”
To try to back up his point, Miller shared positive testimonials from residents. He also mentioned that currently, there are eight homes for sale with a loan program that offers a 4.5% fixed-rate loan.
“We are moving forward with Phase 2B … for the most part we are done,” Miller said. “We have a few interiors to finish up on the last couple houses and we should be done with those last two houses in the next two weeks. So we are ready to roll into Phase 3.”
Millpond Crossing’s third phase is mostly townhomes with a few single-family homes mixed in.
“There are a few punch-list items that are leftover from Phase 2 that I need to take care of,” Miller said.
Those punch-list items include construction of a detention basin flow control system to prevent flooding and erosion, filling the ditch on Willow Lane, putting in storm pipes across Chapel Drive and various other things. He estimated that the punch-list work could be done in two to three weeks once the money is approved.
“Obviously, as homes sell, we’ll have money to pay for that but now that it’s May, the weather’s good — if I can get that money that we overpaid on SDCs, I can get these punch-list items taken care of and we can roll right into Phase 3 without delay,” Miller said. “We can get Phase 3 done this summer and fall, get the (planned neighborhood) park built and more importantly, we can continue to bring affordable housing and keep the mission going with Millpond Crossing.”
Councilors had a number of questions, including those that challenged Miller’s commitment to fixing issues. For example, Andrade wanted to know if he plans to respond to homeowner needs beyond what appears on the city’s punch list.
“I’m concerned that the homeowners that have been essentially screwed over by you for whatever reason aren’t getting their issues taken care of — and we’re here to serve our community members,” Andrade said. “So I just want to make sure that their needs are met.”
Miller responded by saying that he was “prepared for this question” and had “gone through our warranty email and I don’t know which homes you’re talking about.” He then asked Andrade for a specific homeowner that he could contact.
“I’m just thinking about all of the conversations that I’ve had over the years — no one specific,” Andrade said.
“There’s a lot of people who have hated Millpond Crossing from Day 1,” Miller said in a follow-up. “I had people who tried to derail the project from the very beginning … There’s been an agenda to stop this project; there’s been an agenda to destroy this project; there’s been an agenda to put me out of business; there’s been a lot of stuff said about me and the project that frankly aren’t true.”
Miller referred again to the warranty emails and said an effort had been made to go through all of those communications to see if something had not been completed.
“No one has let us know that they have a problem so if someone has a problem, they need to email me and say ‘hey, we have this issue that hasn’t been resolved,’” Miller added.
As for the ditch along Willow Lane, Miller mentioned an additional feature that could become part of the project if the homeowners approve. According to the developer, an agreement had been reached a couple of years ago with those residents to build a retaining wall if they would be willing to split the cost. More recently, he said they were contacted several days ago to see if they wanted to move forward.
“We’re waiting for homeowners to respond back if they want to participate,” Miller said.
Andrade asked Miller why he wasn’t paying for the entire cost of the retaining wall.
“The wall was never part of any agreement to build,” he said. “Our plan was just to fill the ditch in and grade it. But once the homes got built and we looked at it … it was, ‘you know, if we put this wall in, the homeowners could get some more yardage.’ It was something that was actually a request of one of the homeowners after the fact and we basically said, ‘that’s a great idea — let’s see if we can’t help people out.’”
McMorran offered his perspective on the project as a whole.
“I know it has been kind of a mess for so many people but I also can attest to the fact that I’ve talked to people who live there … they share their concerns and their frustrations and they also share the fact that they would not have been able to buy a house if it weren’t for that development,” McMorran said. “So both of those things are true at the same time.”
McMorran then threw out a carefully-worded question to Miller about whether he would actually use the refunded park SDC money on the punch-list items amid unexpected delays and costs.
“How do we know for sure if this money gets to you that that punch list gets done?” McMorran asked, later adding, “I think you can acknowledge there have been a lot of delays and a lot of things where we’ve been told something that will happen by a certain date and then it happens a year later.”
Miller responded by saying homeowner updates stopped because under the circumstances, he wasn’t able to follow through and “got tired of basically being a liar.” He followed with comments that the money he receives has to be used on those punch-list items because if they are not, the project will not move forward to Phase 3 and he will be unable to generate much-needed revenue.
“There’s really no guarantee I can give you other than it doesn’t benefit me not to do it,” he said. “There’s zero benefit not to jump on this punch list.”
Further pushing the issue, McMorran wanted to know his plan if the costs of the punch-list items go significantly above the $39,000-plus he will receive from the park SDC refund. That’s when the council found out about Miller’s hopes to receive a $73,000 lump-sum payment from the city through stormwater SDC funds.
“There’s two parts to this puzzle — there’s the park and also some storm,” Miller said. “If I got both of those funds, I’d be good to go.”
Miller said he would have the funding to take care of the punch-list items on his own without the refunds but that process would take six weeks to two months and he wants to avoid more delays and take advantage of the summer construction season.
Workman jumped in to explain the $73,000 involves MPC Builders receiving developer credits against its required stormwater SDCs, an arrangement that was implemented with Miller’s willingness to build a storm line that the city needed to carry water down 15th Street to Chapel Drive. So instead of continuing to receive the developer credits, Miller would receive payment.
“It doesn’t make sense for the city to hire its own contractor to go out and work on the same road that the developers are working,” Workman said.
Such arrangements are common in situations when a developer can build or improve infrastructure that benefits the public.
Workman said he had not planned to introduce the stormwater SDC issue at Monday’s meeting because it involves a different situation than the park SDC refund. He mentioned that Miller had brought it up with him only prior to the meeting.
“I don’t have the numbers on me or anything like that … I would feel more comfortable writing it up and bringing it back,” he said.
Councilors agreed that they would like to see a written report on the request to better understand its complexities. In addition, McMorran added that it’s a significant issue that was not on the publicly-noticed meeting agenda.
To avoid delays, the council decided to meet again at 6 p.m. May 20 to take on the stormwater SDC payment issue.
Following approval of an amendment to the resolution on the table to clean up language, the council approved the city’s $39,802 refund in park SDC funds on a 4-2 vote (Andrade, McMorran nay).
