Millpond Crossing’s developer is making incremental progress on the housing development’s outstanding work but still has not closed out Phase 2, leaving the timeline for Phase 3 construction uncertain, City Manager Chris Workman said this week.
Workman provided an update on Philomath’s largest housing development, a project that has been hampered by a series of delays, regulatory issues and design changes since its original approval eight years ago. He outlined three major items that must be wrapped up before developer Levi Miller can move into the next phase of construction, along with a separate land-use action that has cleared the way possibly for additional financing.
Millpond Crossing sits in the southern section of Philomath, north of Chapel Drive and east of South 15th Street, on property where Miller has been working through a multi-phase build-out that the city first approved in May 2018. Following a major redesign approved in February 2022 — which added townhomes, relocated the planned neighborhood park and was pitched as a way to keep prices closer to attainable — the development at the time was set up to deliver up to 110 lots beyond what had already been built. The project has since been reorganized from five phases to four, with Phase 1 completed and Phase 2 still being closed out.
The development has been beset by setbacks since its early days, including delays related to COVID-19, rising construction costs, the discovery of methane on site that required mitigation work in existing homes, and a series of stormwater and infrastructure issues. The Oregon Department of Environmental Quality has been involved in the methane response.
The remaining Phase 2 work falls into three buckets — repaving 16th Street, installing storm water laterals at certain homes on the east side of that street, and completing lot line adjustments on the west side.
The storm lateral issue affects roughly half a dozen properties where gutters and downspouts were installed but the connecting pipes that were supposed to carry runoff to the storm main at the back of the properties were never put in, Workman said. As a result, water comes off the roofs and pools, eventually moving through groundwater toward the storm main.
Workman said the city has required Miller to either install the laterals as originally designed or to negotiate releases with the affected property owners.
“We’ve required that he go to those property owners and offer to install those or get the property owner to release Millpond from the responsibility, which would mean they compensate them in some way,” Workman said. “The city is going to check back this summer and make sure it got done.”
Miller’s team drafted a template letter last week that, if signed and returned by property owners, would relieve Millpond of the obligation to install the laterals. Workman said he reviewed and approved the letter, which will be sent to the affected property owners.
The lot line adjustments on the west side of 16th Street also remain in progress with the city planner working through title documents on a couple of properties that have slowed the process. Millpond is responsible for the costs associated with those adjustments, including new legal descriptions, appraisals, recording fees and reimbursement to property owners losing land area.
Workman said the city has agreed that if Millpond provides a deposit toward the work — $30,000 was thrown out as an estimate — it would satisfy the requirement to begin Phase 3 even if a few lot line adjustments remain unfinished.
“We’d let them proceed into Phase 3, knowing that there were still a few lot lines that needed to be done, but we’d have money in hand to take care of that and help those property owners out,” he said.
A handful of smaller public works items — caps, valves and other fixes along the water and sewer lines — also remain on the punch list.
Storm main project
Beyond the punch list, the most visible ongoing work at the site involves a long-planned storm main project intended to address drainage from the north end of town. A low spot between the city’s public works yard and school district property has pooled water for years, with runoff historically flowing west down Willow Lane, then down 15th Street and across Chapel Drive to the Marys River.
When 15th Street was rebuilt, storm pipe was included but was not large enough to handle the volume. The original Millpond plans called for two additional storm pipes to be installed under 16th Street to carry water through the property, across Chapel Drive and down to the river. Those pipes were never put in the ground.
Instead, the pipes will now run just east of 16th Street — between 16th and 17th — behind the houses there. An open ditch currently in that location was dug as a temporary measure but will be replaced with the buried pipes with an access road on top so public works crews can maintain them.
“It’ll get all that water out of there and get it across their property and down to Marys River,” Workman said.
Miller’s crews appear to be doing preparation work for that installation, Workman said, although he could not confirm exactly what is happening on site day-to-day. Some of the activity may also relate to ongoing cleanup of filtered soil from earlier site remediation with material being hauled away.
“None of which requires any permits from the city, and none of it’s in violation,” Workman said. “He doesn’t have any stop work orders. He owns the property, and he can clean it up and get rid of bad soil or bad material.”
The work in the Chapel Drive right-of-way requires Benton County approvals that Millpond does not yet have, including an erosion sediment control permit and a work-in-the-right-of-way permit.
Because Chapel Drive is a designated freight route, the county will also require advance notice to haulers and transportation agencies before any road closure with signage posted in advance. The duration of any closure for construction is not yet known.
Separate from the on-site work, Miller received approval on the land-use side to partition 18.82 acres (Tract F) — which covers Phases 3 and 4 — into three separate tax lots. According to Workman, the partition was requested for financial reasons, presumably to allow multiple lenders to take a stake in different portions of the remaining development.
“There was no real benefit or intent to change the approved development plan,” Workman said. “It was just a partition for kind of legal, financial reasons.”
The partition still requires submission of a revised plat that must be approved and recorded with the county before it is finalized. Workman estimated the partition is “80% approved.”
The development plan for Phases 3 and 4 has not changed. Miller has submitted plans for Phase 3, and the city has begun review, but no Phase 3 or Phase 4 approvals have been issued.
Phase 3 outlook, rebranding
When the two talked recently, Workman said Miller’s stated goal was to begin building Phase 3 infrastructure this summer with the possibility of pouring foundations and starting some homes by fall or winter.
“There’s a lot to do between now and then, and some of it’s the same stuff that needs to be done a year ago and hasn’t been done,” Workman said.
Phase 3 is planned to include single-family homes along a new South 17th Street along with townhomes. Workman said Millpond is working with new real estate agents and is rebranding the upcoming phases as Millpond Commons to better fit the townhome community.
The city is currently working through a code audit that could update Philomath’s development code, including provisions that would allow townhouses on smaller lots. If the new code is adopted, Workman said, Miller could submit a revised plan — most likely for Phase 4, the area north of the planned park and South 17th Street — to add townhomes in place of some single-family lots.
“We need housing, and it’s so expensive anymore that I kind of get the argument for townhouses,” Workman said. “If you can build them cheaper and sell them for cheaper, and first-time home buyers have something to buy and build some equity on, it’s hard to say no to that in favor of 5,000- or 6,000-square-foot lots with 2,500-square-foot houses on them that nobody can afford at $400,000 to $500,000.”
A neighborhood park, a long-running point of discussion for residents in the existing phases, remains tied to the next phase of construction.
“It has to be constructed and approved by the city prior to issuing any occupancy for Phase 3,” Workman said.
When the subdivision was originally approved, the park had been slated to be built as part of Phase 5 (the development has since been redesigned to four phases). Workman said he pushed for it to be moved up.
“The way that that got written up was it’s part of Phase 3, but it has to be built before homes are occupied in Phase 3, so that the homeowners that have bought in Phase 1 and Phase 2 aren’t waiting for all of Phase 3 to get built before they finally get their park,” he said. “There’s a ton of kids and young families on 15th and 16th streets — you see them out in the street playing all the time. It’d be so nice for them to just be able to walk over to the park.”
