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Project delayed, but code may change

Council asks staff to revisit rules that force developer to pay high fees for sidewalk improvements

The proposed development at Main and Monroe streets in downtown Milwaukie will continue to be delayed after City Council last week voted to uphold the code provision requiring public area improvements for the site.

Most of the councilors expressed dismay at having to make the decision to deny developer Ed Parecki's appeal because they see the project as beneficial to the city. Following the hearing, councilor Greg Chaimov made a motion, which passed unanimously, advising city staff to come up with a system that strikes a better balance between private and public investment 'as soon as practicable.'

At question in the hearing was whether Planning Director Katie Mangle had correctly interpreted the code, not whether or not the code was in the best interests of the city.

'I'm serving essentially as a judge and not as a policy maker,' said Chaimov as he voted to support the planning director's interpretation.

'Until we change the code, we have to follow it,' he said. 'We ought to have a code that says 'we're open for business,' we ought to have a code that welcomes people like Mr. Parecki and it makes me very frustrated that we don't.'

The hearing was an appeal of the planning board's decision in November to uphold Mangle's interpretation.

The argument in the case was whether Parecki and Main/Monroe Investors, LLC, should be responsible for building public area improvements around the building he plans to redevelop. These improvements include things like sidewalk bulb-outs, lights, trees and benches.

Infrastructure impact was key

Both sides made various arguments throughout the process, but one of Parecki's main concerns was with how the city determines a development's impact on local infrastructure. The city does this by determining the use of the site. Parecki argued that because the site had always been retail and would stay retail, there were no impacts, and therefore there could be no public-area requirements.

But Mangle said it was more complicated than that. She said the cost of the development determined whether public area improvements should be done, and a proportionality analysis would then determine how many of the improvements would be required.

Parecki's was the first instance of the particular code section. All downtown developments since 2000 have cost less than 50 percent of the assessed value of the property or have been new developments, like North Main Village. Parecki's fell in between the two, costing more than 50 percent but being a renovation.

Those below 50 percent are required to provide 10 percent of their building costs toward public improvements. But the code says projects over that mark 'shall comply' with public area improvements.

Mangle determined that 'shall comply' meant the developer should be responsible for all improvements.

The planning department then did a proportionality analysis to determine how many of the total number of projects the developer could be asked to complete. The law mandates that required improvements be proportional to actual impacts.

The department determined Parecki could be asked to do 96 percent of the improvements, but later significantly reduced the number they asked for. Completing all the improvements would have cost about $128,000, according to Mangle, and the revised list came out to an estimated $60,000.

But that's still more than a quarter of the total project cost of about $225,000, and while councilors agreed that Mangle had correctly interpreted the code, they expressed dismay at the code's implications.

'I always believed before that Milwaukie would develop, it would just take time,' Councilor Joe Loomis said, adding that because of the current code, Milwaukie may not be an enticing place for developers.

Parecki said he now has two options: he can either leave the property be until the city changes its codes, which he says will cost him, or he can sign the agreement saying he'll complete the improvements, but insert a clause saying he's doing it under duress and then sue the city later for costs.

'I'd rather see a compromise, personally, but at this point we're so deep into it that suing them' wouldn't be out of the question, Parecki said.