Developers seek parks‑SDC rate lock in annexation amendment; council declines immediate action

Developers seeking to annex tax lot R4409CD00100 asked the McMinnville City Council to amend their annexation agreement to ‘lock in’ the current parks system‑development charge (SDC) methodology for building permits submitted within five years of the agreement’s effective date. Staff told the council the applicant’s calculation showed a parks SDC increase from roughly $231,600 to about $770,154 under the proposed new methodology — a difference of roughly $538,554 for a planned 75‑unit apartment project.

Community Development Director Heather Richards described the request as an attempt to provide financing certainty after the council’s February 10 work session introduced draft revisions to the parks SDC methodology. The amendment would have frozen the applicable parks SDC for that property at the pre‑change methodology (subject to annual inflation indexing) for building permits submitted within five years of the annexation agreement.

Developers and their representatives said the unexpected increase would materially affect the project pro forma, potentially raising rents or jeopardizing project feasibility. Developer representatives suggested that the city’s planned methodology changes were not transparent to project financing when the annexation agreement was signed and requested the rate lock so the project could proceed with predictable costs.

Opponents and several councilors raised procedural and policy concerns. Council members asked whether granting a lock for a single project would set an undesirable precedent, inviting similar requests and complicating fair administration of SDCs. Staff and legal counsel confirmed that existing annexation agreements are a distinguishing fact but warned that repeated ad hoc exceptions could be difficult to manage and could be cited by subsequent applicants.

Councilors also noted that the city had not yet adopted a new parks SDC methodology and that routine practice often includes transition periods when fees change. Several councilors said it was premature to amend the agreement before the city adopted any new SDC schedule. After discussion, councilors did not move to approve the amendment; staff said the matter could be returned for future consideration once the SDC methodology is finalized.

Key facts: The applicant’s submitted analysis showed a roughly 232% increase in parks SDC liability if the draft methodology is adopted; the annexation agreement had been signed in late 2025. Staff noted the city’s authorization to negotiate annexation agreements but cautioned about managing precedent and enforcement.

What’s next: The council left the amendment request unapproved and signaled that applicants during annexation can request rate protections, but councilors indicated they prefer to decide SDC policy comprehensively rather than through one‑off contractual amendments.

Sources: Staff presentation by Heather Richards; public comments from developer representatives and residents; annexation agreement materials in the council packet.