Troutdale council hears appeal from developer over $400,000 system development charge; staff defends calculation, council schedules executive session

Troutdale staff told council that city code and adopted methodology support the system development charge assessment of $399,839.08 for the Yellow Development Group’s redevelopment at 1323 Southwest Cherry Park Road and recommended denial of the developer’s appeal.

Public Works Director Travis Holton explained the SDC methodology the city used: calculate the SDC for the proposed 80-market-rate units, then deduct credit for previously purchased system capacity paid by the site’s prior use. Holton said the prior use paid for capacity as a congregate-care facility and the city applied the current value of that previously purchased capacity when computing the credit. “When we apply that credit, we are applying credit for those units at current rates,” Holton said, adding that the code directs staff to apply credit for “the value of the system capacity previously purchased.”

City Attorney Ed Trumke and staff described the statutory and constitutional framework for SDCs, including nexus and rough proportionality principles, the city’s FCS impact study that underlies Troutdale’s SDC rate tables, and case law the city considered. Trumke explained that Oregon law permits both reimbursement and improvement components for SDCs and that credits are applied to reflect prior purchases; he said staff’s analysis complies with those requirements and recommended denying the appeal.

The development team — represented by Grant Taylor and attorney John Taylor — argued the charges violate the constitutional “rough proportionality” standard because the conversion primarily changes the age of occupants rather than physical fixtures. Grant Taylor said the property originally contained 81 dwelling units configured with kitchens and baths and said the redevelopment restores that configuration; he argued the city’s historical assessment treating the prior use as lower-impact senior housing should not now be re-priced to require the developer to pay what he characterized as an amount that should have been charged previously.

Developers asked the council to find that the city had not made an individualized determination of impact under the Dolan/Sheetz framework and that staff’s use of prior categorizations (e.g., hotel/motel or congregate care) produced an improperly large reassessment. Staff disputed that characterization and pointed to individual categories in the rate tables and to the city’s practice of individualized review using ITE trip-generation values, meter size, and ERUs for sanitary sewer.

The council did not render a final decision. City and appellant counsel agreed litigation was likely if the council upheld staff. The city attorney advised that the council might want to meet in executive session with legal counsel to discuss exposure and options. The council agreed to schedule an executive session after the Urban Renewal Agency meeting on June 17 to receive legal advice; the record will remain the public hearing record and any decision will be made in public session at a later hearing with written findings.

Why this matters: The SDC assessment is large relative to a single development and affects whether the project proceeds at the current economics. It raises constitutional-exactions questions — individualized determination and rough proportionality — that courts have recently revisited. The council’s handling could determine whether litigation follows and whether staff SDC methodology requires adjustment.

What’s next: The council will receive legal advice in an executive session scheduled after the council’s June 17 URA meeting; findings and a public vote on the appeal will follow, and either side indicated litigation is a likely outcome if the appeal is denied.