Urban renewal advisory committee recommends Palindrome Properties as preferred developer for Northwest Rubber site; Leland analysis says proposal likely to net—

The McMinnville Urban Renewal Advisory Committee recommended Palindrome Properties Group, LLC as the preferred developer to redevelop the vacant Northwest Rubber site, and advised the McMinnville Urban Renewal Agency to authorize a memorandum of understanding that would let the city begin negotiations with that team, Community Development Director Heather Richards said at an Urban Renewal work session April 23.

The site — a roughly 3.5‑acre parcel in the Northeast Gateway area the city purchased on Oct. 23, 2023 — was bought for about $4.25 million plus closing costs with a loan from the city’s wastewater fund, Richards told councilors. The urban renewal agency is currently making interest‑only payments; a balloon payment is due in five years, she said. “This is a work session, so, really, it’s to get you the information you need to make informed decisions,” Richards told the council and urban renewal board before introducing the selection recommendation.

Why it matters: the project would be funded with urban renewal (tax increment) dollars, which the city says cannot be used for general‑fund purposes. The council and the Urban Renewal Board will decide whether to authorize an MOU (listed on the agenda as Resolution 2025‑03) that would allow staff to begin negotiating a development agreement; any final development agreement would return to the board for public approval.

What Palindrome proposed and why it scored well

Palindrome’s concept presented to the city includes a two‑phase program: a housing first phase and a later commercial/hospitality phase. In materials submitted to the city and discussed at the meeting, Palindrome described a first phase of housing—presented to the selection committee as “88 units” with a mix of market‑rate and affordable units—and a second phase that would include a 51‑room hotel and about 11,000 square feet of a market‑style hall with small ‘‘micro‑retail’’ vendor spaces. The proposal also references design features that reuse industrial elements of the site and a micro‑retail approach intended to buffer nearby storage‑unit parcels.

City staff and the subcommittee that reviewed proposals recommended Palindrome on three grounds: team experience, the development program’s fit with the city’s Northeast Gateway vision, and the proposal’s responsiveness to community feedback gathered during the selection process, Richards said. The selection subcommittee and the McMinnville Urban Renewal Advisory Committee (MURAC) both voted to bring that recommendation to the urban renewal board.

Fiscal analysis: Leland Consulting Group presentation

Leland Consulting Group presented a 20‑year fiscal model comparing the three semifinalist proposals. The consultant used the firms’ reported project costs, standard tax and fee assumptions, and local property‑tax indexing rules (including change‑in‑property‑ratio adjustments under Oregon law) to estimate net present‑value revenues to the city and overlapping taxing districts.

Andrew Oliver of Leland summarized the results: “Palindrome’s proposal is likely to generate the most total revenue for the city, and the greatest diversity of types of revenue,” he said during the presentation. In Leland’s model, the Palindrome concept produced the largest net present value of fees and tax increment over a 20‑year horizon—roughly an order of magnitude larger than the smallest proposal in the comparison—largely because Palindrome included a hotel and a larger retail program. The model also estimated greater local employment and guest spending tied to the hotel component.

Terms Palindrome has requested and concerns raised

Palindrome requested several common incentives in public‑private partnerships, according to Richards’ presentation and the developer’s materials: the land available at no cost, system development charge and fee reductions that the city already offers to qualifying affordable housing components, and a 15‑year property‑tax exemption (for the affordable housing portion) rather than a perpetual nonprofit exemption. Richards told the board the Palindrome team is for‑profit and therefore would not qualify for perpetual nonprofit tax exemption.

MURAC and public comments raised several issues the city asked be addressed in the negotiation or development agreement: parking (the proposal did not meet the city’s off‑street parking standards as submitted), protections against developer nonperformance (clawback provisions and personal guarantees), and analysis of fiscal impacts on overlapping taxing districts at the time the urban renewal district sunsets. The committee also asked that community engagement continue throughout design and construction and that any sale or purchase of the land provide a “fair return” to the public.

City staff emphasized limits of tonight’s action: the board’s vote would authorize negotiating an MOU and would not finalize any development agreement. Richards reminded the group the board will set negotiation standards and limits in a future executive session with the city’s negotiation team.

Public input and next steps

Councilors asked about parking, the scale of the hotel and market hall, staffing and construction timelines, and the financial assumptions Leland used. Palindrome representatives in the audience said they expect to refine the design in negotiation and offered examples from prior projects where micro‑retail and mixed‑income housing were combined on an industrial site.

If the urban renewal board approves the MOU (Resolution 2025‑03), staff will enter negotiations with Palindrome. Any negotiated development agreement would be presented later in a public meeting for the board’s approval. Richards and Leland also told the board the fiscal model will be used as a negotiation tool and can be updated as terms evolve.

Clarifying details extracted from the meeting

- Site purchase: Oct. 23, 2023, for about $4.25 million plus closing costs (purchase funded by a loan from the city’s wastewater fund). - Site area: described in staff briefing as approximately 3.5 acres. - RFQ timeline: city issued an RFQ; eight responses in Phase 1; four interviews; three semifinalists (Ethos, Guardian, Palindrome); two‑phase process with community design workshop in Phase 2. - Palindrome concept (as presented): Phase 1 housing (presented as ~88 units with a stated affordable component); Phase 2 hospitality/commercial (51‑room hotel, ~11,000‑sq‑ft market hall, micro‑retail vendors). - Developer request highlights: land at no cost; use of existing city incentives for qualifying affordable housing; a 15‑year property‑tax exemption for the affordable housing portion. - Leland Consulting Group 20‑year model: Palindrome’s concept generated the largest net present‑value revenue projection in Leland’s comparison of the three semifinalists.

Sources and documents in the record

Materials reviewed at the work session include the RFQ and semifinalist submittals, the Palindrome proposal concept and project one‑sheet, fiscal impact analysis from Leland Consulting Group, MURAC recommendation materials and comments transmitted by subcommittee members, and the draft Resolution 2025‑03 (MOU authorization) scheduled for the urban renewal board. The fiscal memo from Leland and public comment letters were part of the meeting packet distributed before the session.

Ending: timing and what to watch

The urban renewal board will consider a resolution (2025‑03) authorizing the city manager to enter into an MOU to begin negotiations with Palindrome; the MOU would enable negotiations over the development agreement but would not itself approve a development agreement. Any final deal would return to the board for public approval. The timing for negotiations and any development agreement will depend on the board’s direction and on continued design and market considerations.

Speakers quoted in this article are identified in the meeting record and are listed in the speakers section below.