Milwaukie planners propose limited commercial uses and objective design standards for industrial zones

City planners Matthew Ellis (associate planner) and Will First (assistant planner) presented proposed updates to Milwaukie27s manufacturing (M) and business industrial (BI) zoning districts at the Planning Commission work session.

The planners said the project aims to modernize language that dates to the mid-1980s, consolidate multiple industrial definitions into one consistent code definition, and move discretionary standards into clear, objective tables so applicants and staff can more easily interpret allowable uses and development requirements. "As part of this project, we're not proposing to change the purpose statement of these zones," Will First told commissioners, while stressing the goal of clearer formatting and fewer discretionary barriers.

Why it matters: Milwaukie has limited industrial land and low vacancy in those districts, staff said, so the proposed changes try to balance protecting employment-oriented parcels while allowing small, complementary amenities and business types that support district users.

What planners proposed

- Manufacturing zone (M): Add "creative space" (small industrial-adjacent studios) and wholesale trade as permitted uses; replace multiple, slightly different industrial definitions with one consistent code definition to reduce confusion.

- Limited eating and retail: Allow limited eating establishments and retail-oriented sales in the M zone with a maximum size of 4,000 square feet to serve local workers without converting large industrial parcels to commercial uses.

- Business Industrial zone (BI): Add a limited-use allowance for indoor/outdoor recreation (examples: Pilates or yoga studios) capped at 4,000 square feet; maintain conditional-use review (Type 3) for larger recreation uses.

- Employee-serving requirement removed: Staff proposed removing the existing, hard-to-enforce requirement that limited uses "serve primarily the employees of the district," arguing that the 4,000-square-foot cap will prevent proliferation while reducing discretionary enforcement burdens.

- Objective site and building design standards: Replace vague building-and-site design language with measurable standards aimed at predictable outcomes (for example, standards that orient major service activity away from major streets). Projects meeting the objective standards could qualify for a streamlined Type 1 review rather than the longer Type 2 discretionary process.

Council and stakeholder input

Ellis said planners conducted outreach to state and county partners, business Oregon, the Department of Land Conservation and Development, Clackamas County economic development, local businesses (including Dave's Killer Bread and others), and commercial brokers. Staff reported low industrial vacancy (about 2%) and noted feedback emphasized preserving flexibility for industrial users while protecting limited industrial land from low-employment uses such as data centers or mini-storage.

Commission feedback and data

Commissioners pressed staff on several items: what "clean" industrial means (staff said the city27s industrial zones effectively function as light industrial and proposed removing natural resource extraction from the M zone), whether zoning along the Portland border matches Milwaukie27s designations (staff said they would check specifics), and whether allowing more commercial uses would materially change employment density.

Staff said an addendum comparing employment density and earnings showed the BI and M zones contain a substantial share of private-sector jobs (staff cited more than 35% of the city's private-sector jobs in the BI zone) and that earnings in those zones generally track citywide averages. Matthew Ellis also summarized a buildable-lands inventory and market-price review that indicated redevelopment costs (price per square foot) in many industrial parcels make teardown-and-rebuild economically difficult, limiting near-term large-scale conversions.

Recycling centers and the Recycling Modernization Act

City Council had flagged the Recycling Modernization Act during its review. Council members cautioned staff that changes to recycling policy could increase demand for smaller, specialized recycling centers. Staff said they had proposed removing an accessory use allowance for recycling centers in the BI zone but would reconsider that change in light of council feedback.

Marijuana processing uses

Staff noted some zones (notably the North Milwaukee Innovation Area) already allow marijuana processing/wholesale operations and proposed matching that allowance in the M/BI language for consistency, citing employment generated inside processing facilities. Commissioners may choose to limit that allowance to NMIA if they want to preserve NMIA27s unique character.

What happens next

Staff will incorporate commissioner feedback into a draft code amendment packet, include the employment-density and earnings analysis, develop the accompanying objective standards, and return for an adoption hearing and recommendation to City Council planned for late summer.

Votes at a glance

- Approval of minutes (04/14/2026): Motion to approve made and seconded; approved by voice vote. (Voice vote; count not recorded on the record.)

- Continuance: Motion to continue the Type 3 hearing for the K2D12 charter school at 5000 Southeast International Way (File CSUDash2026Dash001) to June 9; motion moved and seconded and approved by voice vote. (Voice vote; count not recorded on the record.)

- Adjournment: Motion to adjourn was moved, seconded and approved by voice vote.

Who spoke (selection)

- Will First, assistant planner (staff presenter) - Matthew Ellis, associate planner (staff presenter) - Commissioner Edge (recognized by the chair and asked multiple substantive questions) - Multiple commissioners who raised concerns about preserving industrial land, walkability, and the potential for vertical industrial redevelopment

Bottom line

Planners proposed modest, "light-touch" changes to clarify allowable uses and create objective design standards that would make small employee-serving amenities and limited recreation uses easier to permit while aiming to retain protections for scarce industrial land. Commissioners asked for more local adjacency analysis, data on employment ceilings, and caution about commercial encroachment; staff will return this summer with a draft ordinance package and the objective standards for review.