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After the delivery and sale of the 188-unit Tupelo Alley in North Portland in 2008, Sam Rodriguez thought he had pinned down a successful method for developing apartment complexes in the city.

But even as he gets ready to start a similar 179-unit complex along the trendy Northwest 23^rd Avenue, Rodriguez is realizing the development game has changed in two years. Most notably, the city’s development fees have increased to a point that Rodriguez says could stop his newest project and others like it dead in their tracks.

“I’ve added up every fee that we paid on Tupelo Alley and all the fees that we would need to pay on this new project to compare them on a unit-by-unit basis,” Rodriguez said. “Let’s just say that I was more than shocked to find out that the fees have increased a total of 98 percent over that three-year period.”

In 2008 Portland City Council led a charge to update the methodology used to create system development charges. SDCs are one-time fees assessed to new developments to cover a portion of the cost to provide services such as parks.

The main purpose of the update was to increase SDCs to cover 75 percent of the cost of providing services to an area, said Riley Whitcomb, the manager of the SDC for Portland Parks and Recreation.

The city bumped up the SDCs by 50 percent of the overall increase in January 2009, and then raised them to the full amount in January of this year.

While all SDCs increased, the most noticeable increase was the parks department charge, which Whitcomb said “basically doubled.”

“Departments like (Bureau of Development Services) and the Water Bureau can make up some of their costs with fees, but we can’t,” Whitcomb said. That was taken into account when the methodology was created, he said.

Jack Menashe, president of Ruben J. Menashe, Inc., said the fee increases – especially the parks SDC increase – have his proposed 72-unit apartment complex in North Portland “teetering on the line of unfeasible.”

Menashe received his first SDC estimations in January of 2009, right after the first phase of the new fees went into place. Between those estimated SDCs and the newest ones he was quoted a month ago, the costs increased by 68.8 percent, he said.

The biggest jump, according to Menashe, was in the park SDC. The fee was first quoted at $180,631 for the new apartment complex. The fee is now $380,404.

“I knew the fees were going to increase, but I couldn’t believe it when I saw the difference,” Menashe said. “Right now the margins are so tight with the economy that this will literally stop some developments from ever happening.”

Rodriguez and Menashe both said that when they noticed the size of the SDC increased, they contacted Portland Mayor Sam Adams‘ office and set up meetings with his staff.

“I needed to remind them that zero times whatever they decide to increase the fees to will still equal zero,” Rodriguez said. “If they are going to increase the fees this much, development will simply not happen and they won’t get their fees.”

According to Rodriguez the meeting went well. The mayor’s staff told Rodriguez they would take his concerns to the mayor and have a response in the next two weeks, he said.

The mayor’s office, and the city in general, have been hearing about the fees from developers for a while now, said Jim Blackwood, policy advisor for Commissioner Nick Fish, the city commissioner who oversees the parks department. But Adams has been looking at those concerns on a case-by-case basis, Blackwood said.

“If the mayor or the council decided to take a look at it again, we would,” Blackwood said. “But we haven’t heard anything yet.”

Whitcomb also pointed out that it’s not the city stalling the projects. It’s the developers not wanting to pay the fees that are holding up projects, he said.

But Rodriguez disagrees.

“We pay these fees per unit, yet units are getting smaller because of lower rents and higher land costs,” he said. “So why should we have to pay more?

“This is just another barrier standing in the way from projects getting going again.”