The city attempted its first annexations in 1986, but an advisory vote of existing residents rejected one proposal and the city council deferred action on another. Mill Creek approved its first annexation, an parcel southeast of the main development, in July 1987, while the nearby city of Everett began its own annexations of areas to the north of Mill Creek. In 1989, the city proposed a major annexation of , a 25 percent increase in size, to add undeveloped commercial parcels on the west side of the Bothell–Everett Highway. The western annexation was initially opposed by the county government, but was approved alongside four other annexations after Mill Creek agreed to share costs for road improvements to handle additional traffic demand.