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HomeMy WebLinkAboutItem 3 - Mills Act Program EvaluationMeeting Date: February 22, 2021 Item Number: 3 CULTURAL HERITAGE COMMITTEE REPORT FROM: Brian Leveille, Senior Planner BY: Chris Murphy, Planning Intern PROJECT ADDRESS: Citywide FILE NUMBER: NA For more information contact Brian Leveille, Senior Planner: 781-7166 (bleveille@slocity.org) 1.0 SUBJECT Mills Act program evaluation 2.0 RECOMMENDATION Review the program report and provide comments to staff. 3.0 BACKGROUND In 1972, the Mills Act Program was adopted as a state law by California State Legislature as an incentive program to preserve, maintain and restore Historic Structures. The program provides historic property owners with tax incentives in exchange for their commitment to historic preservation and to offset costs of maintaining and preserving historic properties. All cities in California have the option of enacting a Mills Act program and establishing standards that historic properties must meet to be eligible to participate in the program and receive the tax incentives. In October of 1996, the San Luis Obispo City Council approved a pilot Mills Act Program to encourage preservation and restoration of historic buildings within the City. The first Mills Act contracts were approved in 1997. The Mills Act Program allows the City to enter into preservation contracts with the owners of designated historic properties who promise to preserve, maintain, and in some cases, improve their properties in exchange for property tax savings. Under the City’s Mills Act program, the property must be on the Master List of Historic Resources. Historic preservation is an important General Plan goal and the Mills Act program is one of the most effective tools available to encourage the preservation of heritage properties. Under the program, the property owner enters into a contract with the City which requires preservation of the property, and specifies the maintenance and improvement measures the owner will conduct for the historic building for which tax savings will be used. The City conducts evaluations of properties in the Mills Act Program every five years through site visits, photo documentation, and sur veys and questionnaires. 3.1 Mills Act Contracts Historic Preservation is an important goal of the City’s General Plan, as described in Conservation and Open Space Element policies 3.21.1, 3.21.4, 3.30.2 and Land Use Element policy 4.12. By providing a financial incentive, the Mills Act Program is one of the most effective preservation tools available to achieve these goals and encourage the preservation of historic buildings. At this Item 3 Packet Page 15 Mills Act Program Report Page 2 time, it is the only financial incentive available for the preservation of historic properties in the City. Commercial and residential properties on the Master List of Historic Resources are eligible for the program. Mills Act contracts are prepared using standard language provided by the State Historic Preservation Office. Standard features of the contracts include: 1. The County Tax Assessor assesses the historic property’s value using a “Capitalization of Income” method. This assessment method can often result in significant property tax savings, particularly for properties acquired after the 1990s. If the contract is canceled, the assessment is gradually increased to market value basis over the remaining contract term. 2. The property owner must promise to preserve the building and to use the tax savings to maintain and/or improve the historic building to enhance its historical value, exterior appearance, structural condition, or longevity. Each contract includes an exhibit which lists the maintenance and improvement measures for which tax savings will be used. 3. The contract is recorded, and is binding on subsequent owners, heirs, or assigns until the agreement is canceled. There is a significant financial penalty for breach of the historic contract. 4. Mills Act Contracts have a minimum 10-year term. The agreement is self-renewing annually for additional one-year terms, so there is always 10 years remaining on the contract until the owner or City decides not to renew the contract. Once written notice of non-renewal is given, the contract will remain in effect for the balance of the term remaining since the original contract execution or since the last renewal date, as the case may be. The agreement may be amended by mutual consent of the City and property owner. 5. Building changes are possible under the contract; however changes must comply with all City requirements and with the Secretary of the Interior’s Standards for Historic Preservation Projects, with the guiding objective being the preservation of the building’s original historical character and significance. 4.0 DISCUSSION Mills act contracts are 10-year long commitments (self-renewing annually). There are currently 57 properties under a Mills Act contract and one property that is under a Historic Property Preservation Agreement: 3897 South Higuera. Because this contract also provides tax incentives for historic preservation over the course of a 10-year commitment, serving a similar purpose to the Mills Act, this property was evaluated as well, making 58 properties that were evaluated. See Attachment 1 for a complete list of evaluated properties. 4.1 Review Method To receive feedback and evaluate the City’s Mills Act Program, surveys were sent out to each property owner that has signed a contract with the city. The survey inquiries about how they have used their tax savings to complete maintenance measures listed on Exhibit “A” of their contracts, along with questions asking if have received property tax breaks and feedback they have regarding the program. Finally, the property owners were asked to provide their current Item 3 Packet Page 16 Mills Act Program Report Page 3 email address and phone number for more convenient communication and for future surveys to be sent via email. In addition to the mailed surveys, field visits were conducted to evaluate the current physical status of the property. Staff inspected exteriors of the property to determine if there were any apparent violations of contracts such as inappropriate alterations or failure to preserve and protect resources. 4.3 Site Visits Site visits were conducted from February through October of 2020. All 58 properties were visited to determine their condition and compliance with the program. Of the 58 properties visited, there were no noted significant issues with property maintenance or contract compliance. 4.2 Survey Results On December 4th, 2020, 58 surveys were sent to the addresses listed in the Mills Act property owners’ contracts. Of the 58 surveys sent, 33 responses have been received. The owners were very thorough about listing the maintenance items they completed. Most of these included dates an d costs of each improvement. A handful of the homes completed these improvements years ago, for example, one owner completed their list between the years of 2005-2009, however, they listed additional improvements they have made as well. Many of the other homes included additional maintenance and improvement efforts and even one mentioned that they would like to include a “Carriage House” on their property. The last question on the survey was asking for additional feedback which is where property owner feedback showed gratitude and appreciation for the program. Many owners stated that the cost to maintain these properties would cost thousands and they would not have been able to do so without the tax savings, assuring that their properties are now in better condition than when they purchased them. 5.0 CONCLUSION The results of the property owner survey responses and field visits verify staff’s ongoing experience that Mills Act property owners are engaged and cognizant of their responsibilities under the program. The program continues to effectively incentivized, and enabled improvements which will provide for the long-term preservation of many of the most important and unique historic resources in San Luis Obispo which are part of the Mills Act Historic Preservation Program. 6.0 ATTACHMENTS 1. List of Historic Properties Under Mills Act Contract Item 3 Packet Page 17 2020 Mills Act Property List Properties: 116 Chorro Street - The Michael Haplin House 148 Broad Street - The Brazil House 375 Chorro Street - The Chris Anholm House 461 Islay Street - The Erickson House 497 Islay Street - The Vollmer House 535 Islay Street - The Sandercock House 547 Marsh Street - The Kaetzal House 559 Pismo Street - The Biddle House 591 Islay Street - The Sandercock House 642 Monterey Street - The Hays/Latimer House 670 Islay Street - The Fitzpatrick House 690 Islay Street - The Kimball House 745 Buchon Street - The Bradbury House 752 Buchon Street - The Stanton House 771 Buchon Street - The Brew House 774 Marsh Street - The Snyder Building 785 Buchon Street - The Marshall House 800 Palm Street - The Ah San Luis Store 863 & 867 Pacific Street - Nuss House 868 Upham Street - The Harry E. Lyman House 896 Buchon Street - The Cosset House 963 Broad Street - The Manderscheid House 1052 Islay Street - The Kaufman House 1105 George Street - The Edward Bushnell House 1117 Marsh Street - The Esquar House 1123 Pismo Street - The Nuss House 1144 Palm Street - The Payne House 1160 Marsh Street - Stover’s Sanitarium 1167 Marsh Street - The Graves House 1212 Garden Street - The McCaffrey House 1214 Mill Street - Theresa Torres True House 1266 Mill Street - The Shipsey House 1306 Mill Street - The Lind House 1314 Palm Street - The Righetti House 1318 Pacific Street - The Louisiana Clayton Dart House 1323 Mill Street - The Laird House 1333 Mill Street - The Burch House 1352 Pacific Street - The Charles John Kelly House 1424 Mill Street - The Maino House 1426 Broad Street - The Dutton House 1428 Nipomo Street - The Rogers/Sandercock House 1429 Osos Street - The Frank Campbell Mitchell House 1435 Broad Street - The George Miller House 1443 Osos Street - The Avila House 1445 Broad Street - The Falkenstein House 1460 Mill Street - The Muggler House 1500 Eto Circle - The Solomon Foreman House 1504 Broad Street - The Vetterline House 1511 Morro Street - The Martha Dunlap House 1546 Chorro Street - The Fleugar House 1717 Santa Barbara Street - The William M. Duff House 1720 Johnson Street - The Judges House 1725 Santa Barbara Street - The Alexander Galewski 1746 Chorro Street - Aston House 1763 Santa Barbara Street - The Tribune-Republic Building 1815 Monterey Street - The Monday Club 1880 Santa Barbara Street - The Railroad Square 2030 Johnson Street - The Old SLO Highschool Classroom 3897 S Higuera Street - The Long/Bonetti Ranch Item 3 Packet Page 18 2020 Mills Act Property Photos 116 Chorro Street – The Michael Haplin House 148 Broad – The Brazil House Item 3 Packet Page 19 2020 Mills Act Property Photos 375 Chorro Street – The Chris Anholm House 461 Islay – The Erickson House Item 3 Packet Page 20 2020 Mills Act Property Photos 497 Islay - The Vollmer House Item 3 Packet Page 21 2020 Mills Act Property Photos 535 Islay – The Sandercock House 547 Marsh - The Kaetzal House Item 3 Packet Page 22 2020 Mills Act Property Photos 559 Pismo – The Biddle House Item 3 Packet Page 23 2020 Mills Act Property Photos 591 Islay – The Sandercock House 642 Monterey – The Hays/Latimer House Item 3 Packet Page 24 2020 Mills Act Property Photos 670 Islay – The Fitzpatrick House 690 Islay – The Kimball House Item 3 Packet Page 25 2020 Mills Act Property Photos 745 Buchon - The Bradbury House 752 Buchon - The Stanton House 771 Buchon – The Brew House Item 3 Packet Page 26 2020 Mills Act Property Photos 774 Marsh – The Snyder Building 785 Buchon - The Marshall House Item 3 Packet Page 27 2020 Mills Act Property Photos 800 Palm – The Ah San Luis Store 863 & 867 Pacific – Nuss House Item 3 Packet Page 28 2020 Mills Act Property Photos 868 Upham – The Harry E. Lyman House 896 - The Cosset House Item 3 Packet Page 29 2020 Mills Act Property Photos 963 Broad - The Manderscheid House 1052 Islay - The Kaufman House Item 3 Packet Page 30 2020 Mills Act Property Photos 1105 George – The Edward Bushnell House 1117-1119 Marsh - The Esquar House Item 3 Packet Page 31 2020 Mills Act Property Photos 1123 Pismo – The Nuss House 1144 Palm – The Payne House Item 3 Packet Page 32 2020 Mills Act Property Photos 1160 Marsh - Stover’s Sanitarium 1167 Marsh – The Graves House Item 3 Packet Page 33 2020 Mills Act Property Photos 1212 Garden – The McCaffrey House 1214 Mill Street – Theresa Torres True House Item 3 Packet Page 34 2020 Mills Act Property Photos 1266 Mill – The Shipsey House Item 3 Packet Page 35 2020 Mills Act Property Photos 1306 Mill – The Lind House 1314 Palm - The Righetti House Item 3 Packet Page 36 2020 Mills Act Property Photos 1318 Pacific – The Louisiana Clayton Dart House 1323 Mill Street – The Laird House Item 3 Packet Page 37 2020 Mills Act Property Photos 1333 Mill – The Burch House Item 3 Packet Page 38 2020 Mills Act Property Photos 1352 Pacific - The Charles John Kelly House 1424 Mill – The Maino House Item 3 Packet Page 39 2020 Mills Act Property Photos 1426 Broad – The Dutton House Item 3 Packet Page 40 2020 Mills Act Property Photos 1428 Nipomo - The Rogers/Sandercock House Item 3 Packet Page 41 2020 Mills Act Property Photos 1429 Osos - The Frank Campbell Mitchell House Item 3 Packet Page 42 2020 Mills Act Property Photos 1435 Broad – The George Miller House Item 3 Packet Page 43 2020 Mills Act Property Photos 1443 Osos Street – The Avila House 1445 Broad - The Falkenstein House Item 3 Packet Page 44 2020 Mills Act Property Photos 1460 Mill – The Muggler House 1500 Eto Circle - The Solomon Foreman House Item 3 Packet Page 45 2020 Mills Act Property Photos 1504 Broad - The Vetterline House 1511 Morro - The Martha Dunlap House Item 3 Packet Page 46 2020 Mills Act Property Photos 1546 Chorro - The Fleugar House 1717 Santa Barbara – The William M. Duff House Item 3 Packet Page 47 2020 Mills Act Property Photos 1720 Johnson – The Judges House 1725 Santa Barbara - The Alexander Galewski Item 3 Packet Page 48 2020 Mills Act Property Photos 1746 Chorro - Aston House Item 3 Packet Page 49 2020 Mills Act Property Photos 1763 Santa Barbara - The Tribune-Republic Building 1815 Monterey – The Monday Club Item 3 Packet Page 50 2020 Mills Act Property Photos 1880 Santa Barbara Street – The Railroad Square 2030 Johnson - The Old SLO Highschool Classroom Item 3 Packet Page 51 2020 Mills Act Property Photos 3897 South Higuera – The Long/Bonetti Ranch Item 3 Packet Page 52 Mills Act Program Review2020 Mills Act Background •Adopted in 1972 as an incentive program for historic preservation •Property Owners receive tax relief to maintain historic buildings •Property Owners enter Mills Act Contracts with their City Ah Louis Store –Built in 1885 –San Luis Tribune Mills Act Program in San Luis Obispo •Launched in 1996 –first contracts approved in 1997 •Over 50 contracts approved since adopted •Necessary maintenance is outlined in Mills Act Contracts •Property owners use their tax savings to complete required maintenance The Lind House Evaluation Method •2020 Mills Act program evaluated 58 properties •Questionnaires •Site Visits •Photo Documentation Mills Act Questionnaire The Shipsey House Survey Results •33 responses out of 58 questionnaires •Maintenance measures •Additional maintenance •Additional feedback Mills Act Questionnaire Listed Maintenance Conclusion •Property owners are engaged in the program & respect their contracts •Program continues to incentivize historic preservation The Railroad Square