HomeMy WebLinkAbout02/07/1995, 4 - CHC REQUEST TO INITIATE HISTORIC PRESERVATION TAX INCENTIVE PROGRAM. IIIN�►Alll�llllllllll��Ilfl
city
DATE:
fn�u►I I ci"J orf san tuts osIspo z--7- 95
RUNZO COUNCIL AGENDA REPORT ITEM NUMBER:
FROM: Arnold Jonas, Community Development Director; By: Jeff Hoo I sociate Planner
SUBJECT: CHC Request to initiate Historic Preservation Tax Incentive Program.
CAO RECOMMENDATION: Adopt resolution establishing a historic preservation tax
incentive program and authorizing the Mayor to send a letter to the San Luis Obispo County
Assessor initiating the program.
ADVISORY BODY RECOMMENDATION
At its November 28, 1994 meeting, the Cultural Heritage Committee (CHC) voted 5-0 (Carr
Absent; one seat vacant) to recommend that the City Council establish a historic property tax
incentive program and send a letter to the County Tax Assessor to initiate the program.
SITUATION
One historic preservation tool available to cities and property owners is the so-called "Mills
Act." This provision of State law allows qualifying historical properties to be assessed based
on an income approach, rather than on comparative sales data. In some cases, this can result
in significant tax savings for property which is "enforceably restricted" through a historical
property contract.
The CHC has recommended that the City Council establish and promote the incentive program
as part of the City's historic preservation program. Tax incentives are a positive, partnership
approach to historic preservation. The City establishes the program, determines which
properties are eligible through its authority to designate locally significant historic properties,
and enters into historic preservation contracts with property owners who choose to participate.
The property owner agrees to maintain (and in some uses, restore) historic properties according
to adopted preservation standards in return for tax benefits. The County participates by
assessing participating historic properties according to methods outlined by State law.
Although legally available since 1977, this special tax.assessment method has not been applied
in San Luis Obispo County, although other communities have established similar programs,
including the cities of Los Angeles, Santa Barbara, La Verne, Rancho Cucamonga and South
San Franciso. Following up on a presentation at the American Planning Association Conference
in San Francisco last Spring, staff looked into starting such a program in San Luis Obispo.
After meeting with the County Assessor, staff determined that a tax incentive program was
feasible and that it could promote the City's historic preservation goals by encouraging the
preservation and "listing" of historic properties through the potential tax benefits. The CHC
held a public hearing to discuss the incentive, and concurred that it could have significant public
benefits. Committee members voted unanimously to establish such a tax incentive program in
San Luis Obispo to benefit properties on the Master List of Historic Resources.
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iMlaMs COUNCIL AGENDA REPORT
Staff Report
Page 2
DISCUSSION.
General Plan policies strongly encourage the preservation of historic structures. For example,
the Land Use Element provides that:
"Historically or architecturally significant buildings should not be demolished or
substantially changed in outward appearance, unless doing so is necessary to remove a
threat to health and safety and other means to avoid the threat are infeasible. The street
appearance of buildings which contribute to a neighborhood's architectural character
should be maintained. "
To implement preservation policies, the Conservation Element recommends that:
"Accommodations for upgrading buildings having historical significance should be
included in the building code. Zoning regulations and tax rate structures should be
revised to encourage renovation of such buildings. "
The Mills Act provides jurisdictions with an important preservation tool by giving them the
statutory authority to assess designated historic properties differently than non-historic properties.
To qualify, a property must be designated on a Federal, State or local historic listing, and must
be covered under an historical property contract, as defined in Government Code Section
50280.1 (attached). Basically, the contract is a minimum 10-year guarantee to maintain the
property's historic character and to provide reasonable public access for viewing the property.
The law requires county assessors to assess enforceably restricted historical properties by a
"capitalization of income method" instead of the usual "comparative fair market value" method,
a method which can result in lower assessed values, and hence, lower property taxes for
residential and commercial properties.
The program is optional. It would be available to both commercial and residential properties.
Once the owner of a designated historic property enters into a "Historical Property Contract"
with the City, the Assessor must use the alternative assessment method to determine taxes for
that property if it results in a lower tax assessment. Either the property owner or the City may
cancel the historical contract prior to expiration by providing advanced notice, and there is a
"recapture" provision for early property owner cancellation of the contract.
There are approximately 170 properties on the City's Master List of Historic Resources, and
only these properties would be eligible for the program; however not all would benefit from this
alternative assessment method. For example, historic residential properties purchased in the last
5 to 10 years are likely to receive significant tax savings. However properties which have been
under the same ownership since the passage of Proposition 13 are less likely to benefit from the
program.
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NonZa COUNCIL AGENDA REPORT
Staff Report
Page 3
Such a tax incentive program could benefit the public and individuals by rewarding property
owners who choose preservation over demolition, and by defraying some of the costs of historic
restoration projects, including seismic retrofits of historic unreinforced masonry buildings where
the original character of the building is retained and/or restored.
CONCURRENCES
Finance Department has reviewed the program, and supports its implementation.
FISCAL EMPACT
The program could encourage long-term preservation of historic buildings and neighborhoods
at relatively low cost to the City. Participation in this type of tax incentive program is not
expected to significantly affect City or County tax revenues, although the actual fiscal effects
are difficult to determine and depend on: number of properties participating, current property
uses and last reassessment date, and property value.
An important factor to consider in adopting such a program is its potential effect on property
tax revenues. Alternate assessments for a limited number of historic properties would slightly
reduce property tax revenues. A worst-case approximation of the reduction of City property tax
revenues can be calculated as follows:
Total assessed valuation of City Master List properties $54,807,482
Total assessed valuation under new assessment method' $27.403.741
New property tax valuation for historic properties $2794039741
To determine the tax revenue impact on the City, the new assessed valuation is then multiplied
by 1 percent (tax rate) to calculate property tax, and then by .14 percent to determine the City's
share of the property tax revenue:
$277403,741 X .01 X .14 = $38,365
Thus, the City could lose approximately$38,000 in property tax revenue annually assuming that:
1) all of the properties on the Master List participated in the tax incentive program; and 2) the
assessed valuation of all properties was reduced by 50 percent. This would represent a reduction
of approximately one percent in the City's total tax revenue ($38,000/$3,647,500)for fiscal year
1993/94. These "worst-case" assumptions are highly unlikely, and the actual fiscal effects
would probably be much less than the $38,000 estimate. Many of the Master List properties
have been under the same ownership since the early 1970s and would not benefit from the
special assessment; and actual participation is likely to be less than one-half of the eligible
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aftling= COUNCIL AGENDA REPORT
Staff Report
Page 4
properties.
Consequently, a more realistic approximation of program cost is $15,000 to $20,000
annually. In return, the City would receive both direct and indirect benefits: increased
reinvestment in historic properties, improved building appearance and maintenance, and along
with the City's Seismic Rehab Loan Program, increased property owner interest in seismic
rehabilitation of URM buildings.
To proceed with the program, the City Council should adopt a resolution establishing the
program's purpose and intent, and formally request that the County Assessor establish
procedures for assessing historic properties pursuant to State law. A copy of a draft letter is
attached. Application procedures will be developed by the CHC and staff, and included in the
updated Historic Preservation Program Guidelines coming to the Council this Spring.
'According to a Deputy Assessor for San Luis Obispo County, a reduction in assessed valuation
(land plus improvements) of between 33 and 50 percent per property can be expected for
qualifying historic properties which have been sold since the passage of Proposition 13.
Attachments:
-Draft Resolution
-CHC Minutes (forthcoming)
-California Government Code excerpt
-Draft letter to County Tax Assessor
,�/L:taaeaZ.rpt
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RESOLUTION NO. (1995 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
ESTABLISHING A HISTORIC PROPERTY TAX INCENTIVE PROGRAM AND
AUTHORIZING THE MAYOR TO INITIATE THE PROGRAM WITH THE
COUNTY OF SAN LUIS OBISPO.
WHEREAS, Article 1.9 of the California Revenue and Taxation Code provides for the
differential property tax assessment of certain enforceably restricted properties to encourage
historic restoration and preservation; and
WHEREAS, the City's General Plan policies encourage the use of tax incentives and
other means to encourage property owners to protect, restore and preserve historic buildings;
and
WHEREAS, tax incentives for qualifying historic properties benefit the entire community
and improve the City's appearance by encouraging the preservation and restoration-of heritage
buildings, fostering pride and reinvestment in neighborhoods, and by defraying a portion of the
costs of restoring and maintaining historic structures; and
WHEREAS, the City's Cultural Heritage Committee has considered the potential costs
and benefits of a property tax incentive program, and has recommended the establishment of
such a program pursuant to State law; and
WHEREAS, this City Council has considered the Committee's recommendation and
desires to establish a tax incentive program in the City of San Luis Obispo, based on the findings
herein described;
NOW THEREFORE BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Findings. The Council finds the following:
1. The proposed Historic Property Tax Incentive Program is consistent with the
General Plan, and will implement policies therein calling for the protection,
restoration, preservation and maintenance of historically significant structures; and
2. The proposed Program will benefit the Public by enhancing the Community's
appearance and preserving historically significant buildings which help describe
and document the Community's heritage; and
�-s
Council Resolution No. (1995 Series)
Page 2
3. Adoption of the proposed Program is exempt from environmental review under
the City's Environmental Guidelines and under Section 15308 of the California
Environmental Quality Act.
SECTION 2. Historic Property Tax Incentive Program Established. The Council hereby
establishes a tax incentive program known as the "Historic Property Tax Incentive
Program", to be administered by the Community Development Director, on advice and
recommendation of Cultural Heritage Committee, subject to State Law and the following
local requirements.
A. The purpose of the program is to encourage the restoration, preservation and
upkeep of historic structures in the City of San Luis Obispo, including both
residential and commercial properties.
B. Participating properties may be located anywhere in the City. Only those
properties listed in the "Master List of Historic Resources" shall be eligible to
participate in the tax incentive program.
C. To qualify for the program, owners of eligible properties must enter into a
Historical Property Contract with the City of San Luis Obispo. The Community
Development Director is hereby authorized to execute such contracts, subject to
the City's Historic Preservation Program goals, policies and preservation
guidelines, and subject to the requirements of State law.
D. The City Council may amend or terminate the program by resolution at any time,
after holding a public hearing and providing appropriate public and property
owner notice, as required by law.
E. The Community Development Director shall establish application and review
procedures to administer the program. Participation in the program is optional,
and shall be at no cost to the property owner. The City may charge reasonable
and necessary fees to recover costs of executing, filing, and administering
historical property contracts.
SECTION 3. Authorization to Initiate the Program. The Mayor is hereby authorized to send
a letter to the County of San Luis Obispo to initiate the program.
V-4
Council Resolution No. (1995 Series)
Page 3
On motion of , seconded by and on the
following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this 17th day of January, 1995.
Mayor Allen Settle
ATTEST:
Diane Gladwell, City Clerk
APPROVED:
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jWL:laxea2.rpt
§ 437 PROPERTY TAXATION—ASSESSMENT HISTORICAL PRI-
Div. I - Pt. 2
amounts by a factor of 100 and dividing the product by the secured tax rate which is subject to a l
for the prior year. 12 (commencing wit),
(Added by Stais.1976, c. 176, D. 320, § 11, eff. Mav 24. 1976. Amended by Stats.1977. Title 5 of the Govcrnr
98
e. 853,p.2575. § 18.5, eff. Sept. 17. 1977; Siats.10, c. 1205. p. 4083, § 77; Stats.I9F4, (Added by Sia,.x.1977, c
c. 678, § 23.) L
Historical Note = The 19E5 amendment sut
The 1977 and 1980 amendments in the first The 1984 amendment, at the end of the first in Section 50280.1 of the
paragraph made changes in a reference to a paragraph, deleted "and distributed pursuant — for "meeting the requirer
section in the Revenue and Taxation Code. to Section 38906 of the Revenue and Taxation
Application of provisions of Stats.1977, c• Code" and in the second paragraph following
853,p.2557,to all activities undertaken pursu- "Government Code" deleted "and distributed § 439.2. Valuation;
ant to Stats.1976, c. 176, p. 293, see note under pursuant to Section 38905 of the Revenue and When valuing enfor
Gov.C. § 51100. Taxation Code'. shall not consider sale
Cross References - restricted, and shall v.
Average annual assessed value attributable to timber, see Government Code § 27423. tion of income methe
Library References `—T (a) The annual ince
Taxation C-347. (1) Where sufficient
U.S.Tau:ion § 410. — fair rent which can 1
valued based upon rel
upon typical rentals r•
Article 1.9 where the owner pa:
HISTORICAL PROPERTY property being valued
equivalent considered
Section amount for which One
439. Enforceably restricted property. payment to be re
439.1. Restricted historical property. applicable provisio,,�
439.2. Valuation; capitalization of income method; determination.
439.3. Notice of nonrenewal of contract; valuation. — (2) Where sufficient
439.4. Recordation of enforceable restriction prior to lien date. that which the restrict
expected to
Article 1.9 was added by Stau.19sions under which t77, c. 1040, p. 3153, § 4. 3wunhe
which
(3) If the parties to .
§ 439. Enforceably restricted property =� stipulate therein an arr.
For the purposes of this article_and within the meaning of Section 8 of be capitalized, then tl-
Article XIII of the Constitution, property is "enforceably restricted" if it is - amount so stipulated.
subject to an historical property contract executed pursuant to Article 12 :tw For purposes of this
(commencing with Section 50280) of Chapter 1 of Part 1 of Di-,ision 1 of Title = rules and regulations i
5 of the Government Code. the difference betwee
s
(Added by Stats.1977, c 1040, p. 3153, § a.) amount of money or rr11m:
which the property car.
Library References the average from any t
Health and F and Environment
Xent theproperty is enforce
U.S. Health and Environment § 61 et seq.
State and Local Taxation, Lane, § 114. Expenditures shall b•
money's worth that ca:
§ 439.1. Restricted historical property I received during the pe
For purposes of this article "restricted historical property' means qualified tures to be charged ae
historical property, as defined in Section 50280.1 of the Government Code, = and necessary in the
398 AUK
a
y-8
HISTORICAL PROPERTY § 439.2
Pt. 2
,.v.hich is subject to a historical property contract executed pursuant to Article
12 (commencing with Section 50250) of Chapter 1 of Part 1 of Division 1 of
Title 5 of the Government Code.
(Added by Stats.1977, c. 1040, p. 3153, § 4. Amended by Stats.1985, c. 965, § 9.)
Historical Note
The ]955 amendment substituted "as defined (commencing with Section 50:1) of Chapter 1
:n Section 50'So.l of the Goternment Code" of Div;sion 5 of the Public Resources Code':
for "meeting the requirement$ of Article 3 and made a grammatical ctange.
§ 439.2. Valuation; capitalization of income method; determination
When valuing enforceable restricted historical property, the county assessor
shall not consider sales data on similar properly, whether or not enforceably
restricted, and shall value such restricted historical property by the capitaliza-
tion of income method in the following manner:
(a) The annual income to be capitalized shall be determined as follows:
(1) Where sufficient rental information is available, the income shall be the
fair rent which can be imputed to the restricted historical property being
valued based upon rent actually received for the property by the owner and -. .
upon typical rentals received in the area for similar property in similar use
`,ere the owner pays the property tax. When the restricted historical
,perty being valued is actually encumbered by a lease, any cash rent or its ` r
equivalent considered in determining the fair rent of the property shall be the r
amount for which the property would be expected to rent were the rental ,
payment to be renegotiated in the light of current conditions, including
applicable provisions under which the property is enforceably restricted. .
(2) Where sufficient rental information is not available, the income shall be
that which the restricted historical property being valued reasonably can be
expected to yield under prudent management and subject to applicable provi-
sions under which the property is enforceably restricted. _
(3) If the parties to an instrument which enforceably restricts the property _
stipulate therein an amount which constitutes the minimum annual income to
be capitalized, then the income to be capitalized shall not be less than the
amount so stipulated.
For purposes of this section income shall be determined in accordance with
rules and regulations issued by the board and with this section and shall be
the difference between revenue and expenditures. Revenue shall be the
amount of money or money's worth, including any cash rent or its equivalent,
which the property can be expected to }held to an owner-operator annually on
the average from any use of the property permitted under the terms by -which
the property is enforceably restricted.
Expenditures shall be any outlay or average annual allocation of money or
money's worth that can be fairly charged against the revenue expected to be _
received during the pehod used in computing such revenue. Those expendi-
tures to be charged against revenue shall be only those which are ordinary
-nd necessary in the production and maintenance of the revenue for that
399
I
§439.2 PROPERTY TAXATION—ASSESSMENT HISTORICAL PR(
Div. 1 Pt. 2
period. Expenditures shall not include depletion charges, debt retirement, § 439.3. Notice
interest on funds invested in the property, property taxes, corporation income
taxes, or corporation franchise taxes based on income. Notwithstanding
or
(b) The capitalization rate to be used in valuing owner-occupied single county or citcontract has servey ,e
d
family dwellings pursuant to this article shall not be derived from sales data
and shall be the sum of the following components: Government Code,
property as proyidt
(1) An interest component to be determined by the board and announced (a) Follotying th
no later than September 1 of the year preceding the assessment year and
which was the yield rate equal to the effective rate on conventional mortgages Government Code,
as determined by the Federal Home Loan Bank Board, rounded to the near- period for which t
est 1/4 percent. (b) The board or
(2) An historical property risk component of 4 percent. for which the prop
(3) A component for property taxes which shall be a percentage equal to (1) Determine th
the estimated total tax rate applicable to the property for the assessment year an enforceable rest
times the assessment ratio. (2) Determine th
(4) A component for amortization of the improvements which shall be a method as provide•
percentage equivalent to the reciprocal of the remaining life. notice of nonrenev.
(c) The capitalization rate to be used in valuing all.other restricted histori- (3) Subtract the
cal property pursuant to this article shall not be derived from sales data and capitalization c'
shall be the sum of the following components: i of this subdivi.
(1) An interest component to be determined by the board and announced (4) Using the rat
no later than September 1 of the year preceding the assessment year and subdivision (b) of
which was the yield rate equal to the effective rate on conventional mortgages (3) of this subdivis
as determined by the Federal Home Loan Bank Board, rounded to the near- 1 nation of the perio
est /. percent.
(5) Determine th
(2) An historical property risk component of 2 percent. the capitalization r
(3) A component for property taxes -which shall be a percentage equal to subdivision and the
the estimated total tax rate applicable to the property for the assessment year (6) Apply the rat
times the assessment ratio. determined in para
(4) A component for amortization of the improvements which shall be a (Added by Stats-1977
percentage equivalent to the reciprocal of the remaining life.
(d) The value of the restricted historical property shall be the quotient of
the income determined as prodded in subdivision (a) divided by the capitali- The 1984 amendmen-
zation rate determined as provided in subdivision (b) or (c). troductory paragraph.
(e) The ratio prescribed in Section 401 shall be applied to the value of the
property determined in subdivision (d) to obtain its assessed value. § 439.4. Record:
(Added by Stats.1977, c. 1040, p. 3153, § 4. Amended by Siats.19P, c. 675, § 24.) No property shal
Historical Note restriction meeting
The 1984 amendment deleted, from the in- of sun•e%s required by Section IS].; of this ! recorded on or bef
trodunory paragraph. ••the board for purposes code and" preceding **the county assessor". would apply.
Llbrarr References (Added by Stats.1977
State and local Taxation. Lane. § 119. t
4OO I'a so Cal copF+s
T
+iBr
HISTORICAL PROPERTY § 439.4
Pt. 2
§ 439.3. Notice of nonrenewal of contract; valuation
Notwithstanding any provision of Section 439.2 to the contrary, if either the
county or city or the owner of restricted historical property subject to
contract has served notice of nonrenet+•al as provided in Section 50282 of the
Government Cotte, the county assessor shall value such restricted historical
property as provided in this section.
(a) Following the hearing conducted pursuant to Section 50285 of the
Government Code, subdivision (b) shall apply until t`,e termination of the
period for which the restricted historical property is enforceably restricted.
(b) The board or assessor in each year until the termination of the period
for which the property is enforceably restricted shall:
(1) Determine the full cash value of the property as if it .were not subject to _
an enforceable restriction;
(2) Determine the value of the property by the capitalization of income
method as provided in Section 439.2 and without regard to the fact that a
notice of nonrenewal or cancellation has occurred;
(3) Subtract the value determined in paragraph (2) of this subdivision by 3.
capitalization of income from the full cash value determined in paragraph (1)
of this subdivision;
(4) Using the rate announced by the board pursuant to paragraph (1) of =3 = _
subdivision (b) of Section 439.2, discount the amount obtained in paragraph
(3) of this subdivision for the number of years remaining until the termi- - _
nation of the period for which the property is enforceably restricted; _ -
(5) Determine the value of the property by adding the value determined by
the capitalization of income method as provided in paragraph (2) of this
subdivision and the value obtained in paragraph (4) of this subdivision; and
(6) Apply the ratios prescribed in Section 401 to the value of the property = _
determined in paragraph (5) of this subdivision to obtain its assessed value. _
(Added by Stats.1977, c. 1040, p. 3155, § 4. Amended by Stats.1984, e. 678, § 25.)
Historical !rote
The 1964 amendment deleted, from the in- poses of surveys required in Section 1815,and" +
trodunory paragraph, the board, for pur• preceding "the county assessor".
§ 439.4. Recordation of enforceable restriction prior to lien date
No property shall be valued pursuant to this article unless an enforceable
restriction meeting the requirements of Section 439 is signed, accepted and
recorded on or before the lien date for the fiscal year in which the valuation
would apply.
(Added by Stats.1977, c. 1040, p.-3156, § 4.) —
so c..coe�+s 401
I --
§ 50279.4 CITIES AND COUNTIES Title 5 i Div. 1
city selection committee to a regional coastal zone conservation com- i by ordi,
mission pursuant to Division 18 (commencing with Section 27000) of property ar.
the Public Resources Code, the city selection committee created in deems reasc
such county pursuant to this article shall make such appointments. i title 1.9 (co
Each such city selection committee shall hold an organizational meet- vision 1 of tl
ing for such purposes prior to December 31, 1972. { (Added by F
(Formerly § 50281, added by Stats.1972, c. 1232, p. 2376, § 1, eff. Dec. 13, 1040, P. 3152.
1972. Renumbered § 50279.4 and amended by Stau.1979, c. 373, p. 1318, § ..
158.) }
The ]PTT am
Historical Note cle 1.9 (cotn:n,
i Chapter 3" fo
The 1979 amendment renumbered the with Section 11-
section without change.
i
Library References
Counties X40. C.J.S.Counties S 74. ; See R'est's Cal
Article 12 Health and E:
HISTORICAL PROPERTY CONTRACTS
sec. 1 - § 50281.
50280. Historic zone; creation by ordinance; application of owner. }
50281. Contract with owner of qualified historical property within his- ! The leg
toric zone; provisions. _ contract wit
50282. Renewal; nonrenewal; notice; protest; recordation; effect. Cn histo
50283. Removal of property from historic zone; equivalency to notice acteri tip s
to nonrene-a-al; service of notice. tered into u
50284. Cancellation; grounds.
50285. Cancellation; notice; hearing. (a) The
50286. Cancellation; fee; payment. _ 20 years.
50287. Action to enforce contract; parties.
50288. Acquisition of property by eminent domain; cancellation of con- i (b) Wh
tract; inapplicability to determination of value. j (1) For
50289. Annexation by city of property under contract to county; rights t when necessi
and duties of city. to the rules .
50290. Consultation with state commission and department - tion.
Article 12 was added by Stats.1972,c. 1442,p.3159, § 1. j (2) For
ual observati
i -- lates to the
§ 50280. Historic zone; creation by ordinance; application of j the owner s
owner i ^ premises, at
Upon the application of an owner or the agent of an owner of 1
any qualified historical property described in Article 3 (commencing (3) For
with Section 5031) of Chapter 1 of Division 5 of the Public Resources premises to s
Code, the legislative body of a city, county, or city and county may,
= interior desi€
312 -c
I�`
l it. I POWERS AND DUTIES-4YENERAL S 5 281
rdinance, create an historic zone encompassing so much of such
property and so much additional property as the legislative body
deems reasonable to carry out the purposes of this article and of Ar-
ticle 1.9 (commencing with Section 439) of Chapter 3 of Part 2 of Di-
vision 1 of the Revenue and Taxation Code.
(Added by Stats.1972, c. 1442, p. 3159, 1. .Amended by Stats.19 i 1, c.
:040, p. 3152, j 2.)
Historical Note
The ]A:. amendment substituted '•Ani• Former ¢ 5o'qo• added s`reau heed §
,le 1.4 (cammenmg aitl, Section 4:'•41 of ].32. P. -3�6• ¢ ]•
l'hapeer o' for '.Article , vommentiag 30974= and amendrd h}• Stats.19.4, c.
W:tli Section 1161) of Chapter V. 373,P.1311. ¢ 357. _
Forms -
see West's California Code Forms. Government
Library References s
n q C.J.S. Health and F-wironment ¢¢ 61 et `
Health and Environment a-5.5( )• i.. ....
seq.,115 et seq.
§ 50281. Contract Kith oa"ner of qualified historical property -
within historic zone; provisions (Refer to Amendment
The legislative body of a city, county, orcity and county may following) :..
qualified historical property within
contract with the owner of any q .�.
historic zone to restrict the use of such property to retain its char- _
-
_teristics as property of historical significance. Any contractprovisions:
-•
en-
tered into under this article shall contain the following p v
(a) The term of the contract shall be for a minimum period of
N years. .-
10 —_ -
(b) Where applicable,the contract shall provide:
(1) For the preservation of the qualified historical property and,
when necessary, to restore and rehabilitate such property to conform
to the rules and regulations of the Department of Parks and Recrea-
tion.
(2) For reasonable public access to the property, including vis-
ual observation of the exterior. If the interior of the premises re- "-
lates to the property's eligibility as a qualified historical property,
the owner shall also agree to public access to the interior of the
premises, at least to the extent of allowing tours on a limited basis.
(3) For reasonable access to the interior and exterior of the F .-
premises to students of history, architecture, landscape architecture, _._`.
interior design, archaeology, and similar disciplines, and to represent- _
313 `
y-�3
- Tr-7-
§ 50281 CITIES AND COUNTIES Title 5 - Dig-. I
allves of local, state, and federal government conducting recording lative body s'
and survey program`• tract, which
(4) For such periodic examinations of the interior and exterior a reference t
of the premises by the assessor, the Department of Parks and Recr ea- which the pr(
tion, and the State Board of Equalization as may be necessary to de- - such contract
termine the owner's compliance with the contract. forded by the
(5) For it to be binding upon, and inure to the benefit of, all (Added by Sta
successors in interest of the owner. ?. successor in interest shall
have the same rights and obligations under the contract as the origi- !!!!� § 50283.
nal owner who entered into the contract.
(Added by Ststs.1972, c. 1442, p. 3159, § 1.) The effe(
Historical Note i - is zone shall i
t - county rezon
,,0
Former? —,r. added by .Iate .rc, C. 502,9.4 and amended by caz..197P, c. _ 60 days prior
1231, p. 376, 6 1, -as renumbered E 373,P.1315,¢ 25S. _
- notice of non:
§ '550282. Renewal; nonrenewal; notice; protest; recordation: (Added by Sta
effect _
(a) Each contract shall provide that on the anniversary date of _ § 5O2$4.
the contract or such other annual date as is specified in the contract - The legis
a year shall be added automatically to the initial term of the contract = the owner ha
unless notice of nonrenewal is given as provided in this section. If - tided for in t
the property owner or the legislative body desires in any year not to the point t"
renew the contract, that party shall serve written notice of nonrenew- cal proper.,
al of the contract on the other party in advance of the annual renew- a el a cont
of
cancel a
al date of the contract. Unless such notice is served by the owner at c
least 90 days prior to the renewal date or by the legislative body at _ or rehabilitai
least 60 days prior to the renewal date, one year shall automatically - (Added by Sta
be added to the term of the contract.
(b) upon receipt by the owner of a notice from the legislative = § 50285.
body of nonrenewal, the owner may make a written protest of the no- No contr
lice of nonrenewal. The legislative body may, at any time prior to _ legislative bo:
the renewal date, withdraw the notice of nonrene-A-al. = the matter.
(c) If the legislative body or the owner serves notice of intent in address of ea
any year not to renew the contract, the existing contract shall remain be published 1
in effect for the balance of the period remaining since the original ea- (Added by Sta
ecution or the last renewal of the contract, as the case may be. _
(d) The owner shall furnish the legislative body with such infor- § 50286.
mation as the legislative body shall require in order to enable it to If a con*.
determine the eligibility of the property involved. pay a cancel]:
(e) No later than 20 days after a city or county enters into a �T ty at the tim
contract with an owner pursuant to this article, the clerk of the legis- withoutwrega:
314
s
e
Div. 1 P01i'ERS A\D DUTIES—GESERAL § 550286
lative body shall record with the county recorder a copy of the con- 7.
tract, which shall describe the property subject thereto, together with
a reference to the map showing the location of the historic zone in - -
which the property lies. From and after the time of such recordation
such contract shall impart such notice thereof to all persons as is af-
forded by the recording lags of this state. -
(Added by St2ts.1972, c. 14x2, p. 3160, § 1.)
§ 50283. Removal of property from historic zone; equivalency
to notice of nonrenewal; service of notice r- -
The effect of removal of property under contract from.an histor-
ic zone shall be the equivalent of notice of nonrenewal by the city or
county rezoning the property and such city or county shall, at least
60 days prior to the neat renewal date following the rezoning, serve a
notice of nonrenewal as provided in Section 50282.
(Added b5 Stats.1972, c. 1442, p. 3160, § 1.)
§ 50284. Cancellation; grounds
The legislative body may cancel a contract if it determines that
the owner has breached any of the conditions of the contract pro-
vided for in this article or has allowed the property to deteriorate to :
the point that it no longer meets the standards for a qualified histori-
cal property as described by rules and regulations adopted by the De-
partment of Parks and Recreation. The legislative body may also --
cancel a contract if it determines that the owner has failed to restore _
or rehabilitate the property in the manner specified in the contract.
(Added by Stats.1972, c. 1442, p. 3160, § 1.) R. .$
_ r•
§ 50285. Cancellation; notice; hearing =z
No contract shall be canceled under Section 50284 until after the
legislative body has given notice of, and has held, a public hearing on -
the matter. Notice of the hearing shall be mailed to the last known L
address of each owner of property within the historic zone and shall
be published pursuant to Section 6061.
(Added by Stats.1972, c. 1442, p. 3161, § 1.) ;_..
§ 50286. Cancellation; fee; payment sr :2
If a contract is canceled under Section 50254, the owner shall �' s
pay a cancellation fee of 121: percent of the full value of the proper-
ty at the time of cancellation, as determined by the county assessor
without regard to any restriction on such property imposed pursuant
315
s.
�Y'y.�_�•c•_ .. �-aim: �+�.Y��3•�w��••�-��' il.
1
§ 50286 CITIES AND COUNTIES Title 5 Div. 1
to this article. The cancellation fee shall be paid to the Controller, at I § 502f
such time and in such manner as the Controller shall prescribe, and
shall be deposited in the State General Fund.
t, Stats.1972, „ c c o I In ti
(Added _�• c. 1„2, p. 3161, � 1. ?.mended by tats.l..i8, c. under th
1207, p. 3874, § 5, operative Jan. 1, 1981.) - rights,di
Historical Note (Added b;
The 1475 nmendment ch:o:e-•d the csu- 1975 zmendmcnt of t!:is seetiun iaoper•
§ 502Ccollation fee from ;,0 l.ercent of tl,e as- arive unless 14tive Const. Amend. No. 0.
sessed value to 12t2, percen: of the full 1977-75 is approved hr Ile voterc, hecame `
value. operative .tzn. 1. 19;7, as S.C.A. No. 60 L=
Operative date. application to ]9S1—S2 "'s 21jproved at •i,e special statewide
fiscal year and :fiscal .ears thereafter, and elec•rion lieid Nov. 6. 1979, see Historical consult M
legislative intent in postponement of orer• NoO1e under Education Code f 17. Departm
ative date of ;12ts.157S, c. 1207, p• 'S72, matters 1
see Historical Note under Educ.C. ! 11.
(Added b
§ 50287. Action to enforce contract; parties -
As an alternative to cancellation of the contract for breach of Health at
any condition, the county, city, or any landowner may bring any ac- — C`J•S. M
69,
tion in court necessary to enforce a contract including, but not limit- - 66,ed to, an action to enforce the contract by specific performance or in- _
junction. -
(Added by Stats.1972, c. 1442, p. 3161, § 1.)
§ 50288. Acquisition of property by eminent domain; =cella- -
tion of contract; inapplicability to determination of
value —
In the event that property subject to contract under this article -
is acquired in whole or in part by eminent domain or other acouisi-
tion by any entity authorized to exercise the power of eminent do- _
main, and the acquisition is determined by the legislative body to
frustrate the purpose of the contract, such contract shall be canceled =
and no fee shall be imposed under Section 50286. Such contract shall
be deemed null and void for all purposes of determining the value of
the property so acquired.
(Added by Stats.1972, c. 1442, p. 3161, § 1. Amended by Stats.1974, c. 544,
p. 1252, § 19.) -
Historical Note
The 1874 amendment amended the sec-
tion without change.
z
Library References
}
Eminent Domain Ca17, C.J.S.Eminent Domain E C.l.
316
3
t
a..
Div. 1 POWERS AND DUTIES—GENERAL § 50290
§ 550289. Annexation by city of property under contract to coun-
ty; rights and duties of cilh,
In the event that property restricted by a contract with a county
under this article is annexed to a city, the city shall succeed to all
rights,duties, and powers of the county under such contract.
(Added by Stat-c.1972, c. 1442. p. 3161, F 1.)
§ 50290. Consultation tsith state commission and department
Local agencies and owners of qualified historical properties may
consult with the State Historical Pesources Commission and the State
Department of Parks and Recreation for their advice and counsel on
matters relevant to historical property contracts.
(Added by Stats.1977, c. 1040, p. 3152, § 3.)
Y.-
Mrary References L
Health and Ensironment G25.5. SS to 90. 94. 104. 110, 115 to 126, Lz�---
CJ.S. Health and Enrironmeat if 61 to 125, L9, 132, 133, 135, 137 to 140.
66. 69, 71 to 73, 79 to S0. 82 to 86, 142,144 to 153.
ra Z
ac :
t
315 4----
X),
AMENDMENT
HISTORICAL CONTRACTS
§ 50280.1 GOVERNMENT:CODE GOVERNMEN
1 50M.L Qualified historical property which.shall descnl
aW
"Qualified historical property"for purposes of this article,means privately owned property which is not contract ..imp
exempt from property taxation and which meets either of the following: (Amended by Stat
(a) Listed in the National Register of Historic Places or located in a registered historic district; as 150283 Repeal
defined in Section 1.191-2(b) of Title 26 of the Code of Federal Regulations. '
(b) Listed in an state, city, county, y and coup official register of historical or architecturally
1 Cancel'
y ty, ty,or cit countyy
significant sites, places, or landmarks. I . The legislative
(Added by Stats-1985, c. 965, § 2) conditions of the
point that it no for
:. may also cancel :
5 50281. Required provisions of contract j property in the in
Any contract entered into under this article shall contain the following provisions: (Amended by Stat
(a) The term of the contract shall be for a minimum period of 10 years. 1 50290. Consul.
(b) Where applicable,the contract shall provide the following: I Local agencies
(1) For the preservation of the qualified historical property and, when necessary, to restore and Resources C0mrr�
contsaMa
rehabilitate the property to conform to the rules and regulations of the Office of Historic Preservation of
the Department of Parks and Recreation the United States Secretary of the Interior's Standards for (Amended by Stat
Rehabilitation, and the State Historical Building Code.
(2) For the periodic examinations of the interior and exterior of the premises by the assessor, the
Department of Parks and Recreation, and the State Board of Equalization as may be necessary to
determine the owner's compliance with the contract
(3) For if to be binding upon, and inure to the benefit of, all successors in interest of the owner. A
successor in interest shall have the same rights and obligations under the contract as the original owner
who entered into the contract
(c) The owner or of an owner shall vide written notice of the contract to the Office of Mstoric 1 50330. Donati(
Preservation within
MUM of entering into the contract
(Amended by Sffits.1985, c.965, § 3; Stats.1993, c.831 (S.B.221), § 1, eff. Oct 6, 1993.) Whether govern
of the University
board of a commu
1 5028L1. Contract fee gra . • • st:
the case may be.
The legislative body entering into a contract described in this article may require that the property acquisition of a sit
owner, as a condition to entering into the contract, pay a fee not to exceed the reasonable cost of (Amended by Stat
this program
(Added by Stats.1985, e.965, § 4.) 1 50330.4. Gift o
rew
1 50282. Renewal; nonrenewal; notice; protest; recordation; effect For the purpose
• (a) Ea&contract shall vide that on the anniversarydate of the contract or such other annual date gift and make downpa�
as is specified in the contr acti a year shall be added automatically to the initial term of the contract unless 'f fordevelo t larxi, n
notice of nonrenewal is given as provided in this section. If the property owner or the legislative body agency if the state
desires in any year not to renew the contract,that party shall serve written notice of nonrenewal of the j the local agency a
contract on the other party in advance of the annual renewal date of the contract Unless the notice is expenditure of any
served by the owner at least 90 days prior to the renewal date or by the legislative body at least 60 days land unless the L-
prior to the renewal date, one year shall automatically be added to the term of the contract specific purpose
(b) Upon receipt by the owner of a notice from the legislative body of nonrenewal, the owner may (Amended by Stat
make a written protest of the notice of nonrenewal. The legislative body may,at any time prior to the
renewal date,withdraw the notice of nonrenewal
(c) If the legislative body or the owner serves notice of intent in any year not to renew the contract,
the existing contract shall remain in effect for the balance of the period remaining since the original
execution or the last renewal of the contract, as the cave may be. 1 50402 Fees
(d) The owner shall furnish the legislative body with aal information • • the legislative body shall (a) A city, count
require in order to enable it to determine the eligibility of the property involved. amusement ec
(e) No later than 20 days after a city or county enters into a contract with an owner pursuant to this the amount q
exceeds the wt n
article, the clerk of the legislative body shall record with the county recorder a copy of the contract, c
unpo�se y�ei
Additions or changes Indicated by underline; deletions by asterisks • • Additio
28
ll�lll �II!III!II III llllm',ii!'i�ii,.
I,it ►► ►,I �,I I,II!i llja,il: cry o sAn
lois oaspo
I Illi.��� I►III illi.''► II..II
liil: I"li I' IL:'
Illi t�
990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403-8100
January 4, 1995
Dick Frank, County Assessor
Room 100, County Courthouse
San Luis Obispo, CA 93408
Subject: Historical Property Tax Incentive Program
Dear Mr. Frank:
The City Council has adopted Resolution No. , establishing a historic property tax incentive
program. Please consider this as a formal request to establish special procedures for taxing
enforceably restricted historical properties, following State law. It is my understanding that at
present the County of San Luis Obispo does not have such a program in place. As you know,
Article 1.9 of the California Revenue and Taxation Code provides for different assessment rates
for "restricted historical property." Restricted historical property means a qualified historical
property as defined in Government Code Section 50280.1 which is subject to a historical
property contract.
Historic preservation is one of the key program areas of the City's General Plan. There are
approximately 170 properties within the City of San Luis Obispo which have been designated
by the City Council as historically significant — less than one percent of the taxable properties
in the City -- and are listed in the "Master List of Historic Resources." The City's Historic
Preservation Program identifies potential tax benefits as an incentive for property owners of
historically significant buildings to participate in the program. —
There are no historical properties in the City of San Luis Obispo which are "under contract" at
this time; however, it is possible that some property owners would be interested in such a
program if they were aware of the possible tax benefits. This, in turn, would help preserve
some of the City's most important historic properties for future generations.
The City intends to update its Historic Preservation Program Guidelines this Spring, including
specific tax incentive program procedures. City staff hopes to work closely with you in the
interim to facilitate the new assessment program. Please advise the City's Community
Development Director, Arnold Jonas, on how City staff may assist you in implementing this
important community program.
Sincerely,
Mayor Allen Settle
cc: John Dunn, City Administrative Officer; Arnold Jonas, Community Development Director; Robert Hendrix,
County Administrative Officer.
The City of San Luis Obispo is committed to including the disabled In all of its services,programs and activities.
Telecommunications Device for the Deaf(805)781-7410. t1�9