HomeMy WebLinkAbout09-16-2014 C3 Mills Act request 774 Marsh
September 16, 2014
C3
FROM: Derek Johnson, Community Development Director
Prepared By: Walter Oetzell, Assistant Planner
SUBJECT: REVIEW OF A MILLS ACT CONTRACT FOR THE SNYDER BUILDING
AT 774 MARSH STREET
(APPLICATION CHCMA 88-14)
RECOMMENDATION
Adopt a resolution (Attachment 8), entering into a Mills Act Historic Preservation Contract with
the owner of the Synder Building at 774 Marsh Street, under the terms described in the contract.
SITE DATA
Applicant Matt Quaglino
Zoning Downtown Commercial (C-D)
Historical Preservation (H)
General Plan General Retail
Site Area 2,400 sq. ft.
Site Description The site is developed with a
mixed-use building containing 3
office suites and 4 apartment
dwellings.
Historic District Downtown Historic District
BACKGROUND
The applicant, Matt Quaglino has submitted an application to enter into a Mills Act contract with
the City for the improvement and preservation of the Snyder Building (774 Marsh Street), a
Master List Resource in the City’s Inventory of Historic Resources, in exchange for property tax
relief.
The Snyder Building
The Snyder Building is located on a rectangular 2,400 square foot parcel at the northeast corner
of Marsh and Garden Streets, and occupies the entire parcel. There is 60 feet of street frontage
along Marsh and 40 feet along Garden. The site is within the Downtown Commercial (C-D)
Zone and within the Downtown Historic District. The applicant has provided a description of the
subject building (Attachment 2) with details about its historical background and current
C3 - 1
Mills Act Historic Preservation Contract for the Snyder Building
(CHCMA 88-14: 774 Marsh St) Page 2
condition. The building is a two-story
commercial building in a Mission Revival style,
constructed in 1922 by Dr. G. A. Snyder, a
dentist. Originally, three office suites and a
residential apartment occupied the ground floor,
and three apartments were on the upper floor.
Dr. Fred Mugler, a prominent orthopedic
surgeon and founder of a nursing school at the
San Luis Sanitarium, was an early and notable
occupant of the building.
Mills Act Property Tax Abatement Program
The Mills Act Property Tax Abatement Program
enables California cities to enter into contracts
with owners of historical property to provide
them with tax relief in exchange for an agreement to actively participate in the restoration and
maintenance of historical resources. A Mills Act contract is effective for an initial 10-year
period, and then is automatically extended annually for an additional year. After the initial term,
either the City or the owner may, by written notice, decide not to renew the contract. During the
effective term of the contract, the property owner must improve or rehabilitate the property,
maintain the property consistent with the Secretary of the Interior’s Standards, and provide
visibility of the historical resource from the public right-of-way.
The Conservation and Open Space Element (COSE) of the General Plan describes the City’s
goals and policies for the protection of cultural resources. It is the City’s policy that significant
historic resources be rehabilitated and preserved (COSE §3.3). Participation in the Mills Act
Program is one of the means by which the City encourages the maintenance and restoration of
historic properties (COSE §3.6.2). Currently there are 50 properties participating in the program,
and this is the only such request being considered so far this year.
Cultural Heritage Committee Recommendation
The Cultural Heritage Committee reviewed the terms of the proposed Mills Act Contract at a
public hearing on July 28, 2014. The Committee, by unanimous vote, recommended that the
Council approve the contract. The staff report and the resolution adopted by the Committee are
attached to this report (Attachments 4 and 5).
DISCUSSION
Proposed Contract
The City and the property owner will enter into a contract that is prepared using standard
language suggested by the California State Parks Office of Historic Preservation (Attachment 7).
At its core is an agreement made by the property owners to “undertake and complete, at their
expense, the preservation, maintenance, and improvements” described in an improvement plan.
Figure 1: The Snyder Building (Marsh St. elevation)
C3 - 2
Mills Act Historic Preservation Contract for the Snyder Building
(CHCMA 88-14: 774 Marsh St) Page 3
Improvement Plan
The intent of the program is to encourage rehabilitation, restoration, and maintenance of
properties that are historic resources, so a property owner participating in the program receives
tax relief that is, in part, dependent upon the cost of planned improvements that are related those
purposes. The applicant has provided an outline of the improvements proposed to be undertaken
(Attachment 3) with an estimate of their costs. These improvements are estimated to cost about
$335,000.
Savings from the tax relief provided under the contract are an incentive to undertake
improvements and maintenance related to the historic character of the property. These
improvements are reviewed for consistency with applicable historical preservation standards and
guidelines through the construction permitting process. The City periodically reviews properties
that are subject to Mills Act Contracts to confirm that preservation efforts are in compliance with
City standards and policies.
Estimated Tax Relief
It is estimated that the property owner may
realize a total tax savings of about $15,830 over
the initial period of the contract (about 5% of the
total cost of the improvements). This estimate
was prepared by comparing the amount of tax
that would normally be collected, using the
current assessed value of the property, to the
amount that might be collected under the terms
of a Mills Act Contract. A summary of the
estimate is provided here, and details about the
assumptions behind the estimate are provided in
Attachment 6. Actual costs and values are
calculated by the County Assessor after the
contract is agreed.
Under a Mills Act Contract, the value of the
property is assessed using a “capitalization of
income” method described in the California
Revenue and Taxation Code. By this method,
the value of the property is determined in large
part by the income that it is anticipated to
generate. This “Restricted Value” may be
significantly lower than the current assessed value of the property, resulting in tax savings to the
property owner. This tax relief is the financial incentive that is to be invested in rehabilitation,
restoration, and maintenance of historic resources. The schedule of proposed improvements is
shown in Attachment 4.
Annual Income and Costs
Effective Gross Income 79,800.00$
Maintenance Costs (19,950.00)$
Net Operating Income 59,850.00$
Valuation
Current Assessed Value 905,412.00$
Restricted Value 747,751.12$
Difference in Valuation 157,660.88$
Tax Relief
Tax Difference (Annually)1,582.92$
Total Tax Relief (Initial Term)15,829.15$
Owner Investment
Total Owner Investment 318,786.85$
Owner Share of Improvements 95%
Fiscal Impact Summary
Table 1: Estimated Tax Relief
C3 - 3
Mills Act Historic Preservation Contract for the Snyder Building
(CHCMA 88-14: 774 Marsh St) Page 4
CONCLUSION
Participation in the Mills Act Program is one of the means by which the City encourages the
maintenance and restoration of historic properties. An estimate of the tax savings that the owner
of the Snyder Building might realize under this contract concludes that the cost of this incentive
is likely to be a small portion of the total investment that the property owner proposes to make in
the rehabilitation, restoration, and maintenance of this building, a Master List Historic Resource.
The modest incentive provided is a reasonable means to further the City’s historical preservation
goals and policies.
FISCAL IMPACT
As discussed in this report, entering into a Mills Act Historic Preservation Contract with the
owner of the Snyder Building may result in reduced property tax revenues. By the estimate
prepared for this report, the property owner may realize a total tax savings of about $15,830 over
the initial 10-year period of the contract. The City typically receives about 15% of the property
tax revenue collected by the County Assessor. Under that assumption, the fiscal impact of
entering into this contract is about $ 2,375 for the initial 10-year period of the contract.
ALTERNATIVES
1. Continue review of this request to a future date for additional analysis or research; or
2. Do not enter into a Mills Act Historic Preservation Contract with the property owner. This
alternative is not recommended. The contract provides a tax relief incentive that is a tool for
achieving the City’s goals for historical preservation.
ATTACHMENTS
1. Vicinity Map
2. Description of the Snyder Building
3. List of Proposed Improvements
4. Cultural Heritage Committee Agenda Report (July 28, 2014)
5. Cultural Heritage Committee Resolution (Adopted July 28, 2014)
6. Fiscal Impact Estimate Assumptions
7. Draft Contract
8. Draft City Council Resolution
T:\Council Agenda Reports\2014\2014-09-16\Mills Act request 774 Marsh (Johnson-Oetzell)\CouncilAgendaReport.docx
C3 - 4
O
O
C-D
C-D
C-D-H C-D-H
O
C-D C-D
C-D-H
O
C-D
C-D
PF-H
C-D-H C-D-H
O
C-D
C-D-H
C-D-H
O
C-D-S-H
O-H
MARSH
G
A
R
D
E
N
B
R
O
A
D
PACIF
I
C
C
H
O
R
R
O
HIGUE
R
A
VICINITY MAP File No. 88-14774 Marsh St.¯
ATTACHMENT 1
C3 - 5
ATTACHMENT 2
C3 - 6
C3 - 7
May 1, 2014
To: Phil Dunsmore, City of San Luis Obispo, Planning Department
From: Matt Quaglino
Re: Proposed list of Mills Act Improvements for 774 Marsh Street
1. Replace windows with period appropriate window styles. $46,900
2. Repair and Paint the exterior of the building. $34,800
3. Replace the roof system. $19,000
4. Repair and paint all interior walls. $22,300
5. Replace existing carpet in the common lobbies with a period appropriate flooring finish. $6,500
6. Paint all interior walls and wood work. (See 4 above)
7. Repair or replace kitchen cabinets as necessary. $21,374
8. Repair electrical and mechanical as required. $58,700
9. Re-install the ground floor residential unit that had been converted to commercial. $14,500
10. Replace modern lighting fixtures with period appropriate fixtures. $8,400
11. Install tile at kitchens and bathrooms to replace missing or damaged tile. $9,700
12. Repair or replace existing heating systems. (See 8 above)
13. Refinish hardwood flooring in residential units. $7,900
14. Install period appropriate window coverings. $6,785
15. Fabricate and install the original trim that surrounded the building Marsh Street entry. $6,507
16. Fabricate and install the detail that was located on the lower side of the small balcony over the
entry door. (See 15 above)
17. Remove the rear wood stairs and expose the original windows. 6,300
18. Install an ADA compliant restroom on the ground floor to serve the commercial uses. $10,300
19. Install code compliant handrails at the entry stairs. $4,200
20. Rework existing fire sprinkler system to minimize the impact of the exposed piping. $5,850
21. Install tile over entry door: $1,800
22. Install flooring in commercial offices: $14,800
23. Miscellaneous and contingency: $28,000
Total: $334,616.00
ATTACHMENT 3
C3 - 8
Meeting Date: June 28, 2014
Item Number: 2
CULTURAL HERITAGE COMMITTEE AGENDA REPORT
SUBJECT: Review of a draft Mills Act contract for the Snyder Building
ADDRESS: 774 Marsh St BY: Walter Oetzell, Assistant Planner
FILE NUMBER: CHCMA 88-14 FROM: Phil Dunsmore, Senior Planner
SUMMARY RECOMMENDATION
Adopt the Cultural Heritage Committee
Resolution (Attachment 2) recommending that
the City Council enter into a Mills Act Historic
Preservation contract for the Snyder Building
(774 Marsh Street), under the terms described in
the draft contract (Attachment 3).
BACKGROUND
The applicant, Matt Quaglino has submitted an
application to enter into a Mills Act contract with
the City for the improvement and preservation of
the Snyder Building (774 Marsh Street), in
exchange for property tax relief. The Snyder
Building is a Master List Resource in the Cit’s
Inventory of Historic Resources. The Committee
shall review the draft terms of the contract and
provide a recommendation to the City Council.
DISCUSSION
Cultural Heritage Goals
The Conservation and Open Space Element (COSE) of the General Plan describes the City’s
goals and policies for the protection of cultural resources. It is the City’s policy that significant
historic resources be rehabilitated and preserved (COSE §3.3). Participation in the Mills Act
Program is one of the means by which the City encourages the maintenance and restoration of
historic properties (COSE §3.6.2).
The Snyder Building
The applicant has provided a description of the subject building with details about its historical
background and current condition. It is located on a rectangular 2,400 square foot parcel at the
northeast corner of Marsh and Garden Streets, and occupies the entire parcel. There is 60 feet of
street frontage along Marsh and 40 feet along Garden. The site is within the Downtown
Commercial (C-D) Zone, a Historic Preservation (H) Zone, and within the Downtown Historic
District.
CHC2 - 1
ATTACHMENT 4
C3 - 9
CHCMA 88-14 (774 Marsh St)
Page 2
The building is a two-story commercial building in a Mission Revival style, constructed in 1922
by Dr. G. A. Snyder, a dentist. Originally, 3 office suites and a residential apartment occupied
the ground floor, and three apartments were on the upper floor. Dr. Fred Mugler, a prominent
orthopedic surgeon and founder of a nursing school at the San Luis Sanitarium, was an early and
notable occupant of the building.
Also of note is the “Sawyer style” of construction
used to build this structure. As discussed in the
applicant’s building description (Attachment 4),
this was an innovative method of construction,
patented by Frank M. Sawyer, a Los Angeles
architect. The method involved the use of pre-cast
concrete slabs spaced to form insulating spaces
between the slabs, in which steel rebar was placed
and grouted, forming a lightweight, structurally
sound assembly.
Mills Act Property Tax Abatement Program
The Mills Act Property Tax Abatement Program enables California cities to enter into contracts
with owners of historical property to provide them with tax relief in exchange for an agreement
to actively participate in the restoration and maintenance of historical resources. A Mills Act
contract is effective for an initial 10 year period, and then is automatically extended annually for
an additional year. After the initial term, either the City or the owner may, by written notice,
decide not to renew the contract. During the effective term of the contract, the property owner
must improve or rehabilitate the property, maintain the property consistent with the Secretary of
the Interior’s Standards, and provide visibility of the historical resource from the public right-of-
way.
EVALUATION
Contract: The City and the property owner will enter into a contract that is prepared using
standard language suggested by the California State Parks Office of Historic Preservation
(Attachment 3). At its core is an agreement made by the property owners to “undertake an d
complete, at their expense, the preservation, maintenance, and improvements” described in an
improvement plan.
Improvement Plan: The intent of the program is to encourage rehabilitation, restoration, and
maintenance of properties that are historic resources, so a property owner participating in the
program receives tax relief that is, in part, dependent upon the cost of planned improvements that
are related those purposes. The applicant has provided an outline of the improvements proposed
to be undertaken (Attachment 5) with an estimate of their costs. These improvements are
estimated to cost about $335,000.
Savings from the tax relief provided under the contract are an incentive to undertake
improvements and maintenance related to the historic character of the property. These
CHC2 - 2C3 - 10
CHCMA 88-14 (774 Marsh St)
Page 3
improvements are reviewed for consistency with applicable historical preservation standards and
guidelines through the construction permitting process. The City periodically reviews properties
that are subject to Mills Act Contracts to confirm that preservation efforts are in compliance with
City standards and policies.
Fiscal Impact: The tax relief provided to the property owner is a financial incentive that is to be
invested in rehabilitation, restoration, and maintenance of historic resources. As such, the amount
of tax relief should not exceed the cost of planned improvements. Once the subject property
enters into a Mills Act contract, the value of the property is assessed by a “capitalization of
income” method, in a manner described in the California Revenue and Taxation Code. Under
this method, a property’s value is determined in large part by the income that it is anticipated to
generate. The resulting assessed value can result in considerable tax savings to the property
owner.
A rough estimate has been prepared comparing
the amount of tax that would be collected under
this method to the amount that would normally be
expected using the current assessed value of the
property. The difference between the two
represents an estimate of tax savings that the
property owner might expect through
participation in the Mills Act Program. This
savings should be comparable to the cost of the
planned improvements. Tax savings in excess of
improvement costs would indicate forfeiture of
tax revenue by the City without a corresponding
benefit to historic preservation efforts. A
summary of the estimate is provided here, and
details about the assumptions behind this estimate
are provided in Attachment 6.
The estimate indicates that the owner may realize
a total tax savings of about $15,830 over the
initial period of the contract, which is about 5%
of the total cost of the improvements. It is based
on the property’s current value, as most recently assessed by the San Luis Obispo County
Assessor. Actual costs and values are calculated after the contract is agreed.
ENVIRONMENTAL REVIEW
Entering into a Mills Act contract with a property owner is exempt from the provisions of the
California Environmental Quality Act (CEQA), as it is not a project as defined by §15378 of the
CEQA Guidelines. The contract provides tax relief for historical preservation efforts, but does
not involve approval or commitment to any specific project that may result in a potentially
significant physical impact on the environment.
Annual Income and Costs
Effective Gross Income 79,800.00$
Maintenance Costs (19,950.00)$
Net Operating Income59,850.00$
Valuation
Current Assessed Value 905,412.00$
Restricted Value 747,751.12$
Difference in Valuation157,660.88$
Tax Relief
Tax Difference (Annually)1,582.92$
Total Tax Relief (Initial Term)15,829.15$
Owner Investment
Total Owner Investment 318,786.85$
Owner Share of Improvements 95%
Fiscal Impact Summary
CHC2 - 3C3 - 11
CHCMA 88-14 (774 Marsh St)
Page 4
RECOMMENDATION
Adopt the draft Cultural Heritage Committee Resolution (Attachment 2) recommending that the
City Council enter into a Mills Act Historic Preservation contract with the owner of the property
at 774 Marsh Street, under the terms described in the draft contract (Attachment 3).
ALTERNATIVES
1. Find that the fiscal impact of providing tax relief to the property owner exceeds the benefit of
the historical preservation efforts likely to be undertaken on the property, and recommend
that the City Council does not enter into a Mills Act Contract with the property owner.
2. Review the improvement plan and fiscal impact estimate and continue consideration of the
application to a future date to allow time to collect additional information that may help in
forming a recommendation to the City Council regarding participation of this property in the
Mills Act Property Tax Abatement Program.
ATTACHMENTS
1. Vicinity Map
2. Draft Resolution
3. Draft Mills Act Contract
4. Building Description
5. Improvement Plan
6. Fiscal Impact Assumptions
CHC2 - 4C3 - 12
RESOLUTION NO. XXXX-14
A RESOLUTION OF THE SAN LUIS OBISPO CULTURAL HERITAGE COMMITTEE,
RECOMMENDING THE CITY COUNCIL APPROVE A HISTORIC PROPERTY
PRESERVATION AGREEMENT FOR THE MASTER LIST SNYDER BUILDING
LOCATED AT 774 MARSH STREET
WHEREAS, the City Council has adopted Resolution No. 9136 (2000 Series),
establishing the Mills Act Historic Property Tax Incentive Program as an on-going historic
preservation program to promote the preservation, maintenance and rehabilitation of historic
resources through financial incentives; and
WHEREAS, the City Council of the City of San Luis Obispo has designated this property
as a historic resource of the City of San Luis Obispo pursuant to the policies in the City’s
Historic Preservation Program Guidelines; and
WHEREAS, the City and owners, for their mutual benefit, now desire to enter into this
agreement to limit the use of the property to prevent inappropriate alterations and to ensure that
character-defining features are preserved and maintained in an exemplary manner, and repairs
and/or improvements are completed as necessary to carry out the purposes of California
Government Code, Chapter 1, Part 5 of Division 1 of Title 5, Article 12, Sec. 50280 et seq., and
to qualify for an assessment of valuation pursuant to Article 1.9, Sec. 439 et. seq. of the Revenue
and Taxation Code.
WHEREAS, the Cultural Heritage Committee has duly considered all evidence, including
the testimony of the applicant, interested parties, and the evaluation and recommendations by
staff, presented at said hearing.
BE IT RESOLVED, by the Cultural Heritage Committee of the City of San Luis Obispo
as follows:
Section 1. Findings.
1. Conservation and Open Space Element program 3.6.2 indicates the City will participate
in financial assistance programs such as property tax reduction programs that encourage
maintenance and restoration of historic properties.
2. The Snyder Building, located at 774 Marsh Street, has been recognized as a historic asset
in the community by its designation as a Master List Historic Property. As such,
maintaining the structure will meet the City’s goals for historic preservation listed in
policies 3.3.1 through 3.3.5 of the Conservation and Open Space Element.
Section 2. Environmental Review. The above actions do not constitute a project, as
defined by Section 15378 of the California Environmental Quality Act and are exempt from
environmental review.
ATTACHMENT 5
C3 - 13
Resolution No.XXXX-14
774 Marsh St
Page 2
Section 3. Action. The Committee hereby recommends approval of application CHCMA
88-14, allowing the City to enter into a Mills Act Historic Preservation Agreement.
On motion by Committee member, , seconded by Committee member, , and on the
following roll call vote:
AYES:
NOES:
REFRAIN:
ABSENT:
The foregoing resolution was passed and adopted this 28th day of July, 2014.
_____________________________
Phil Dunsmore, Secretary
Cultural Heritage Committee
C3 - 14
CHCMA 88-14 (774 Marsh St)
July 28, 2014
Fiscal Impact Assumptions
Planned Improvements $ 334,616.00
Monthly Income and Losses
Monthly Rent
$
7,000.00
Vacancy, Collection, Loss Rate 5%
Vacancy, Collection, Loss
$
(350.00)
Effective Gross Income (Monthly)
$
6,650.00
Monthly Maintenance Costs
Maintenance Cost Factor 25% (a)
Operations, Insurance, & General Maintenance
$
1,662.50 (b)
Total Monthly Maintenance Costs
$
1,662.50
(a) as portion of Effective Gross Income
(b) Effective Gross Income * Maintenance Cost Factor
Capitalization Rate Components
Interest Rate 4.000% (c)
Risk Rate 2.000% (c)
Property Tax Rate 1.004% (d)
Amortization Rate 1.000% (e)
Total Capitalization Rate 8.004%
(c) Statutory
(d) Actual
(e) 50 yr remaining life; 50:50 ratio of property:improvement value
ATTACHMENT 6
C3 - 15
HISTORIC PROPERTY PRESERVATION AGREEMENT BETWEEN
THE CITY OF SAN LUIS OBISPO AND THE OWNER OF THE HISTORIC BUILDING
LOCATED AT 774 MARSH STREET, IN THE CITY AND COUNTY OF SAN LUIS
OBISPO, STATE OF CALIFORNIA.
THIS AGREEMENT is made and entered into this ________ day of ________ , 2014, by and
between the City of San Luis Obispo, a municipal corporation (hereinafter referred to as the
“City”), and Matthew Quaglino (hereinafter referred to as “Owner”), and collectively referred to
as the “parties.”
Section 1. Description of Preservation Measures. The Owner, their heirs, or assigns hereby
agree to undertake and complete, at their expense, the preservation, maintenance, and
improvements measures described in “Exhibit A” attached hereto.
Section 2. Effective Date and Term of Agreement. This agreement shall be effective and
commence upon recordation and shall remain in effect for an initial term of ten (10) years
thereafter. Each year upon the anniversary of the agreement’s effective date, such initial term
will automatically be extended as provided in California Government Code Section 50280
through 50290 and in Section 3, below.
Section 3. Agreement Renewal and Non-renewal.
a. Each year on the anniversary of the effective date of this agreement (hereinafter
referred to as “annual renewal date”), a year shall automatically be added to the
initial term of this agreement unless written notice of nonrenewal is served as
provided herein.
b. If the Owner or the City desires in any year not to renew the agreement, the
Owner or the City shall serve written notice of nonrenewal of the agreement on
the other party. Unless such notice is served by the Owner to the City at least
ninety (90) days prior to the annual renewal date, or served by the City to the
Owner at least sixty (60) days prior to the annual renewal date, one (1) year shall
automatically be added to the term of the agreement as provided herein.
c. The Owner may make a written protest of the notice. The City may, at any time
prior to the annual renewal date, withdraw its notice to the Owner of nonrenewal.
d. If either the City or the Owner serves notice to the other party of nonrenewal in
any year, the agreement shall remain in effect for the balance of the term then
remaining.
Section 4. Standards and Conditions. During the term of this agreement, the historic property
shall be subject to the following conditions:
a. Owner agrees to preserve, maintain, and, where necessary, restore or rehabilitate
the building and its character-defining features, including: the building’s general
ATTACHMENT 7
C3 - 16
Historic Preservation Agreement
774 Marsh Street
Page 2
architectural form, style, materials, design, scale, proportions, organization of
windows, doors, and other openings; interior architectural elements that are
integral to the building’s historic character or significance; exterior materials,
coatings, textures, details, mass, roof line, porch, and other aspects of the
appearance of the building’s exterior, as described in Exhibit A, to the satisfaction
of the Community Development Director or his designee.
b. The building’s interior closely relates to the property’s eligibility as a qualified
historic property. The Owner agrees to allow pre-arranged tours on a limited
basis, to the approval of the Community Development Director or his designee.
c. All building changes shall comply with applicable City specific plans, City
regulations and guidelines, and conform to the rules and regulations of the Office
of Historic Preservation of the California Department of Parks and Recreation,
namely the U.S. Secretary of the Interior’s Standards for Rehabilitation and
Standards and Guidelines for Historic Preservation Projects. Interior remodeling
shall retain original, character-defining architectural features such as oak and
mahogany details, pillars and arches, special tile work, or architectural
ornamentation to the greatest extent possible.
d. The Community Development Director shall be notified by the Owner of changes
to character-defining exterior features prior to their execution, such as major
landscaping projects and tree removals, exterior door or window replacement,
repainting, remodeling, or other exterior alterations requiring a building permit.
The Owner agrees to secure all necessary City approvals and/or permits prior to
changing the building’s use or commencing construction work.
e. Owner agrees that property tax savings resulting from this agreement shall be
used for property maintenance and improvements as described in Exhibit A.
f. The following are prohibited: demolition or partial demolition of the historic
building; exterior alterations or additions not in keeping with the standards listed
above; dilapidated, deteriorating, or unrepaired structures such as fences, roofs,
doors, walls, windows; outdoor storage of junk, trash, debris, appliances, or
furniture visible from a public way; or any device, decoration, structure, or
vegetation which is unsightly due to lack of maintenance or because such feature
adversely affects, or is visually incompatible with, the property’s recognized
historic character, significance, and design as determined by the Community
Development Director.
g. Owner shall allow reasonable periodic examination, by prior appointment, of the
interior and exterior of the historic property by representatives of the County
Assessor, the State Department of Parks and Recreation, the State Board of
Equalization, and the City as may be necessary to determine the owners’
compliance with the terms and provisions of this agreement.
C3 - 17
Historic Preservation Agreement
774 Marsh Street
Page 3
Section 5. Furnishing of Information. The Owner hereby agrees to furnish any and all
information requested by the City which may be necessary or advisable to determine compliance
with the terms and provisions of this agreement.
Section 6. Cancellation.
a. The City, following a duly-noticed public hearing by the City Council as set forth
in Government Code Section 50285, may cancel this agreement if it determines
that the Owner has breached any of the conditions of this agreement or has
allowed the property to deteriorate to the point that it no longer meets the
standards for a qualified historic property; or if the City determines that the
Owner has failed to preserve, maintain, or rehabilitate the property in the manner
specified in Section 4 of this agreement. If a contract is cancelled because of
failure of the Owner to preserve, maintain, and rehabilitate the historic property as
specified above, the Owner shall pay a cancellation fee to the State Controller as
set forth in Government Code Section 50286, which states that the fee shall be 12
½% of the full value of the property at the time of cancellation without regard to
any restriction imposed with this agreement.
b. If the historic building is acquired by eminent domain and the City Council
determines that the acquisition frustrates the purpose of the agreement, the
agreement shall be cancelled and no fee imposed, as specified in Government
Code Section 50288.
Section 7. Enforcement of Agreement.
a. In lieu of and/or in addition to any provisions to cancel the agreement as
referenced herein, the City may specifically enforce, or enjoin the breach of, the
terms of the agreement. In the event of a default, under the provisions to cancel
the agreement by the Owner, the City shall give written notice of violation to the
Owner by registered or certified mail addressed to the address stated in this
agreement. If such a violation is not corrected to the reasonable satisfaction of the
Community Development Director or designee within thirty (30) days thereafter;
or if not corrected within such a reasonable time as may be required to cure the
breach or default of said breach; or if the default cannot be cured within thirty
(30) days (provided that acts to cure the breach or default may be commenced
within thirty (30) days and shall thereafter be diligently pursued to completion by
the Owner); then the City may, without further notice, declare a default under the
terms of this agreement and may bring any action necessary to specifically
enforce the obligations of the Owner growing out of the terms of this agreement,
apply to any court, state or federal, for injunctive relief against any violation by
the owners or apply for such relief as may be appropriate.
b. The City does not waive any claim of default by the Owner if the City does not
enforce or cancel this agreement. All other remedies at law or in equity which are
not otherwise provided for in this agreement or in the City’s regulations
C3 - 18
Historic Preservation Agreement
774 Marsh Street
Page 4
governing historic properties are available to the City to pursue in the event that
there is a breach or default under this agreement. No waiver by the City of any
breach or default under this agreement shall be deemed to be a waiver of any
other subsequent breach thereof or default herein under.
c. By mutual agreement, City and Owner may enter into mediation or binding
arbitration to resolve disputes or grievances growing out of this contract.
Section 8. Binding Effect of Agreement. The Owner hereby subjects the historic building
located at 774 Marsh Street, San Luis Obispo, California, Assessors Parcel Number 002-426-
008, to the covenants, reservations, and restrictions as set forth in this agreement. The City and
Owner hereby declare their specific intent that the covenants, reservations, and restrictions as set
forth herein shall be deemed covenants running with the land and shall pass to and be binding
upon the Owner’s successors and assigns in title or interest to the historic property. Every
contract, deed, or other instrument hereinafter executed, covering or conveying the historic
property or any portion thereof, shall conclusively be held to have been executed, delivered, and
accepted subject to the covenants, reservations, and restrictions expressed in this agreement
regardless of whether such covenants, restrictions, and reservations are set forth in such contract,
deed, or other instrument.
Section 9. Notice. Any notice required by the terms of this agreement shall be sent to the
address of the respective parties as specified below or at other addresses that may be later
specified by the parties hereto.
To City: Community Development Director
City of San Luis Obispo
919 Palm Street
San Luis Obispo, CA 93401
To Owner: Matthew Quaglino
643 Grove Street
San Luis Obispo, CA 93401
Section 10. General Provisions.
a. None of the terms, provisions, or conditions of this agreement shall be deemed to
create a partnership between the parties hereto and any of their heirs, successors,
or assigns, nor shall such terms, provisions, or conditions cause them to be
considered joint ventures or members of any joint enterprise.
b. The Owner agrees to hold the City and its elected and appointed officials,
officers, agents, and employees harmless from liability for damage or from claims
for damage for personal injuries, including death, and claims for property damage
which may arise from the direct or indirect use or activities of the Owner, or from
those of their contractor, subcontractor, agent, employee, or other person acting
C3 - 19
Historic Preservation Agreement
774 Marsh Street
Page 5
on the Owner’s behalf which relates to the use, operation, maintenance, or
improvement of the historic property. The Owner hereby agrees to and shall
defend the City and its elected and appointed officials, officers, agents, and
employees with respect to any and all claims or actions for damages caused by, or
alleged to have been caused by, reason of the Owner’s activities in connection
with the historic property, excepting however any such claims or actions which
are the result of the sole negligence or willful misconduct of City, its officers,
agents, or employees.
c. This hold harmless provision applies to all damages and claims for damages
suffered, or alleged to have been suffered, and costs of defense incurred, by
reason of the operations referred to in this agreement regardless of whether or not
the City prepared, supplied, or approved the plans, specifications, or other
documents for the historic property.
d. All of the agreements, rights, covenants, reservations, and restrictions contained
in this agreement shall be binding upon and shall inure to the benefit of the parties
herein, their heirs, successors, legal representatives, assigns, and all persons
acquiring any part or portion of the historic property, whether by operation of law
or in any manner whatsoever.
e. In the event legal proceedings are brought by any party or parties to enforce or
restrain a violation of any of the covenants, reservations, or restrictions contained
herein, or to determine the rights and duties of any party hereunder, the prevailing
party in such proceeding may recover all reasonable attorney’s fees to be fixed by
the court, in addition to court costs and other relief ordered by the court.
f. In the event that any of the provisions of this agreement are held to be
unenforceable or invalid by any court of competent jurisdiction, or by subsequent
preemptive legislation, the validity and enforceability of the remaining provisions,
or portions thereof, shall not be affected thereby.
g. This agreement shall be construed and governed in accordance with the laws of
the State of California.
Section 11. Amendments. This agreement may be amended, in whole or in part, only by a
written recorded instrument executed by the parties hereto.
Section 12. Recordation and Fees. No later than twenty (20) days after the parties enter into
this agreement, the City shall cause this agreement to be recorded in the office of the County
Recorder of the County of San Luis Obispo. Participation in the program shall be at no cost to
the Owner; however the City may charge reasonable and necessary fees to recover direct costs of
executing, recording, and administering the historical property contracts.
IN WITNESS WHEREOF, the City and Owner have executed this agreement on the day
and year written above.
C3 - 20
Historic Preservation Agreement
774 Marsh Street
Page 6
OWNER
____________________________________ ______________________________
Matthew Quaglino Date
CITY OF SAN LUIS OBISPO
____________________________________ ______________________________
Mayor Jan Marx Date
ATTEST:
______________________________
Anthony Mejia, City Clerk
APPROVED AS TO FORM:
______________________________
Christine Dietrick, City Attorney
ALL SIGNATURES MUST BE NOTARIZED
C3 - 21
Historic Preservation Agreement
774 Marsh Street
Page 7
EXHIBIT A
MAINTENANCE AND IMPROVEMENT MEASURES FOR THE SNYDER BUILDING
LOCATED AT 774 MARSH STREET, SAN LUIS OBISPO, CALIFORNIA
1. Owner shall preserve, maintain, and repair the historic building, including its
character-defining architectural features in good condition, to the satisfaction of the
Community Development Director or designee, pursuant to a Mills Act Preservation
Contract with the City of San Luis Obispo for property located at 774 Marsh Street.
Character-defining features shall include, but are not limited to: roof, eaves, dormers,
trim, porches, walls and siding, architectural detailing, doors and windows, window
screens and shutters, balustrades and railings, foundations, and surface treatments.
2. Owner agrees to make the following improvements and/or repairs during the term of
this contract but in no case later than ten (10) years from the contract date. All changes
or repairs shall be consistent with the City’s Historic Preservation Ordinance and the
Secretary of the Interior’s Standards for the Treatment of Historic Properties:
Replace windows with period appropriate window styles
Repair and Paint the exterior of the building
Replace the roof system
Repair and paint all interior walls
Replace existing carpet in the common lobbies with a period appropriate flooring finish
Paint all interior walls and wood work
Repair or replace kitchen cabinets as necessary
Repair electrical and mechanical as required
Re-install the ground floor residential unit that had been converted to commercial
Replace modern lighting fixtures with period appropriate fixtures
Install tile at kitchens and bathrooms to replace missing or damaged tile
Repair or replace existing heating systems
Refinish hardwood flooring in residential units
Install period appropriate window coverings
Fabricate and install the original trim that surrounded the building Marsh Street entry
Fabricate and install the detail that was located on the lower side of the small balcony
over the entry door
Remove the rear wood stairs and expose the original windows
Install an ADA compliant restroom on the ground floor to serve the commercial uses
Install code compliant handrails at the entry stairs
Rework existing fire sprinkler system to minimize the impact of the exposed piping
Install tile over entry door
Install flooring in commercial offices
C3 - 22
Historic Preservation Agreement
774 Marsh Street
Page 8
OWNER
____________________________________ ______________________________
Matthew Quaglino Date
C3 - 23
Historic Preservation Agreement
774 Marsh Street
Page 9
State of California }
County of San Luis Obispo }
On ________________, before me _________________________________________ ,
Date Name and Title of the Officer
personally appeared, ____________________________________________________ ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature _____________________________ Signature of Notary Public Place Notary Seal Above
State of California }
County of San Luis Obispo }
On________________, before me,__________________________________________,
Date Name and Title of the Officer
personally appeared, _____________________________________________________,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature _____________________________ Signature of Notary Public Place Notary Seal Above
C3 - 24
RESOLUTION NO. _____ (2014 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING AN HISTORIC PROPERTY PRESERVATION AGREEMENT
BETWEEN THE CITY OF SAN LUIS OBISPO AND OWNERS OF THE SNYDER
BUILDING AT 774 MARSH STREET (CHCMA 88-14)
WHEREAS, the City Council of the City of San Luis Obispo is authorized by California
Government Code Section 50280 et seq. (known as "the Mills Act") to enter into contracts with the
owners of qualified historical properties to provide for appropriate use, maintenance, and
rehabilitation such that these historic properties retain their historic characteristics; and
WHEREAS, the City Council has adopted Resolution No . 9136 (2000 Series),
establishing the Mills Act Historic Property Tax Incentive Program as an on-going historic
preservation program to promote the preservation, maintenance and rehabilitation of historic
resources through financial incentives; and
WHEREAS, the owners possess fee title in and to that certain qualified real property,
together with associated structures and improvements thereon, located on Assessor's Parcel
Number 002-426-008, located at 774 Marsh Street, San Luis Obispo, California 93401, also
described as the Snyder Building, (hereinafter referred to as the "historic property") ; and
WHEREAS, the City Council of the City of San Luis Obispo has designated this
property as a historic resource of the City of San Luis Obispo pursuant to the policies in the
City's Historic Preservation Ordinance ; and
WHEREAS, the City and owners, for their mutual benefit, now desire to enter into this
agreement to limit the use of the property to prevent inappropriate alterations and to ensure that
character-defining features are preserved and maintained in an exemplary manner, and repairs
and/or improvements are completed as necessary to carry out the purposes of California
Government Code, Chapter 1, Part 5 of Division 1 of Title 5, Article 12, Sec . 50280 et seq., and to
qualify for an assessment of valuation pursuant to Article 1 .9, Sec . 439 et. seq. of the Revenue
and Taxation Code; and
WHEREAS, the Cultural Heritage Committee of the City of San Luis Obispo conducted
a public hearing in the Council Meeting Room of City Hall, 990 Palm Street, San Luis Obispo,
California, on June 23, 2014, and recommended that the Council add the property located at
1152 Buchon Street to the Master List of Historic Resources; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing
in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on
September 16th, 2014, for the purpose of considering the owner’s request to enter into a Historic
Preservation Agreement with the City for rehabilitation, restoration, and maintenance of the
historic property; and
ATTACHMENT 8
C3 - 25
Resolution No. _____ (2014 Series)
Page 2
WHEREAS, the City Council has considered the Cultural Heritage Committee's
recommendation, documentation for the property on file in the Community Development
Department, public testimony, the staff report, and the City's Historical Preservation Ordinance.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Findings. Based upon all the evidence, the City Council makes the
following findings:
1. Conservation and Open Space Element program 3.6.2 indicates the City will participate
in financial assistance programs such as property tax reduction programs that encourage
maintenance and restoration of historic properties.
2. The Snyder Building, located at 774 Marsh Street, has been recognized as a historic asset
in the community by its designation as a Master List Historic Property. As such,
maintaining the structure will meet the City’s goals for historic preservation listed in
policies 3.3.1 through 3.3.5 of the Conservation and Open Space Element.
SECTION 2. Historic Preservation Agreement Approved . The City Council hereby
approves the "Historic Preservation Agreement Between the City of San Luis Obispo and the
Owner of the Historic Property Located at 774 Marsh Street", and entered into between the City
and owner, Matthew Quaglino.
SECTION 3. Mayor Authorized to Sign Agreement for City. The City Council hereby
authorizes the Mayor to execute said agreement on behalf of the Council of the City of San Luis
Obispo.
SECTION 4. Environmental Determination. The City Council has determined that the
above actions do not constitute a project, as defined by Section 15378 of the California
Environmental Quality Act and are exempt from environmental review.
SECTION 3. Recordation of the Agreement. No later than twenty (20) days after the
parties enter into said agreement, the City Clerk shall cause this agreement to be recorded in the
Office of the County Recorder of the County of San Luis Obispo.
Upon motion of ______________________ , seconded by ______________________ ,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this ____ day of ____________________ 2014.
C3 - 26
Resolution No. _____ (2014 Series)
Page 3
____________________________________
Mayor Jan Marx
ATTEST:
____________________________________
Anthony Mejia
City Clerk
APPROVED AS TO FORM:
____________________________________
J. Christine Dietrick
City Attorney
C3 - 27
Page intentionally left
blank.
C3 - 28