CC 2013-06-25_09.a. Proposed Ordinance - Mills Act ProgramTO:
FROM:
BY:
SUBJECT:
DATE:
MEMORANDUM
CITY COUNCIL u ~
TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR
AILEEN NYGAARD, ASSISTANT PLANNER
JILLIAN RICE, ADMINISTRATIVE INTERN
CONSIDERATION OF DEVELOPMENT CODE AMENDMENT CASE
NO. 13-003 TO IMPLEMENT A MILLS ACT PROGRAM, APPROVAL OF
A HISTORICAL PRESERVATION AWARD PROGRAM,
AUTHORIZATION FOR ADDITIONAL HISTORIC SURVEYS, AND
WAIVER OF THE APPLICATION FEE FOR HISTORIC DESIGNATION
APPLICATIONS FOR ONE YEAR
JUNE 25, 2013
RECOMMENDATION:
It is recommended that the City Council: 1) introduce an Ordinance amending section
16.16.135 of the Arroyo Grande Municipal Code regarding Mills Act contracts for historic
properties and amending the designation process to eliminate the Architectural Review
Committee recommendation requirement (Development Code Amendment Case No.
13-003); 2) adopt a Resolution establishing the Mills Act Historic Resource Protection
Tax Incentive Program; 3) adopt a Resolution establishing the Historic Preservation
Award Program; 4) appropriate $10,000 from the General Fund unappropriated fund
balance for historic surveys; and 5) waive the application fee for Historic Designation
Applications for a period of one year.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Mills Act Ordinance:
Establishing a Mills Act program is projected to impact City finances through a reduction
in the City's property tax income of each participating historical structure by
approximately fifty-four percent (54%). However, since all Mills Act assessed values are
subject to annual review and reflect the annual fluctuation in market rent, expenses, and
interest rates, the reduction in property tax amounts can vary. All assessment
calculations are conducted by the County Assessor after each contract is signed. To
limit the fiscal impact, many cities have limited the number of Mills Act contracts
approved per calendar year from five (5) to seven (7), depending on the respective
Item 9.a. - Page 1
CITY COUNCIL
DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 -MILLS ACT PROGRAM
JUNE 25, 2013
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city's budget and the type of historic resources participating in the program. For
comparison purposes, in the City of San Luis Obispo, each Mills Act contract costs the
City an average of $500/year in reduced property tax revenues. The average cost to the
City of Arroyo Grande would likely be lower due to lower property values than the City of
San Luis Obispo. It should also be noted that should any currently neglected properties
enter into a Mills Act contract with the City, thereby improving the property, it is possible
that the increase in property values would offset any loss in property tax.
In addition, staff time will be required to review historic designation applications, Mills
Act contract applications, and to administer and maintain contracts. There is not an
established fee for the processing of Mills Act applications and contracts.
Historic Surveys:
It is estimated that the City can contract for the survey of the remaining properties within
the Village Core Downtown zoning district for the $10,000 proposed. It is recommended
that this funding be appropriated from the existing General Fund balance for FY 2012-
13, which would come from anticipated savings. It will require substantial staff time in
coordinating the process and recommendations.
Waiver of the Application Fee for Historic Designation Applications for One Year:
The fee for processing a historic designation application is $200. Though not
anticipated, if twelve properties apply for historic designation, there could be a $2,400
impact.
BACKGROUND:
In 1976, legislation was adopted in California that created an alternative method for
determining assessed value of certain qualified historical properties in order to
encourage the preservation and maintenance of historic properties. First introduced in
1972 by San Diego State Senator James Mills, the Mills Act allows cities to enter into
contracts with the owners of qualified historic properties, defined in Government Code
Section 50280.1 as those listed in the National Register of Historic Places, located in a
registered historic district or listed in any state, county or city official register of historical
or architecturally significant sites, places, or landmarks. Under the Mills Act, a city may
establish a Mills Act program whereby the city enters into a contract with an owner of a
qualified historic property for the purpose of preservation, restoration, rehabilitation, and
maintenance of the property. In return, the property owner receives a reduction in their
property taxes. Mills Act property tax calculations are based upon the value of net
income potential and a variable capitalization rate established by the County Assessor's
office. The capitalization rate is established by calculating the combined mortgage rate,
risk component, tax rate, and amortization rate. As an example, a $550,000 property
with a net income of $24,000 and a capitalization rate of 13.75% could realize a
potential $3, 700 savings in annual property taxes for the property owner.
In Arroyo Grande, the establishment of a Mills Act program was first discussed during
the consideration of a resolution regarding a nomination of the Loomis Complex by the
Item 9.a. - Page 2
CITY COUNCIL
DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 -MILLS ACT PROGRAM
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PAGE30F7
State Historical Resources Commission in January 2003. During that time, the City did
not have formal procedures for the local designation of historical resources. In order to
remedy this, City staff sought to establish a "Certified Local Government Program" in
accordance with the National Historic Preservation Act and State Mills Act programs.
The purpose of this recommendation was to provide a procedure and criteria to help
evaluate and address the historical status of structures on a citywide basis. The
recommendation urged the City Council to adopt an ordinance that would appoint a
qualified historic preservation review commission, provide a system for the survey and
inventory of historic properties, a public participation process for recommending
nominations for local, state, or National Register of Historic Places status, and perform
other responsibilities delegated by the State for Mills Act property tax incentives, State
Historical Building codes, and other purposes.
In February 2005, staff recommended to the City Council that they form a Historical
Resources Committee and establish a process for the local historic designation of
eligible resources in Arroyo Grande. In order to create incentives for historic
preservation, staff recommended that the City Council consider a Mills Act program. In
March 2010, the City Council reviewed 10 recommendations related to historic
resources. After consideration, the Council directed staff to implement seven specific
actions, including the establishment of a Mills Act program. More recently, on February
12, 2013, the City Council approved the recommendations of the Historical Resources
Committee and Planning Commission to adopt the Historic Context Statement and
direct staff to commence work on a Mills Act program. Staff was also directed to
prepare a cost analysis to process additional historic surveys.
In a related action, Council Member Ray, with the concurrence of the City Council,
directed staff to develop recommendations for a historic restoration award program at
the March 26th meeting. The award would be presented to property owners who have
restored historic structures or properties.
Historical Resources Committee:
The Historical Resources Committee reviewed the Mills Act ordinance proposal at a
special meeting on May 29, 2013 and recommends approval of the ordinance and
implementation program with the following conditions:
1) that the restoration award be titled "Preservation" award, and
2) that preservation of historical landscaping and site features be included in the
description terms of individual Mills Act contracts.
Planning Commission:
The Planning Commission reviewed proposed DCA 13-003 and related actions on June
4, 2013 and recommended approval of all components of the item. Discussion revolved
around staff time required for implementation and enforcement of contract provisions,
defining qualifying properties, and potential savings for property owners. (Attachment 1)
Item 9.a. - Page 3
CITY COUNCIL
DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 -MILLS ACT PROGRAM
JUNE 25, 2013
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ANALYSIS OF ISSUES:
Mills Act Program:
The adoption of a Mills Act program is an incentive for ownership and protection of City
landmarks and other historical resources. It is a contract between the City of Arroyo
Grande and the owner of a designated historical resource, which allows the owner to
enjoy a reduced property tax rate from the County Assessor in exchange for the
preservation of the owner's historic property. The contract contains specific provisions
required by State law. It includes a minimum term of 10 years, renewing the 10 year
period annually, until a notice of non-renewal or cancellation is filed. The application
process, review procedures, and required contract provisions will be established by
separate Resolution of the City Council and will be administered by the Community
Development Director or his/her designee.
Staff surveyed other communities and found the following similarities among programs:
o Properties must be on a local, state, or national register of historic places or
contribute to a national historic district. Cities can narrow this definition.
o Properties must be privately owned and subject to property tax.
o Contracts are 10 years minimum. Contracts extend one year annually unless
either party chooses not to renew.
o Local government controls the application process and performs annual
inspections.
o The contract specifies the preservation, restoration, rehabilitation, and
maintenance terms.
o Property must be restored and maintained in a manner compatible with its
architectural style and the owner must use and retain where feasible original
materials. Federal and local standards apply.
The same survey revealed that establishment of the program could differ in approach as
follows:
o Formal ordinance approach, whereby the city council adopts an ordinance
that spells out the details of the Mills Act program in a historic preservation
ordinance.
o Informal ordinance approach, whereby the city council adopts an ordinance
implementing State law allowing for the approval of Mills Act contracts, and
authorizing establishment of the Mills Act program by resolution.
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CITY COUNCIL
DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 -MILLS ACT PROGRAM
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City staff is proposing the informal approach authorizing Mills Act contracts by
ordinance and the detailed program established by resolution, to maximize flexibility.
Development Code Amendment:
Staff has prepared a Development Code Amendment adding a simple provision to the
Code enabling the establishment of a Mills Act program. The code amendment adds
subsection "G" to Development Code section 16.16.135 entitled, "Historic Resource
Protection Incentives," which authorizes the City Council to enact a Mills Act historic
resource protection tax incentive program by City Council resolution.
"G. Historic Protection Incentives. In addition to any other incentive of federal or
state law, property owners of duly designated historic resources may apply for
Mills Act Historical Property Contracts ("Mills Act Contracts") with the City. A
Mills Act historic resource protection tax incentive program may be established
by City Council resolution. This subsection will implement State law (Government
Code Sections 50280 et. seq.), allowing the approval of Mills Act Contracts by the
City with Owners of qualified historic properties within the City."
To be eligible for the Mills Act program, an applicant would need to complete an
application form provided by the Community Development Director for a qualified
property. A separate application to establish a property's historic designation may be
required prior to the contract application process. Once the application is complete, the
Historic Resources Committee will review the application and make recommendations
to the City Council on the merits of the application. The City Council will then review the
application and determine whether to authorize the execution of a Mills Act contract with
the applicant.
Resolution establishing Mills Act Program:
The resolution contains the specific requirements of the program, including the
application requirements, State mandated contract provisions, and a sample Mills Act
contract. The contract sets forth a detailed work plan-maintenance and improvement
measures which are tailor-made for each historic property.
Historic Designation Process:
In addition to the Mills Act provision, staff also recommends amending the Historic
Resource Designation in the Development Code (AGMC 16.16.135.D) to eliminate the
requirement for an Architectural Review Committee recommendation. This revision was
directed by the City Council on March 9, 2010 to.streamline the review process.
Historic Surveys:
The City proposes to continue assisting in the protection of historic resources within the
Village Downtown Core zoning district by providing funding for property surveys for use
in the designation process. Staff has identified approximately 18 additional structures in
the Village Core Downtown Zoning District that have not yet been evaluated. It is
Item 9.a. - Page 5
CITY COUNCIL
DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 -MILLS ACT PROGRAM
JUNE 25, 2013
PAGE 6 OF 7
recommended that funding be appropriated in the amount of $10,000 in order to
complete these assessments. Staff then would prepare a request for proposal and a
selection committee would be established with a representative from the Historic
Resources Committee, Planning Commission, and City Council to select the consultant.
In addition, to provide further incentive for property owners outside the Village Core to
participate in the Mills Act contract program, staff recommends that an application fee
waiver be approved for the Historical Designation applications for one year. The current
Historical Designation application fee is $200. This was directed by the City Council at
the February 12, 2013 meeting.
Historical Preservation Award Program:
A Resolution is attached that will create a Historic Preservation Award Program per the
direction of the City Council. Under the program, a Historic Preservation Award
nominations can be made by any individual, Historical Resources Committee member,
or City staff member for any property, structure or resource in the City that has been
improved during the past six (6) month period. Recipients of awards will then be
determined by the Historic Resources Committee. Recipients would be presented with a
certificate at a regular City Council meeting and a yard sign that can be displayed on the
property for a three (3) month period. Since the Historical Resources Committee has
been delegated to oversee the selection of Historic Preservation Award recipients, they
will be assigned to develop guidelines for selection, additional forms of recognition, and
specific procedures.
ALTERNATIVES:
The following alternatives are provided for the City Council's consideration:
• Introduce the Development Code Amendment Ordinance, adopt the program
implementation Resolution, awards program Resolution, and approve the survey
budget and historic designation application fee waiver for one year.
• Review and modify the Development Code Amendment Ordinance and program,
and direct staff to return with revisions.
• Do not adopt the Ordinance.
• Provide other direction to staff.
ADVANTAGES:
As a preservation incentive, Mills Act contracts offer advantages to both local
government and property owners. The contracts provide property tax relief for owners of
qualified historical properties who agree to abide by reasonable historical resource
protection requirements. For local government, the protection requirements ensure an
authentic preservation, restoration, or rehabilitation, and a high level of maintenance of
a valuable resource that is important to the community. Further, the use of the Mills Act
gives communities the flexibility to deal with historical structures on a case-by-case
basis. Local government has the option to choose which properties are suitable for the
Item 9.a. - Page 6
CITY COUNCIL
DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 -MILLS ACT PROGRAM
JUNE 25, 2013
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incentive by evaluating various factors. These contracts can be used both as a tool to
protect an individual building, and as part of a broader community-wide program.
Removing the ARC from the designation process clarifies committee roles, avoids
duplication, and streamlines the designation process.
The Historical Preservation Award program, the surveying of historic properties and the
waiving of the fee for historic designation applications for a period of one year, all further
the City's goal of preserving historically significant resources.
DISADVANTAGES:
Allowing qualified historic structures a reduction in property taxes will reduce the overall
property tax revenue of the City. While historic protection is a goal of the City, funds
used for historic surveys, the waiver of application fees for historic designation
applications, and staff administration time diverts funds from other beneficial uses.
ENVIRONMENTAL REVIEW:
The Community Development Director has determined that establishment of the Mills
Act Program is not a "project" as defined by Section 15378 of the California
Environmental Quality Act as it applies to existing development and does not have the
potential to result in direct physical change in the environment.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall and published in the Tribune on Friday,
June 14, 2013. No public comments have been received.
Attachments:
1. Planning Commission minutes June 4, 2013
Item 9.a. - Page 7
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE AMENDING SECTION 16.16.135
OF THE ARROYO GRANDE MUNICIPAL CODE
REGARDING MILLS ACT CONTRACTS FOR HISTORIC
PROPERTIES AND AMENDING THE DESIGNATION
PROCESS TO ELIMINATE THE ARCHITECTURAL
REVIEW COMMITTEE
WHEREAS, the City has a defined process for designating local historic resources
codified in Title 16, Chapter 16, Section 135 of the Arroyo Grande Municipal Code; and
WHEREAS, the Mills Act, codified as Government Code Section 50280 et. seq.,
encourages the preservation, restoration, rehabilitation, and maintenance of historic
properties in accordance with the Secretary of the Interior's Standards for the Treatment
of Historic Properties; and
WHEREAS, the Mills Act permits cities to enter into Mills Act Contracts with owners of
qualified historic properties to protect and maintain their properties in exchange for the
County Assessor assessing their property at a lower property tax rate by utilizing a
formula established by the State of California; and
WHEREAS, the City Council finds and determines that entering into Mills Act Contracts
is an incentive for owners of designated historic properties to preserve, rehabilitate,
restore and maintain those properties; and
WHEREAS, the City Council further finds that the protection of these properties will
support the goals and objectives in the Land Use Element of the City's General Plan
concerning the preservation of historically significant properties, and foster economic
incentives to protect properties of historic significance; and
WHEREAS, the City Council desires to establish a Mills Act historic resource protection
tax incentive program; and
WHEREAS, the Community Development Director has determined that establishment
of the Mills Act Program is not a "project" as defined by Section 15378 of the California
Environmental Quality Act as it applies to existing development and does not have the
potential to result in a direct physical change in the environment; and
WHEREAS, the City Council finds, after due study, deliberation and public hearing, the
following circumstances exist:
Development Code Amendment Findings:
1. The proposed change of zone (or revision to this title) is consistent with the
goals, objectives, policies and programs of the general plan, and is necessary
Item 9.a. - Page 8
ORDINANCE NO.
PAGE2
and desirable to implement the provisions of the General Plan;
The proposed revision is consistent with the goals, objectives, policies and programs of
the General Plan in that protection of historical resources is an established goal.
2. The proposed change of zone (or revision to this title) will not adversely affect the
public health, safety, and welfare or result in an illogical land use pattern;
The proposed amendment will not adversely affect the public health, safety, and welfare
or result in an illogical land use pattern because it is a program change only that affects
existing development.
3. The proposed change of zone (or revision to this title) is consistent with the
purpose and intent of the title (or the portion of this title it is amending);
The proposed amendment is consistent with the purpose and intent of the title, as it
provides and ensures compatibility between this title and the General Plan to allow a
historic resource protection program.
4. The potential environmental impacts of the proposed change of zone (or revision
to this title) are insignificant, or there are overriding considerations that outweigh
the potential impacts;
There are no potential environmental impacts identified with the establishment of the
Mills Act program.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of Arroyo Grande
as follows:
SECTION 1. Recitals. The above recitals are true and correct and are incorporated
herein by this reference.
SECTION 2. Amended Subsection. Subsection D of Section 16.16.135 of the Arroyo
Grande Municipal Code is hereby amended as follows:
D. Designation Process. Historic resources and historic districts shall be
designated by the community development director, planning commission
or city council upon the recommendation of the HRC pna:; ARC! in the
following manner:
1. Initiation of Designation. Designation of a historic resource or a historic
district may be initiated by: (a) the owner of record of the property or
resource, (b) the HRC~~:~'(9):.'.thO:'ARQ, (c) the community development
director, (d) the planning commission, (e) the city council, (f) by any
resident of the city of Arroyo Grande, or (g) any organization with a
recognized interest in historical preservation. Applications for
Item 9.a. - Page 9
ORDINANCE NO.
PAGE3
designation originating from other than the HRC must be accompanied
by such historical and architectural information as is required by the
committee HRC to make an informed recommendation concerning the
application, together with the fee set by the city council.
2. Notice. The HRC shall publish and transmit a notice informing property
owners of historic resources proposed to be designated and all
interested parties of the time and location of all meetings in which the
designations will be discussed and considered.
3. Advisory Recommendations. The HRC Phd Jbe/'l\B'Q shall make
recommendations on a proposed designation of a historic resources or
historic districts to the community development director.
4. Community Development Director Decision. Except for concurrent
applications as provided for in_Section 16.12.070, the community
development director is authorized to approve minor use permits for
historic resource and historic district designations, subject to the
appeal provisions of_Section 16.12.150. The community development
director shall prepare a written decision that shall contain the findings
of fact upon which such decision is based. Copies of the decision shall
be provided to the applicant and owners of the designated property or
properties within the proposed historic district.
5. Public Hearing. A public hearing by the planning commission, pursuant
to_Section 16.12.160 of this title, shall be scheduled in the event that
the property owner does not consent to the application for a proposed
designation.
6. Findings. The community development director or the planning
commission if the property owner does not consent, may designate the
listing of a property as a historic resource only if all of the following
findings of fact can be made in an affirmative manner:
a. The proposed project is consistent with the goals, objectives,
policies and programs of the Arroyo Grande general plan;
b. Based upon consideration of information submitted in the
record during the Historic Resource designation process the
property meets any of the criteria listed in subsection B of
this section;
c. The resource retains the integrity of the design, has not been
inappropriately: (i) altered; (ii) relocated; (iii) added to; or (iv)
remodeled.
7. Suspension of Work. While the community development director,
planning commission or city council, on appeal, is considering a
Item 9.a. - Page 10
ORDINANCE NO.
PAGE4
historic designation, all development and building work on the site
proposed for historic designation shall be suspended.
SECTION 3. New Subsection. Section 16.16.135 of the Arroyo Grande Municipal
Code is amended to add a Subsection G as follows:
G. Historic Resource Protection Tax Incentives. In addition to any other incentive of
federal or state law. property owners of duly designated historic resources may apply for
Mills Act Historical Property Contracts ("Mills Act Contracts") with the Citv. A Mills Act
historic resource protection tax incentive program may be established by City Council
resolution. This subsection will implement State law (Government Code Sections 50280
et. seq.). allowing the approval of Mills Act Contracts by the City with owners of qualified
historic properties within the City.
SECTION 4. Severability. If any section, subsection, subdivision, paragraph, sentence,
or clause of this Ordinance or any part thereof is for any reason held to be unlawful, such
decision shall not affect the validity of the remaining portion of this Ordinance or any part
thereof. The City Council hereby declares that it would have passed each section,
subsection, subdivision, paragraph, sentence, or clause thereof, irrespective of the fact
that any one or more section, subsection, subdivision, paragraph, sentence, or clause be
declared unconstitutional.
SECTION 5. Ordinance Summarv. A summary of this Ordinance shall be published in
a newspaper and circulated in the City of Arroyo Grande at least five (5) days prior to
the City Council meeting at which the proposed Ordinance is to be adopted. A certified
copy of the full text of the proposed Ordinance shall be posted in the office of the City
Clerk. Within fifteen (15) days after adoption of the Ordinance, the summary with the
names of those City Council Members voting for and against the Ordinance shall be
published again, and the City Clerk shall post a certified copy of the full text of such
adopted Ordinance.
SECTION 6. Effective Date. This Ordinance shall take effect thirty (30) days after its
adoption.
On motion of Council Member
following roll call vote to wit:
AYES:
NOES:
ABSENT:
, seconded by Council Member
The foregoing Ordinance was adopted this _day of July, 2013.
, and on the
Item 9.a. - Page 11
ORDINANCE NO.
PAGES
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, CITY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, CITY ATTORNEY
Item 9.a. - Page 12
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE ESTABLISHING THE MILLS ACT
HISTORIC RESOURCE PROTECTION TAX INCENTIVE
PROGRAM.
WHEREAS, on June 4, 2013, the Planning Commission recommended adoption of an
Ordinance adding subsection "G" to Section 16.16.135 of the Arroyo Grande Municipal
Code relating to the enactment of Mills Act Historical Property Contracts ("Mills Act
Contracts") for property tax relief and for the protection of historic properties; and
WHEREAS, Subsection 16.16.135. G specifically allows owners of qualified historic
resources to apply for Mills Act Contracts with the City; and
WHEREAS, the Mills Act, codified at Government Code Section 50280 et seq.,
encourages the preservation, restoration, rehabilitation, and maintenance of historic
properties in accordance with the Secretary of the Interior's Standards for the Treatment
of Historic Properties; and
WHEREAS, the Mills Act permits cities to enter into Mills Act Contracts with owners of
qualified historic properties to protect and maintain their properties in exchange for the
County Assessor assessing their property at a lower property tax rate by utilizing a
formula established by the State of California; and
WHEREAS, the City Council finds and determines that entering into Mills Act Contracts
is an incentive for owners of designated historic properties to preserve, rehabilitate,
restore and maintain those properties; and
WHEREAS, the City Council further finds that the protection of these properties will
support the goals and objectives in the Land Use Element of the City General Plan
concerning the preservation of historically significant properties; and foster economic
incentives to protect properties of historic significance; and
WHEREAS, the City Council hereby desires to establish procedures for the enactment
of a Mills Act Historic Resource Protection Tax Incentive Program (Mills Act Program);
and
WHEREAS, the Community Development Director has determined that establishment
of a Mills Act Program is not a "project" as defined by Section 15378 of the California
Environmental Quality Act as it applies to existing development and does not have the
potential to result in a direct physical change in the environment.
Item 9.a. - Page 13
RESOLUTION NO.
PAGE2
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande
hereby adopts the Mills Act Program set forth in Exhibit "A", attached hereto and
incorporated herein by this reference.
NOW, THEREFORE, BE IT FURTHER RESOLVED that this Resolution shall become
effective on the effect date of Ordinance No. --
On motion by Council Member ___ , seconded by Council Member ___ , and by
the following roll call vote to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was adopted this 25th day of June, 2013.
Item 9.a. - Page 14
RESOLUTION NO.
PAGE3
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, CITY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, CITY ATTORNEY
Item 9.a. - Page 15
RESOLUTION NO.
PAGE4
EXHIBIT "A"
The City Council hereby establishes the Mills Act Historic Resource Preservation Tax
Incentive Program, allowing up to five (5) historic properties to be included in the
program annually, subject to the following requirements:
A. Application Requirements.
1. Application. A property owner shall complete an application form provided
by the Community Development Director. The application shall include,
but not be limited to, the following: (a) historic property description; (b)
detailed proposed preservation work plan narrative that describes the
improvements, maintenance and preservation over the life of the contract;
(c) grant deed and property ownership statement; (d) estimated property
tax savings; (e) estimated cost of improvements and estimated timing for
completion of the improvements; (f) photographs of the property and any
other information requested by the Community Development Director.
2. Fees. The City may charge a fee to recoup all Mills Act Contract
processing and administrative costs.
3. City Review and Historic Resources Commission recommendation. Once
the application is complete, the Community Development Director will
request that the Historic Resources Commission review the application
and make recommendations to the City Council on the merits of the
proposed application. The Historic Resources Commission may propose
modifications to the work plan as it deems necessary.
4. City Council Action. The Community Development Director shall request
City Council consideration of the Mills Act Contract. The City Council may
in its sole and absolute discretion authorize the execution of the Mills Act
Contract.
B. Provisions in Mills Act contracts.
1. All Mills Act Contracts shall comply with the provisions listed in the Mills
Act, which include, but are not limited to, the following:
a. The term of the Mills Act Contract shall be for a minimum of ten years.
b. For the preservation of the historical property and, when necessary, to
restore and rehabilitate the property, the owner must 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 Rehabilitation, and the State Historical
Building Code.
c. The owner shall agree to an inspection of the exterior, and when
applicable, the interior of the premises by the City, County, or City and
County, prior to a new Mills Act Contract, and every five years
thereafter, to determine the owner's compliance with the Mills Act
contract.
Item 9.a. - Page 16
RESOLUTION NO.
PAGES
d. The Mills Act Contract shall 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 Mills Act Contract as
the original owner who entered into the Mills Act Contract.
e. Each Mills Act Contract shall provide that on the anniversary date of
the contract or such other annual date as is specified in the Mills Act
Contract, a year shall be added automatically to the initial term of the
Mills Act Contract unless notice of nonrenewal is given as provided
under the Mills Act.
f. No later than twenty days after the City enters into a contract with an
owner, the City Clerk shall record with the County Recorder a copy of
the Mills Act Contract.
C. Mills Act Contract.
The Community Development Director shall maintain a current form Mills Act
Contract, which will include all of the provisions specified by State law.
SAMPLE CONTRACT
HISTORIC PROPERTY MILLS ACT CONTRACT BETWEEN THE CITY OF ARROYO
GRANDE AND THE OWNER OF THE HISTORIC PROPERTY LOCATED AT
~~~~~~~~ IN THE CITY OF ARROYO GRANDE AND COUNTY OF SAN
LUIS OBISPO, STATE OF CALIFORNIA
This historic property Mills Act contract (hereinafter referred to as the "Contract"), is
made and entered into this _ day of , 2013, by and between the City of
Arroyo Grande, a municipal corporation (hereinafter referred to as the "City"), and
(Hereinafter referred to as "Owner"), and collectively
referred to as the "parties."
Section 1. Description of Preservation Measures. The Owner, Owner's heirs, or
assigns hereby agrees to undertake and complete, at their expense, the preservation,
maintenance, and improvement measures described in the work plan set forth in
"Exhibit A" attached hereto.
Section 2. Effective Date and Term of Contract. This Contract 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 Contract's effective date, such
initial term will automatically be extended as provided in California Government Code
Section 50280 et. seq. and in Section 3, below, unless notice of nonrenewal is given as
provided in Section 50280.
Item 9.a. - Page 17
RESOLUTION NO.
PAGES
Section 3. Agreement Renewal and Non-renewal.
A. Each year on the anniversary of the effective date of this Contract (hereinafter
referred to as "annual renewal date"), a year shall automatically be added to
the initial term of this Contract 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 Contract, the
Owner or the City shall serve written notice of nonrenewal of the Contract 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 Contract as provided herein.
C. Upon receipt by the Owner of a notice of nonrenewal from the City, 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 Contract shall remain in effect for the balance of the term
then remaining.
Section 4. Standards and Conditions. During the term of this Contract, the historic
property shall be subject to the following conditions:
A. Owner agrees to preserve, maintain, and, where necessary, restore or
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 Rehabilitation, the
State Historical Building Code, and the work plan described in Exhibit A, to
the satisfaction of the Community Development Director or his designee.
B. 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.
C. Owner agrees to an inspection of the exterior and if applicable, the interior of
the premises by the City, County, or City and County, prior to a new Contract,
and every five years thereafter, to determine the Owner's compliance with the
Contract.
D. Owner agrees that property tax savings resulting from this Contract shall be
used for property maintenance and improvements as described in Exhibit A.
E. The following are prohibited: demolition or partial demolition of the historic
property; exterior alterations or additions not in keeping with the standards
Item 9.a. - Page 18
RESOLUTION NO.
PAGE7
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 that is unsightly due to lack of maintenance or
because such feature adversely affects, or is visually incompatible with, the
building's recognized historic character, significance, and design as
determined by the Community Development Director.
Section 5. Furnishing of Information. The Owner agrees to furnish any and all
information requested by the City that may be necessary or advisable to determine
compliance with the terms and provisions of this Contract.
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 Contract if it
determines that the Owner has breached any of the conditions of this
Contract 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 Contract. 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 % % of the current
market value of the property, as determined by the County Assessor, without
regard to any restriction imposed with this Contract.
B. If the historic property is acquired in whole or in part by eminent domain or
other acquisition by any entity authorized to exercise the power of eminent
domain, and the City Council determines that the acquisition frustrates the
purpose of the Contract, the Contract shall be cancelled and no fee imposed,
as specified in Government Code Section 50288.
Section 7. Enforcement of Contract. If the City determines that the Owner has
breached any of the conditions provided for in this Contract or has allowed the property
to deteriorate to the point that it no longer meets the standards for a qualified historic
property, the City may bring an action in court necessary to enforce the Contract,
including, but not limited to, an action to enforce the Contract by specific performance or
injunction.
Section 8. Binding Effect of Contract. This Contract will 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.
Item 9.a. - Page 19
RESOLUTION NO.
PAGES
Section 9. Notice. Any notice required by the terms of this Contract 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
300 East Branch Street
Arroyo Grande, CA 93420
To Owner: (Insert Owner's address)
Section 10. General Provisions.
A. None of the terms, provisions, or conditions of this Contract 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 venture.
B. The Owner agrees to hold the City and its elected and appointed officials,
officers, agents, and employees harmless from liability for damage or claims
for damage for personal injuries, including death, and claims for property
damage that 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 on the owner's behalf that 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 that 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 Contract regardless of whether or
not the City prepared, supplied, or approved the plans, specifications, or other
documents for the historic property.
D. In the event any of the provisions of this Contract 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.
E. This Contract shall be construed and governed in accordance with the laws of
the State of California.
F. This Agreement may be amended, in whole or in part, only by a written
recorded instrument executed by the parties hereto.
Item 9.a. - Page 20
RESOLUTION NO.
PAGE9
Section 11. Recordation and Fees. No later than twenty (20) days after the parties
enter into this Contract, the City shall cause this Contract 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 preparing, executing, recording, and
administering the Contract.
IN WITNESS WHEREOF, the City and Owner have executed this Contract on
the day and year written above.
OWNER
(Insert name of Owner) (Insert date)
CITY OF ARROYO GRANDE
Tony Ferrara, Mayor (Insert date)
ATTEST:
Kelly Wetmore, City Clerk
APPROVED AS TO CONTENT:
Steven Adams, City Manager
APPROVED AS TO FORM:
Timothy J. Carmel, City Attorney
ALL SIGNATURES MUST BE NOTARIZED
Item 9.a. - Page 21
RESOLUTION NO.
PAGE10
EXHIBIT A
WORK PLAN-MAINTENANCE AND IMPROVEMENT MEASURES FOR THE
HISTORIC PROPERTY LOCATED AT
~~~~~~~~~~
ARROYO GRANDE, CALIFORNIA.
1. Owner shall preserve, restore, and maintain the historic property, including its
character-defining architectural and site features in good condition, to the
satisfaction of the Community Development Director or his designee.
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 effective date of
the Contract. All changes or repairs shall be consistent with the standards
adopted by the Historic Resources Committee and the Secretary of the Interior's
Standards for the Treatment of Historic Properties:
(Insert improvements and repairs to be made by the Owner)
Item 9.a. - Page 22
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE ESTABLISHING THE HISTORIC
PRESERVATION AWARD PROGRAM.
WHEREAS, the General Plan policies, practices and Municipal Code regulations of the
City of Arroyo Grande ("City") emphasize the importance of preserving historic resources;
and
WHEREAS, improvements to historic resources reinforces the small town and rural
character of the community and accomplishes City economic development goals; and
WHEREAS, the City Council has determined that publicly recognizing property owners
for improvements to historic structures and properties will help promote these goals.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby establish a Historic Preservation Award program to include the
following procedures:
1. Any property, structure or other historic resource in the City that has been
improved during the past 6 month period can be nominated for a Historic
Preservation Award by any individual, Historical Resources Committee member,
or City staff member.
2. A recommendation will be prepared by staff on each nomination received, which
will be presented to the Historical Resources Committee for determination.
3. The Historical Resources Committee shall decide whether to approve the Historic
Preservation Award.
4. If approved, a certificate will be presented to the recipient by the City Council a
regular meeting.
5. Recipients of a Historic Preservation Award will also be presented with an official
yard sign that indicates the property is an award recipient. The sign can be
displayed on the property for up to three months following receipt of the sign.
On motion of Council Member , seconded by Council Member
and on the following roll call vote to wit:
AYES:
NOES:
ABSENT:
The foregoing Resolution was passed and adopted this 25th day of June, 2013.
Item 9.a. - Page 23
RESOLUTION NO.
PAGE2
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, CITY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, CITY ATTORNEY
Item 9.a. - Page 24
II DRAFT 11
ACTION MINUTES
REGULAR MEETING OF THE PLANNING COMMISSION
TUESDAY, JUNE 4, 2013
ATTACHMENT 1
COUNCIL CHAMBERS, 215 EAST BRANCH STREET
ARROYO GRANDE, CALIFORNIA
1. CALL TO ORDER
Chair Ruth called the Regular Planning Commission meeting to order at 6:00 p.m.
2. ROLL CALL
Planning Commission:
Staff Present:
3. FLAG SALUTE
Commissioners Kristen Barneich, John Keen, Jennifer Martin, Lisa
Sperow and Chair Elizabeth Ruth were present.
Community Development Director Teresa McClish, Assistant
Planner Aileen Nygaard, and Acting Secretary and Planning Intern
Rachel Grothe were present.
Commissioner Sperow led the Flag Salute.
4. AGENDA REVIEW
None
5. COMMUNITY COMMENTS AND SUGGESTIONS
None
6. WRITTEN COMMUNICATIONS
None
7. CONSENT AGENDA
7.a. Consideration of Approval of Minutes.
Action: Commissioner Barneich asked that the minutes from the May 21, 2013 be amended to
change wording from "drive aisle" to "access point from adjacent property" on page four under
item 9a. She also asked staff to include additional comments that she had made during the
discussion of Bob's Carwash. The Commission will wait until the next meeting (June 17, 2013)
to vote on the approval of the minutes.
8. PUBLIC HEARINGS
8.a. Consideration of Adoption of a Resolution recommending that the City Council
adopt an ordinance amending Section 16.04.070 and 16.44.050 of the City of
Arroyo Grande Municipal Code regarding Floodplain Management; Location -
Citywide; Applicant -City of Arroyo Grande
Community Development Director McClish presented the staff report and recommended the
Planning Commission adopt a resolution recommending that the City Council adopt an
ordinance amending Sections 16.04.070 and 16.44.050 of the City of Arroyo Grande ("City")
Municipal Code regarding floodplain management.
Community Development Director McClish explained the purpose of the amendments was to
make minor modifications so that the City's code reads more similar to FEMA regulations.
Item 9.a. - Page 25
PLANNING COMMISSION
MINUTES
June 4, 2013
PAGE2
Commissioner Sperow had questions regarding the date change on page 2 under Section 1,
specifically the date change from June 26, 2007 to September 19, 1984. She went on to
question if this was for the tracking purposes of the State. She also questioned the underlined
statement in Section 3 regarding the completion of structures. There was no time frame
specified and she felt the language appeared vague.
Community Development Director McClish explained even though the statement was vague that
there was a built-in incentive for property owners.
A final question from Commissioner Sperow was regarding who the Floodplain Administrator
was; a State or City employee.
Community Development Director McClish clarified that it is a City Engineer.
Chair Ruth opened the public hearing.
Hearing no comments, Chair Ruth closed the Public Hearing.
Action: Commissioner Sperow moved to adopt "A RESOLUTION OF THE PLANNING
COMMISSION OF THE CITY OF ARROYO GRANDE RECOMMENDING THAT CITY COUNCIL
INTRODUCE AND ADOPT AND ORDINANCE AMENDING SECTIONS 16.04.070 AND
16.44.050 OF THE CITY OF ARROYO GRANDE MUNICIPAL CODE REGARDING
FLOODPLAIN MANAGEMENT; LOCATION --CITYWIDE; APPLIED FOR BY THE CITY OF
ARROYO GRANDE. Commissioner Bameich seconded, and the motion passed on the following
roll call vote:
AYES:
NOES:
ABSENT:
Sperow, Barneich, Keen, Martin, Ruth
None
None
8.b. Consideration of Development Code Amendment Case No. 13-003 to implement a
Mills Act program, approval of a historical preservation award program,
authorization for additional historic surveys, and waiver of the application fee for
historic designation applications for one year.
Assistant Planner Nygaard presented the staff report and recommended the Planning
Commission recommend to the City Council: 1) introduce a Mills Act Ordinance (Development
Code Amendment Case No. 13-003); 2) adopt a Resolution implementing the Mills Act program;
3) approve a Resolution for the formation of a Historical Preservation Award program; 4)
appropriate and authorize an expenditure of $10,000 from the General Fund unappropriated
fund balance for historic surveys; and 5) waive the application fee for historic designation
applications for a period of one year.
Commissioner Barneich questioned the waiving of the fee for 1 year. She wanted to know if this
was in order to see how the program would fare. She went on to question how the public would
become aware of the program and suggested workshops and an educational pamphlet. She
went on to question page 4 of the staff report which discussed the implementation of the
program and how either a formal or informal approach can be utilized. She felt it was confusing
and staff clarified by explaining that the City can either implement what the State prescribes or
Item 9.a. - Page 26
PLANNING COMMISSION
MINUTES
June 4, 2013
PAGE3
meet the needs of the City. Both would still be covered under the Mills Act. Commissioner
Barneich asked about the amount property owners would save on their taxes.
Community Development Director McClish explained that the $500 figure mentioned in the staff
report is an estimate of the amount the City will lose in property tax for each Mills contract.
However, this amount may vary and depends on the individual worth of properties. The amount
poses little impact to the City and therefore does not represent a big burden.
Commissioner Sperow questioned the eligibility process. Specifically she wanted to know if
there was a contact and if so, how the City would check the upkeep and maintenance of
properties. She also questioned what the procedures for neglect were; if a property would lose
its designation. A final question posed regarded the removal of the ARC from the process.
Community Development Director McClish explained that ARC did not need to be involved as
the HRC is responsible for historic properties. City Council approved this as historical properties
are within the purview of the HRC.
Commissioner Martin asked if properties have to be nationally registered. She also asked about
the process of verifying a property's historical designation.
Staff answered Commissioner Martin's questions by stating that the property does not have to
be nationally registered and that local designation will suffice. In terms of checking historical
status, staff explained that the process is outlined by the City's Historic Context Statement to
evaluate and survey properties.
Commissioner Keen wanted to know how the taxes are calculated. He expressed concern that
one property owner may receive a bigger tax cut than another and worried that some may feel
cheated. He also wanted to know if the properties would only be located within the Village or if
they could be Citywide.
Staff explained that tax discounts are a set percent and that amounts will vary due to differing
property values. Staff went on to state that there could be historic properties outside of the
Village and that the Mills Act is open to any qualifying property within City limits.
Chair Ruth wanted to know if the act was initiated by the property owners. She went on to ask if
the City can designate properties and force them to comply. Another question posed was if the
property was bought while under the Mills Act if it would transfer to the new owner. A final
question regarded the fees being waived and if it included the historical designation fee.
Staff responded that the property owner must initiate to contract their property under the Mills
Act. The City has the authority to implement historic standards on building projects that come in
which are within the Historic District or display historic characteristics. Staff clarified that the only
fee being waived is the historic designation fee and that all other fees for administrative work will
remain in place. A fee for the contract application has not been established yet.
Chair Ruth opened the public hearing.
Hearing no comments, Chair Ruth closed the Public Hearing.
Item 9.a. - Page 27
PLANNING COMMISSION
MINUTES
June 4, 2013
PAGE4
Commissioner Barneich provided the following comments: the Mills Act is another tool in the
toolbox that can be utilized for historical preservation; she attended a historical preservation
conference in San Luis Obispo and found that their residents do take advantage of the tax
incentive.
Action: Commissioner Barneich made a motion recommending that the City Council: 1) introduce
a Mills Act Ordinance (Development Code Amendment Case No. 13-003); 2) adopt a Resolution
implementing the Mills Act program; 3) approve a resolution for the formation of a Historical
Preservation Award program; 4) appropriate and authorize an expenditure of $10,000 from the
General Fund unappropriated fund balance for historic surveys; and 5) waive the application fee for
historic designation applications for a period of one (1) year. Commissioner Sperow seconded, and
the motion passed on the following roll call vote:
AYES:
NOES:
ABSENT:
Barneich, Sperow, Keen, Marin, Ruth
None
None
9. NON-PUBLIC HEARING ITEM
None
10. NOTICE OF ADMINISTRATIVE DECISIONS SINCE MAY 21, 2013
Commissioner Barneich questioned if DR 13-008 (330 Myrtle Dr.) had gone to ARC.
Commissioner Keen answered that he had been present at the ARC meeting and that it had not
passed. Community Development Director McClish stated that verification of this was needed
and thus this item would have to be continued until the next meeting.
11. COMMISSION COMMUNICATIONS
Chair Ruth will be absent from the July 2, 2013 meeting.
12. STAFF COMMUNICATIONS
Community Development Director McClish communicated that SLOCOG is conducting a US
101 mobility study. The study hopes to identify locations where safety is of concern. The study
is hoping to garner community participation and Director McClish encouraged all to look at the
website.
13. ADJOURNMENT
On motion by Commissioner Barneich, seconded by Commissioner Keen and unanimously
carried, the meeting adjourned at 6:40 p.m.
ATTEST:
RACHEL GROTHE ELIZABETH S. RUTH, CHAIR
ACTING SECRETARY TO THE PLANNING COMMISSION
AS TO CONTENT:
Item 9.a. - Page 28
PLANNING COMMISSION
MINUTES
June 4, 2013
TERESA McCLISH, COMMUNITY DEVELOPMENT DIRECTOR
(Approved at PC Mtg _____ _,
PAGES
j Item 9.a. - Page 29
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Item 9.a. - Page 30