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CC 2013-07-09_08.l. Adopt Ordinance - Mills Act ProgramTO: FROM: BY: MEMORANDUM CITY COUNCIL TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR AILEEN NYGAARD, ASSISTANT PLANNER JILLIAN RICE, ADMINISTRATIVE INTERN SUBJECT: CONSIDERATION OF ADOPTION OF AN ORDINANCE APPROVING DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 TO ESTABLISH A CITYWIDE MILLS ACT PROGRAM DATE: JULY 9, 2013 RECOMMENDATION: It is recommended that the City Council adopt 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 (Development Code Amendment Case No. 13-003). IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: It is anticipated that the code amendment would reduce the City's property tax revenue of each participating historical structure by approximately fifty-four percent (54%) which may equate to approximately $500 per year. BACKGROUND: On June 25, 2013, the City Council introduced an ordinance, without modification, to amend Section 16.16.135 of the Arroyo Grande Municipal Code regarding Mills Act contracts for historic properties and amending the historic designation process to eliminate the Architectural Review Committee recommendation from the process (Development Code Amendment Case No. 13-003). ANALYSIS OF ISSUES: The adoption of a Mills Act program is an incentive for ownership, protection and restoration 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 includes specific Item 8.l. - Page 1 CITY COUNCIL DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 -MILLS ACT PROGRAM JULY 9, 2013 PAGE 2 OF 3 provisions required by State law. It includes a minimum period of 1 O 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 were established by separate Resolution of the City Council and will be implemented by the Community Development Director or his/her designee. Development Code Amendment: The Code amendment amends subsection D of Section 16.16.135 amending the historic designation process to eliminate the ARC recommendation requirement and 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, as follows: "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." ALTERNATIVES: The following alternatives are provided for the City Council's consideration: • Adopt the Ordinance authorizing Mills Act contracts (Development Code Amendment 13-003). • Modify and schedule a public hearing to reintroduce the Ordinance. • 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 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 promotes streamlining. Item 8.l. - Page 2 CITY COUNCIL DEVELOPMENT CODE AMENDMENT CASE NO. 13-003 -MILLS ACT PROGRAM JULY 9, 2013 PAGE 3 OF 3 DISADVANTAGES: Allowing qualified historic structures a reduction in property taxes will reduce the overall property tax revenue of the City 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: A summary of the ordinance was published in The Tribune on Sunday, June 30, 2013. The Agenda was posted in front of City Hall on Wednesday, July 3, 2013, and the City's website on Friday, July 5, 2013. No public comments have been received. Item 8.l. - Page 3 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: Item 8.l. - Page 4 ORDINANCE NO. PAGE2 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 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 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, (c) the community development director, (d) the planning commission, (e) the city council, (f) by any resident of the city Item 8.l. - Page 5 ORDINANCE NO. PAGE3 of Arroyo Grande, or (g) any organization with a recognized interest in historical preservation. Applications for designation originating from other than the HRC must be accompanied by such historical and architectural information as is required by the 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 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. Item 8.l. - Page 6 ORDINANCE NO. PAGE4 7. Suspension of Work. While the community development director, planning commission or city council, on appeal, is considering a 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 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. 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 Summary. 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 8.l. - Page 7 ORDINANCE NO. PAGE 5 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