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R 4531 RESOLUTION NO. 4531 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. RESOLUTION NO. 4531 PAGE 2 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 effective date of Ordinance No. 654. On motion by Council Member Ray, seconded by Council Member Guthrie, and by the following roll call vote to wit: AYES: Council Members Ray, Guthrie, Brown, and Mayor Ferrara NOES: None ABSENT: Council Member Costello the foregoing Resolution was adopted this 25th day of June 2013. RESOLUTION NO. 4531 PAGE 3 1 TONY F MAYOR ATTEST: KELLY T RE, CITY CLERK APPROVED AS TO CONTENT: STEV N ADAMS, CITY MANAGER APPROVED AS TO FORM: TI THY J. EL, CITY ATTORNEY RESOLUTION NO. 4531 PAGE 4 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. RESOLUTION NO. 4531 PAGE 5 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. RESOLUTION NO. 4531 PAGE 6 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 RESOLUTION NO. 4531 PAGE 7 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 1/2 % 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. RESOLUTION NO. 4531 PAGE 8 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. RESOLUTION NO. 4531 PAGE 9 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 RESOLUTION NO. 4531 PAGE 10 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) OFFICIAL CERTIFICATION I, KELLY WETMORE, City Clerk of the City of Arroyo Grande, County of San Luis Obispo, State of California, do hereby certify under penalty of perjury, that the attached Resolution No. 4531 is a true, full, and correct copy of said Resolution passed and adopted at a Regular meeting of the City Council of the City of Arroyo Grande on the 25th day of June, 2013. WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 26'h day of June 2013. KELLY T RE, CITY CLERK