TO: ADAM PIRRIE, CITY MANAGER
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: DECEMBER 10, 2024
Reviewed by:
City Manager: AP
SUBJECT:
Title
HISTORICAL PROPERTY (MILLS ACT) AGREEMENT #24-MA02, BETWEEN THE CITY OF CLAREMONT AND ADAM BYRNES, PROPERTY OWNER OF 487 HARRISON AVENUE
Body
SUMMARY
The owner of the property at 487 Harrison Avenue, a two-story Spanish Colonial style home built in 1927, have submitted a request to enter into a Historic Property (Mills Act) Agreement with the City. The Mills Act is a preservation tool enacted by state legislature to ensure the long-term preservation of eligible historic properties and other significant site features of such properties. In return for committing to preserve their property via the agreement, owners receive a reduction in property taxes, which in turn helps finance needed repairs and renovations to the property.
On November 13, 2024, the Architectural & Preservation Commission reviewed the proposed agreement and voted unanimously to recommend approval of the subject Mills Act request. The City Council is the decision-making body for Mills Act requests and is asked to take final action on the agreement at this meeting.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Approve a Historic Property (Mills Act) Agreement between the City of Claremont and Adam Byrnes, property owner of 487 Harrison Avenue; and
B. Find this item is exempt from environmental review under the California Environmental Quality Act (CEQA).
Body
ALTERNATIVES TO RECOMMENDATION
In addition to staff’s recommendation, there are the following alternatives:
A. Continue the discussion and request additional information.
B. Make revisions to the proposed Mills Act Agreement and approve the agreement as revised.
C. Deny Mills Act Agreement #24-MA02.
FINANCIAL REVIEW
The costs associated with the review of this application have been borne by the applicant. The cost to prepare this report is estimated at $183 and is included in the operating budget of the Community Development Department.
Upon approval of a Mills Act historical property contract (Attachment A), the value of the subject property is reassessed based on a formula that considers the rental income that could be expected from the property, the Federal home loan interest rate, a historic property risk component, and an amortization component to result in a special Mills Act capitalization rate. The total tax savings for the property owner is determined by using the formula outlined in Attachment B, which also estimates the anticipated tax savings for the property owner/applicant. With approval of a Mills Act contract, the value of property tax savings must be put towards the scope of work, identified in Attachment A, to preserve or rehabilitate the historic character-defining elements of the property and ensure its ongoing historical and structural integrity. Approval of a Mills Act contract will also result in a minor loss of tax revenue to the City. This loss represents the City’s contribution to ensuring the property’s preservation for the benefit of the community.
Staff has prepared estimates of the anticipated tax savings (Attachment B) for the owner and the loss in tax revenue to the City if the Mills Act agreement is approved. The calculations estimate a potential tax savings to the owner of $10,897.00 per year ($108,970.00 over ten years) and a potential loss to the City in tax revenue of $1,264.00 per year. The remaining tax savings, $9,633.00 per year, would be the resulting loss in potential revenue the contract would create for other local, regional, and state agencies, and districts that receive a portion of property taxes paid.
ANALYSIS
Background
What is the Mills Act?
The Mills Act is a preservation tool created by the California state legislature in 1972 to encourage the preservation and restoration of historic properties. The act enables cities to enter into historical property agreements with owners of qualifying properties to reduce owners’ property taxes in order to incentivize investment in their historic property. While resulting in some lost tax revenue, the agreements provide benefits to cities in that they ensure preservation, high-quality rehabilitation, and maintenance of historic properties that represent important cultural resources.
As provided for by State law, the Mills Act is administered and implemented by local governments. Mills Act contracts are executed between the property owner and the local government granting the tax reduction. Cities have considerable discretion in evaluating Mills Act requests and are not mandated to approve historical property agreements. Each local government establishes its own eligibility criteria, application procedures, and the number of contracts to allow within its jurisdiction. The California Office of Historic Preservation (OHP) does not participate in the contract negotiations, is not a signatory to the contract, and has no authority over the administration of the Mills Act program.
City’s Mills Act Program
In October 2000, the City Council approved procedures and review criteria for agreements for properties in Claremont. Initially, the program was restricted to historic properties suffering severe deterioration and in danger of near-term demolition or eventual demolition due to long-term neglect. In January 2009, the City Council revised the review criteria to include all residential properties listed in the City’s Register of Structures of Historic and Architectural Merit of the City of Claremont (Register). In addition, the Council limited the maximum number of Mills Act contracts that can be approved to six per year.
On October 9, 2012, the City Council amended the program once more to provide clarification to one of the review criteria, and to establish an annual compliance review fee. These newly revised criteria and procedures are included as Attachment D (City Council Resolution 2012-75).
Property Description
The subject property, known as the Robbins House, is located within the Historic Claremont (HC) 7,500 zoning district and the Residential 6 General Plan Land Use Designation. The home was built in 1927 and designed by Lena Robbins who occupied the home with Homer Robbins, a mayor of Claremont from 1938-1946. Homer Robbins also built 530 Berkeley, the home directly to the north of the subject property, which has been an active Mills Act property since 2019 (Attachment G).
The character-defining features of the home were identified through site visits to the property and with input from the property owner. The home is a two-story Spanish Colonial style home with features including asymmetric volumes and planes, overhanging second story with false beams, and Spanish red tile roofing. The home also features extended rafters, arched openings, wood casement and single-hung windows, and decorative tile vents.
The interior character-defining features of the home include textured white stucco walls, arched doorways, curved ceilings in the family and dining room, tiled kitchen and entryway floor, and Spanish tile on the stair banister.
The home is in good condition, and with appropriate restoration and repair, it can continue conveying its historical appearance and significance.
Proposed Work Plan
The property owner has proposed a work plan that addresses period appropriate to the home and preservation of the architectural style and the original historic appearance of the property. A detailed summary of the proposed improvements is included for reference (Attachment E) with a summary provided here. The improvements include remodeling of both the primary bathroom and hallway bathroom. These items would exceed the cost of property tax savings over ten years.
Qualifying Criteria and Staff Evaluation
Pursuant to Section 130 of City Council Resolution No. 2012-75, a historical property contract may be approved only if all the following criteria are met:
A. The subject property meets the eligibility requirements for a Mills Act contract pursuant to California Government Code Section 50280.1 in that it is a privately owned property which is not exempt from property taxation, and is listed on the National Register of Historic Places, located in a National Register or local historic district, listed in a state or county official register of historic or architecturally significant sites, places or landmarks, or listed in the Register of Structures of Historic and Architectural Merit of the City of Claremont.
The subject property is privately owned by the applicant (Adam Byrnes) and is not exempt from property taxation. The subject property is also listed in the Register of Structures of Historic and Architectural Merit of the City of Claremont.
B. The subject property contributes significantly to the quality, diversity, historical interest, and ambience of the community.
The subject property contributes significantly to the quality, diversity, historical interest, and ambiance of the community, especially given its anchor location on the corner of Berkeley Avenue and Harrison Avenue. The home serves as a fine example of a Spanish Colonial architecture in good condition in a prominent area of the Historic Claremont district.
C. Significant features that defined the historical character of the subject property, and its buildings have not been destroyed or can be restored based on documentary, physical, or pictorial evidence.
The significant character-defining features of the subject property have largely been preserved, not destroyed, though some repairs and restoration are needed to extend the life and usability of the home.
D. The owner of the subject property proposes to make improvements that are related to preservation and/or rehabilitation of character defining elements and/or historical and structural integrity of the property. Additionally, the cost of such improvements must be equal to or greater than the expected property tax savings for the first ten years, which needs to be distributed into two five-year periods.
All improvements proposed by the applicant are related to either the preservation and/or rehabilitation of character defining elements, or the structural and historical integrity of the property, and improved livability of the home, and the estimated cost of these improvements exceeds the expected property tax savings. The details of the planned improvements are listed in Attachment E.
In completing the proposed work items with the benefit of a historical property contract, the property’s ability to continue contributing to the historical interest and ambiance of the Claremont community will be enhanced. The applicant has proposed a sensible work plan that would help ensure the home’s long-term livability.
Based on estimates provided by the applicant, the total cost of the proposed scope of work is approximately $147,857.00, 35% over the estimated savings of $108,970.00 that would result from the historical property contract over a 10-year period. With the signing of the historical property contract, the applicant would be required to invest the avoided property tax into the work outlined in Attachment E. Additionally, based on the proposed scope of work, the applicant would be contributing more of their own funds into the proposed work than they would be saving through their reduced property taxes.
E. The subject property is residential.
The subject property is a single-family residential property. Planning Staff have inspected the house and property and have had discussions with the property owner regarding the planned improvements to the property and supports awarding a Mills Act contract for the subject property.
COMMISSION REVIEW
The Architectural & Preservation Commission reviewed and voted unanimously to recommend approval of the agreement on November 13, 2024, with the direction for staff to work with the applicant to revise the schedule of improvements. Whereas the previous schedule of improvements reviewed by the Architectural & Preservation Commission was determined to lack sufficient detail, the revised schedule of improvements was updated to include additional qualifying items and more detailed line items with cost breakdowns. The revised schedule of improvements was emailed to the Architectural & Preservation Commission and found to be satisfactory. The Commission’s resolution is Attachment G.
LEGAL REVIEW
The City Attorney has reviewed and approved as to form the proposed Historical Property Agreement.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds it related to the following: General Plan, 2024-26 Budget, and the Sustainable City Plan.
CEQA REVIEW
The proposed scheduled improvements within the contact are exempt from environmental review under CEQA Guidelines Sections 15301 and 15302. The Class 1 exemption (CEQA Guidelines Section 15301) allows for the operation, maintenance, repair, or minor alteration of existing public facilities or mechanical equipment, with negligible or no expansion. The Class 2 exemption (CEQA Guidelines Section 15302) allows for the replacement or reconstruction of existing facilities involving negligible expansion of capacity. This item involves the maintenance, repair, minor work, or replacement of existing facilities.
The proposed scheduled improvements within the contract are also categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15331 in that these improvements are for the restoration and rehabilitation of a historical resource, will be conducted in a manner consistent with the Secretary of the Interior’s Standards of the Office of Historic Preservation of the Department of Parks and Recreation, United States Secretary of the Interior’s Guidelines for Rehabilitation of Historic Properties, and the State Historical Building Code and will be subject to applicable City permitting requirements. Therefore, no further environmental review is necessary.
None of the exceptions to the categorical exemptions set forth in State CEQA Guidelines Section 15300.2 applies to the proposed project because the proposed project: (1) is not located in a uniquely sensitive environment; (2) is not located within a highway officially designated as a State scenic highway; (3) is not located on a hazardous waste site; (4) would not have a cumulative impact; and, (5) would not have a significant adverse change in the significance of a historical resource. Therefore, the exemption applies and the exceptions do not. No further environmental review is necessary.
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a paper copy, please contact the City Clerk’s office.
Submitted by: Prepared by:
Brad Johnson Daniel Kim
Community Development Director Assistant Planner
Reviewed by:
Christopher Veirs
Principal Planner
Attachments:
A - Draft Mills Act Contract
B - Estimated Tax Savings Calculation
C - APC Staff Report
D - Resolution No. 2012-75
E - Schedule of Improvements
F - Photo Survey
G - Resolution No. 2024-13