TO: ARCHITECTURAL & PRESERVATION COMMISSION
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: NOVEMBER 13, 2024
SUBJECT:
Title
REVIEW OF HISTORICAL PROPERTY (MILLS ACT) AGREEMENT REQUEST #24-MA01 BETWEEN THE CITY AND THE OWNER OF THE PROPERTY LOCATED AT 1195 BERKELEY AVENUE - APPLICANT: NATALIE AND ISAAC KELLY
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SUMMARY
The owners of the property at 1195 Berkeley Avenue 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 the state legislature to ensure the long-term preservation of eligible historic properties and 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. The Architectural and Preservation Commission is the recommending body for Mills Act requests. The Architectural &Preservation Commission recommendation is then forwarded to the City Council for final action. Staff has reviewed the application and finds that each of the required criteria for entering into a Mills Act agreement, as established by the City Council, can be met.
RECOMMENDATION
Recommended Action
Staff recommends the Architectural& Preservation Commission:
A. Adopt A RESOLUTION OF THE ARCHITECTURAL & PRESERVATION COMMISSION OF THE CITY OF CLAREMONT, CALIFORNIA, RECOMMENDING CITY COUNCIL APPROVAL OF HISTORICAL PROPERTY (MILLS ACT) AGREEMENT #24-MA01 BETWEEN THE CITY AND THE OWNERS OF THE PROPERTY LOCATED AT 1195 BERKELEY AVENUE - APPLICANTS: NATALIE AND ISAAC Kelly; and
B. Find this item is exempt from environmental review under the California Environmental Quality Act (CEQA).
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ALTERNATIVES TO RECOMMENDATION
A. Continue the discussion and request additional information.
B. Express the intent to recommend denial of the Mills Act contract, specifically identifying the criteria that cannot be met, and continue the item to December 11, 2024 for adoption of the denial recommendation resolution.
FINANCIAL REVIEW
The costs associated with the review of this application have been borne by the applicant.
ANALYSIS
Upon approval of a Mills Act historical property contract, 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 owners is determined by using the formula outlined in Attachment C, which also estimates the anticipated tax savings for the property owners/applicants. With approval of a Mills Act contract, the value of property tax savings must be put towards the scope of work identified in Attachment F 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 C) 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 owners of $7,623.00 per year ($76,230.00 over ten years), and a potential loss to the City in tax revenue of $884.00 per year. The remaining tax savings, $6,739.00 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.
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 their own eligibility criteria, application procedures, and the number of contracts to allow within their 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 Douglass house, is located within the RS 8,000 zoning district and the Residential 6 General Plan Land Use Designation. The home was built in 1928. Though records are not certain, reports indicate the home may have been built by John Richardson Miller and Elva Ruby Miller and/or by Clarence Stover, a former City Councilmember, president of the Chamber of Commerce, and Planning Commissioner who was in the construction business in Claremont.
Notable residents of this home include Malcolm and Enid Douglass. Enid Hart Douglass is largely responsible for developing the oral history program at Claremont Graduate University and served as the program’s director from 1971 until retirement in 2003. Enid Douglass was also a Planning Commissioner from 1971 to1978, a City Councilmember, and served as the mayor of Claremont from 1982 to 1986. In 1979, Douglass helped found Claremont Heritage.
The character-defining features of the home were identified through site visits to the property and with input from the property owner (Attachment E). The home is a two-story Spanish Revival style home with California Ranch-style characteristics. Features include smooth stucco walls and Spanish tile roofing. The home is largely characterized by a large family room with two sets of French doors and a large arched window with a wrought-iron trim on the north side of the home. This wrought-iron trim matches the wrought-iron gates leading to the front door, arcade to the east of the family room, and side yard.
The windows are original wood-framed divided lite windows. The primary entrance to the home features an arcade with tile floors, enclosed by a low stucco wall with an angled brick cap. The original wood front door is inset by a stucco archway. The interior character defining features of the home include a CALCO Ancient Mayan fireplace, a focal point of the notable family room and arched doorways, curved ceilings, smooth plaster walls and wood floors throughout.
The home is in good condition and, with appropriate restoration and repair, can continue conveying its historical appearance and significance.
Proposed Work Plan
The property owner has proposed a sensible work plan that addresses repairs and maintenance 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 F) with a summary provided here. The improvements include hardwood flooring refinishing, baseboard replacement, new electrical for lighting in the kitchen, kitchen tile regrout, bathroom remodel, attic HVAC improvements, ceiling plaster repairs, new copper gutters throughout, fascia board repairs, gate repairs, and repainting of stucco, French doors, a block wall, exterior gates and garage door. 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 applicants (Natalie and Isaac Kelly) 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 ambience of the community, especially given its location on the corner of Berkeley Avenue and 12th Street where the family room and arcade are prominently featured which represent a fine example of the Spanish Revival style.
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 of the home. Although the second story addition is not an exemplary extension of the original home, the proposed work and renovation will bring it closer to the original architectural character.
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 F.
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 ambience 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 and restore some of its key historic features.
Based on estimates provided by the applicant, the total cost of the proposed scope of work is approximately $110,483.00, 45% over the estimated savings of $76,230.00 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 F. 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.
CEQA REVIEW
The proposed improvements scheduled for completion within the contract period are 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.
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 copy, please contact Commission Secretary, Pearl Juarez at 909-399-5499 or via email at pjuarez@claremontca.gov.
Notice of this matter was published in the Claremont Courier on October 31, 2024. Copies of this staff report have been sent to the applicant and Claremont Heritage.
Submitted by: Reviewed by:
Brad Johnson Christopher Veirs
Community Development Director Principal Planner
Prepared by:
Daniel KimAssistant Planner
Attachments:
A - Draft Mills Act Contract
B - Draft APC Resolution
C - Estimated Tax Savings Calculation
D - Adopted Procedures for Review and Approval of Historic Property Contracts
E - Photo Survey
F - Schedule of Improvements