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HomeMy WebLinkAbout01-21-2003 City Council Adjorned Agendai~ i r • -.5'~ ~~'~ ~s~ ~.. i ~ t . -,. ~ ~ , ~, ~~ ~> ,, r~~ ~,.-~. t« AGENDA ADJOURNED MEETING/JOINT SESSION SARATOGA CITY COUNCIL HERITAGE PRESERVATION COMMISSION JANUARY 21, 2003 ADJOURNED MEETING/JOINT SESSION-7:00 P.M. ADULT CARE CENTER - 19655 ALLENDALE AVENUE CALL MEETING TO ORDER - 7:00 P.M. MAYOR'S REPORT ON CLOSED SESSION PLEDGE OF ALLEGIANCE ROLL CALL ~. ~. ~_ _. REPORT OF CITY CLERK ON POSTING OF AGENDA (Pursuant to Gov't. Code 54954.2, the agenda for this meeting was properly posted ~' January 17, 2003 COMMUNICATIONS FROM COMMISSIONS & PUBLIC ~ ~- Oral Communications on Non-Agendized Items Any member of the public will be allowed to address the City Council for up to three (3) _ minutes on matters not on this agenda. The law generally prohibits the council from discussing or taking action on such items. However, the Council may instruct staff accordingly regarding Oral Communications under Council Direction to Staff. r Communications from Boards and Commissions ` '~ None Written Communications None • Oral Communications -Council Direction to Staff Instruction to Staff regarding actions on current Oral Communications. 1 r JOINT MEETING WITH HERITAGE PRESERVATION COMMISSION 1. Heritage Preservation Commission A. Introduction B. Heritage Resource Inventory and Ordinance C. Mills Act ~ ~ D. Fund Raising Programs ~~ E. Other OTHER CITY MANAGER'S REPORT ~, ADJOURNMENT rv h In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in this meeting, please contact the City Clerk at (408) 868-1269. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting (28 CFR 35.102-35.104 ADA Title II) • • f ~/ ,~ ~~.~ ~=~ ~ `~ ,~~ ~ ~ ~f~ ~~ ~, J ~ e~ -. V ~'-~ ~} ~~ ~~ \~ 4~. 2 1 • • • CITY OF SARATOGA CITY COUNCIL MEETING CALENDAR 2003 2/1 Council Retreat 2/5 Regular Meeting 2/11 Adjourned Meeting -Youth Commission, Library Commission, Arts Commission 2/19 Regular Meeting 3/5 Regular Meeting 3/11 Adjourned Meeting - SASCC, Parks and Recreation Commission 3/19 Regular Meeting 4/2 Regular Meeting 4/16 Regular Meeting 4/22 Adjourned Meeting -Public Safety Commission, Sheriff, Fire Districts 5/7 Regular Meeting 5/10 Council Retreat 5/13 Adjourned Meeting -Finance Commission, Chamber of Commerce, SBDC, Planning Commission 5/21 Regular Meeting 6/4 Regular Meeting 6/18 Regular Meeting 7/2 Regular Meeting 7/16 Regular Meeting 8/6 Regular Meeting -City Manager Evaluation 8/20 Summer Recess 9/3 Regular Meeting 9/17 Regular Meeting 9/23 Adjourned Meetin,_,g -Public Safety Commission, Saratoga Union School District, Cupertino Union School District, Campbell Union School District 10/1 Regular Meeting 10/15 Regular Meeting 11/5 Regular Meeting 11/19 Regular Meeting 12/3 Regular Meeting 12/9 Adjourned Meeting -Council Reorganization 12/17 Regular Meeting 3 t • SARATOGA CITY COUNCIL MEETING DATE:.. January 21, 2003 AGENDA ITEM: • Communit Develo ment CITY MANAGER: ~%~ ORIGINATING DEPT. y P PREPARED BY: John F. Livingstone AICP~~~ DEPT HEAD: SUBJECT:. Discussion topics .for the joint City Council, Heritage Preservation Commission meeting.. RECOMMENDED ACTION: Provide direction to staff concerning the requested topics, but not limited to these topics only. REPORT SUMMARY: The HPC is interested in obtaining direction from. the City Council on three topics, updating the Heritage Resource Inventory and the Heritage Preservation Ordinance, the Mills Act, and future fund raising activities. DISCUSSION: Heritage Resource Inventory and Ordinance The Heritage Preservation Commission (HPC) is in .the process of updating the .Heritage. Resource Inventory and Ordinance. The original inventory list was not comprehensive and should be regularly updated as a requirement of being a Certified Local :Government. The Ordinance should also be updated. In order to start the process the HPC plans on first. surveying .the possible historic structures in the City and then deciding which of these should be placed on the Heritage Resource Inventory. The original list done in the 1980's was not comprehensive and the property owners volunteered to be placed on the, list. Once the location and .number. of historic structures are located, a review of its. applicability to our existing ordinance and future land use policies can be reviewed. Since the original City of Saratoga. Heritage Ordinance and Heritage Resource List was created . the California Environmental Quality Act (CEQA) has changed.. In the last three years. CEQA .has. been updated to include any adverse changes including demolition, relocation_or alteration .such that the significance of an historical .resource would be impaired. A Historic Resource is defined as one that has significant .local significance or is eligible under the California Register. If a survey for the property does not exist the lead agency must evaluate all buildings and sites over 50 years old against the California Register criteria. The HPC is proposing the mandatory designation of all historic structures in the community that meet certain criteria. The prior list was done on a voluntary basis. The advantage of creating a new mandatory designation is that it educates the existing and proposed buyers that their structure has historic .significance and may be subject to the CEQA. An applicant could unknowingly prepare drawings to build a new home on a site with a historic home on it that is not on the current City of Saratoga Heritage Resource inventory. It also protects historic structures that are not currently on the list. An alternative approach would be to not make a list. and review each property individually when a project is proposed.. The Ordinance could be updated to clearly advise .applicants of detailed submittal requirements needed to establish a structure's historic significance. The original list includes approximately 111 properties. There are approximately 1,747 homes that were built prior to 1952, which is the 50-year time period. At 1945 the number of structures are reduced to 494. Assuming at least 100 of these properties. are on our existing list the HPC would need to survey approximately 400 properties. The State Office of Historic Preservation prefers the list encompass as many parcels as possible built prior to 1952. I have been advised by the State Office of Historic Preservation that as a Certified Local Government we could qualify for grant money to hire professional consulting firms to .assist with the survey and ordinance. Last year approximately 20 cities applied and 9 received grants. The largest amount was $25,000. The City needs to match the amount by 40% with either staff time or money. The HPC feels that some type of professional assistance with the project. is necessary. The HPC could do the survey work and then have a Certified Historic Consultant review the surveys and assist with updating the ordinance. The State also said that they would be more than happy to come to Saratoga and speak to the Commission or Council on the topic and provide us with guidance on the survey ,and ordinance. The following are some of the questions that the HPC would like direction from the City Council on: 1. Making the designation of a property deemed historic mandatory after a review by thee. HPC of sites from the expanded survey. 2. What type of contribution is the council willing to make to support the project? Is the Council willing to provide the 40% match to hire a consulting firm to manage the survey process? 3. Is the 1945 cut off date appropriate upon which to base a citywide survey? Currently staff reviews each property on a case-by-case basis to see if it may be of historic significance and whether it is listed in the City of Saratoga's Heritage Resource Inventory. If the house is on the current Heritage Resource Inventory, the project is considered locally significant and reviewed by the Heritage Preservation Commission. If the project is not on the list and appears to be historic and the applicant is proposing a major change to the structure such as a demolition, staff will recommend that the applicant contract with a Certified Historic Architect. The Historic Architect will first review the structure to see if it has any historic significance. If the structure were historic the project would then need to either meet the Secretary of Interior Standards for the proposed work or be subject to an environmental review. The Heritage Preservation Commission may also require that an applicant provide a report. from a Certified • 2 of 4 Historic Architect. For a complete evaluation of a potential historic property it costs the applicant approximately $3,000 dollars. The report also has been used to remove properties from the list that have been initially considered historic. Mills Act The Mills Act is state sponsored legislation granting local governments the authority to enter into an agreement with a property owner to allow them reduced property tax payments for the restoration and continued maintenance of their historic property. This is an economic incentive for property owners to preserve and maintain their buildings.. I have attached a document from the State of California explaining the program in detail. The City of Saratoga does not currently participate in the program. In order for a Saratoga resident to participate in the program the City must pass a resolution approving the Mills Act. The HPC would like direction concerning or relating to the Council's interest in the proposal and the opportunity to come back to the Council with a detailed report on the matter. Fund Raising Programs The HPC is interested in continuing fund raising activities such as the calendar sales. The funds would be used to educate and promote the preservation of historic resources in the community. The HPC would like to discuss various administrative methods that could be available to them for future projects such as the Adopt a Tree Program or House Tours to raise additional funds. FISCAL IMPACT: Heritage Resource Inventory and Ordinance The proposed survey of historic properties and ordinance update may have a fiscal impact if the Council supports using a Historic Consultant to assist with the survey and. ordinance. For approximately $13,000 a consultant would provide materials, supervise field surveys and provide training to a number of volunteers to conduct the survey. The consultant would also provide the final report and evaluations on each property. For an additional $2,000 the consultant would review the City of Saratoga's Ordinance, identify problems with the ordinance, and provide solutions to the problems. Finally for an additional $2,000 the consultant would conduct three community workshops. This amount may be offset if a grant is received for the project. The alternative would be to have staff work with the HPC to continue the update on a volunteer basis. Mills Act Potentially all of the homes selected to be on the Heritage Resource Inventory would be eligible for the Mills Act Property Tax Abatement Program. The attached handout shows that other local cities only have one to three contracts per City. The administration of the program can be charged to the applicants. The City would however, lose a portion of the property tax normally received from these properties. The City of Saratoga normally receives approximately $1,750 in property tax based on a $5,000,000 property or $350 fora $1,000,000 property. The Mills Act 3 of 4 would reduce this by approximately 60% or $1,050 and $210 respectively. The reduction in taxes may also impact the schools and other jurisdictions. Each request could be reviewed by the City Council on a case-by-case basis. Fund Raising Programs The fund raising programs would require additional staff time depending on the complexity of the project. The staff time to set up the additional accounts is insignificant. FOLLOW UP ACTIONS: Heritage Resource Inventory and Ordinance The HPC will set a date to have representatives from the State Office of Historic Preservation provide training and guidance on the survey and ordinance update. The HPC will continue. surveying homes for placement on the Heritage Resource Inventory.. Staff would then submit for a grant to assist with the survey and ordinance update, and prepare a request for proposal to start interviewing consultants. Fund Raising Programs Start working on the Adopt a tree program and house tour projects. Mills Act Prepare a detailed staff report to bring back to the City Council for discussion. • 4 of 4 • • Mills Act Property Tax Abatement Program The Mills Act is a state sponsored legislation granting local governments the authority to directly participate in an historic preservation program. More importantly, the Mills Act is a self- directed, economic incentive program designed to provide. private property owners the opportunity to actively participate in the restoration of their properties while receiving property tax relief. This package of information contains: • An information sheet on the Mills Act program • A list of cities and counties participating in the Mills Act program An example of a property tax assessment of an historic property in Sacramento County illustrating the. comparison between the standard calculation of a property tax assessment with the Mills Act projection The Mills Act information package from Redwood City Copies of the California Government Code and the Revenue and Taxation Code on the Mills Act Articles on the Mills Act program Should you require additional information on the Mills Act, please contact Eugene Itogawa in the Office of Historic Preservation, PO Box 942896, Sacramento CA 94296-0001, (916) 653-8936, gitog @ ohp.parks.ca.gov. • • This publiption has been financed in part with Federal funds from the National Park Service, Department of the Interior, under the National Historic Preservation Act of 1966, as amended, and administered by the California Office of Historic Preservation. The cornerns and opinions do not necessarily reflect the views or polices of the Department of the Interior, nor does the merrtion of trade names or commercial products constitute endorsement or recommendation by the Department of the Interior. Under Title Vl.of the Civil Rights Act of 1964 and Section 504 of the Rehabilitation Act of 1973, the U.S. Department of the Interior. strictly prohibits unlawful discrimination on the basis of race, color, national origin, age, or handicap in its federally- assisted programs. n you believe you have been discriminated against in any program, activity, or facility as described above, or 'rf you desire further information, please write to Office for Equal Opportunity, U.S. Department of the Interior, National Park Service, Box 37127, Washington DC 20013-7127. oum 2 Table of Contents Introduction ........................................................................................................... 4 Communities Participating in Mills Act Program ...................................................5 Property Tax Assessment Example ......................................................................8 Redwood City Mills Act Information Package .....................................................11 Califiomia State Codes Relating to Mills Act Program :..............................:.........16 Articles Related to Mills Act Program ..................................................................22 • • 3 Introduction Economic incentives contribute to the preservation of residential neighborhoods and the revitalization of downtown commercial districts. The Mills Act is the single most important economic incentive program available in Califomia for use by private property owners of qualified historic buildings: Owner-occupied single family residences and income-producing commercial properties may qualify for the Mills Act program. Property owners of historic buildings may qualify for property tax relief ff they pledge to rehabilitate and maintain the historical and architectural character of their properties for at least aten-year period. Mills Act participants may realize a property tax savings of approximately 50% each year for newly improved or purchased older properties. County Assessors are required to calculate the assessed value of the property tax savings for Mills Act properties on the. capitalization of income method rather than on market value. • The Mills Act is a permissive program subject to approval and adoption by city and county govemments. California's four largest cities (Los Angeles, San Diego, San Francisco, and San Jose) have instituted Mills Act programs. The Mills Act provides local govemments the flexibility to design preservation programs to accommodate specirfc community needs and priorities for rehabilitating entire neighborhoods, encouraging seismic safety programs, contributing to affordable housing, promoting heritage tourism, or fostering pride of ownership. A formal agreement, generally known as a Mills Act contract, is executed between .:the local government and the property owner for a minimum ten-year tenor. Contracts are automatically renewed each year and are transferred to~new owners when the property is sold. Property owners agree to protect, preserve, and maintain the property in accordance with specific historic preservation standards and conditions identified in the contract. Periodic inspections of the property by city or county officials ensure proper maintenance of the property. Local authorities may impose penalties for breach of contract or failure to protect the historic property. The contract is binding to all owners during the contract period. A qualified historic property is a property listed on any official federal, state, county, or city register, including the National Register of Historic Places, the Califomia Register of Historical Resources, Califomia Historical Landmarks, State Points of Historical Interest, local landmarks, and local survey listings. The Office of Historic Preservation maintains a current list of cities and counties that have adopted the Mills Act and copies of successful Mills Act ordinances, resolutions, and contract agreements. 4 • Q d V N J J Z r~'L' Q d H d N W F~ V • j j 1!+ l i l I i! I, 1 l i l j;;; t I j i I ( I I I l l l I I i l i I l I i t i ~ ~ i I I I I I I j i I I I I I i I i I~' I I I I I I; I j~ l i l I I j l~ ~ l W I i l l l i! 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' ~ I V ~ ~ I O i i ~ ~ I ~ , ^ ~^ i i ~ _~ ~ I~ ~o l i ~ ,W; I , ~ ~ I~ Q I ! Q a l I I ~ oC l I° ° I~ Z z ~ ~ , = H U u W ~ ~ ,ZI ~I O IU O ~~ ;~ m ~ O 11J ifZ Q ~ !~! O ~I ~WII' ~ LL1 • • ~;~::- Pfopei-ty Tax Assessment Example (Courtesy of Sacramento County) • C, 3 EXAMPLE is Mills Act v. Normal~Assessment Single Family Residence 1=C0 Sc. Ft., 75 Yecrs Oid Mills Act Assessment Inccme AFFrccc'~ to Vcive Gress Inccme: i$2S0/mc x 12)= $10..GO vcccncy 3 col Loss: (5 0) _ ~ - `10 Effective Cross: X9.690 E~cpenses: Mcintencnce c00 lrsurcnce ~ 400 T ctc: Expenses: ~ - 1.000 Nei GFerctirs lr,ccm~e $ 8.b50 Cc~itciizcticn Rate Interest Rcte 7.50 Risk Rcte 4.00 Cerrecicticn Rcte 200 Tcx Rcte 1.C-0 Tetcl Cca Rcte 1x.50 0 Cc:.itciizcticn cf Net Inccme: NOI/Cop Rcte i?3 .c°0 = $ 59.531 .1450 Assessed Velue = ,Sb0,000 Estimated Property Tcxes: $ 600 Normcl Assessment Mcricet ~.Fcrccch to VGue 1) Assesscr uses Scie Ccm~c:iscn Aporecch t,~sir.5 scles cf simiicr properties cprrcpriciely ce;•ustec' for ciiferences between cempcrcble cnd the subject prcpery. 2) Seles in~iccte rr,cricet vciue c; $150.Gti,~O Assessed Vciue = $150,000 Estimated Tcxes = $1,00 Nei FrccE.riy ~cx scvings under !v1)lls cc. _ $900 ;cC o~ 4 • • • 9 EXAMPLE 2: Mills Act v. Normal Assessment • 1996 r~ L Comrx~erciel Office Building Milis Ac' Assessment Income AFprocc~ to Vciue Normcf Assessment Income Approech to Vciue Gross Income: Office ] 40, ] 36 st G 5 ] .i 1= S23S,526 Office 20.860 sf ~ 2.04= 42.55- StcrcSe 540 sf ~ 51,01= Ss5 5282.725 _ x i ~ mo 7ota1 Annual income 53,39270 Vacancy -5 0 - 169.635 Effecfiive Gross 5:.?73.065 Expenses: Mcnagmer•,t - 25i.8~~ Mcintencnce - 90.E=:, lnsurcnce - {0 r~ Utilities - 32].924 .lanitcrcl - l 20.744 - 8~ i . i E8 Net Income: 52375.E97 CapifiaGzation Rate: lrterest Rcte 7.50 Risk Rcte 200 Deprecictien Rcte 2.00 i ox Rate 1.00 7ctct Ccp Rcte 1250 0 Capifiai'rzed Vciue: NCI/Rate 5 2?75.$9i= Sig ~Oi,17b .i2~0 Vciue Conclusion: Assessed Vciue = 519,000,000 Estimated Property 7cxes:: ? 90,000 Gross Income: (Some es fcr Mi11s Act ireetmer,tj Net Income: $2.3i~,?97 Capitatizalion Rate: Mcricet De.*ived OAR ~.~ o i ax Rcte 1.0 0 7ctci'Ccp Rote 10.5G o CapifiaI'ued Vaiue: NOIJRcte $ 2.75.897= S22.b2i,~90 . ] 050 Vaiue Conclusion: Assessed Vciue = $22,625,000 Estimated Property ?axes: $226.250 Net rrcperry tcx savings under Mills cct = $36,25a (1 c of J.. ~ 0 COL'R'?'=c~' OF S CQ:.:•'~:d~'U r'0;.':•;:'. :SSL•SSOR S OFF1C • Redwood City Mills Act Information Package (Courtesy of the City of Redwood City) • • 11 i WHAT IS THE MILLS ACT`? • ADOPTION IN 1972, AMENDED IN 1984. • PROVIDES FOR A REDUCTION IN PROPERTY TAXES FOR QUALIFIED HISTORIC PROPERTIES. • REPRESENTS A CURRENT USE ASSESSMENT FOR PROPERTIES, KNOWN AS A "CONTRACT ASSESSMENT'. • PROPERTY OWNERS MUST. ENTER INTO PRESERVATION CONTRACTS WITH THE CITY IN EXCHANGE FOR PROPERTY TAX RELIEF. • _ SOURCE OF AUTHORITY: - CONSTTI'UTIONAL AUTHORITY TO PROVIDE PROPERTY TAX RELIEF FOR HISTORIC PROPERTIES (CA. CONL-TITUTIONAL ART: XIII-8) - HISTORIC PROPERTY CONTRACTS (CA. GOVT. CODE--50280-50289) - REASSESSMENT OF PROPERTY SUBJECT TO A MTT.T S ACT COACT (CA. REVENUE & TAX CODE--439-439.4) • ~ COUN'T'Y ASSESSOR DIRECTED BY STATE LAW TO ADJUST VALUE OF PROPERTY DOViTNWARD TO REFLECT RESTRICTIONS PLACED ON PROPERTY RATHER THAN VALUE. r~ COURTESY OF REDWOOD CITY 12 BENEFITS OF MILLS ACT AGREEMENT • REDUCTION IN PROPERTY TAX. • INCEASES LIkELIHOOD OF PRESERVATION. • ASSURES MECHANISM TO AVOID DETERIORATION. • PROVIDES MECHANISM FOR REHABILITATION. • CAN ENCOURAGE SENSITIVE HOME BUYERS TO PURCHASE DESIGNATED HISTORIC STRUCTURES. • MEETS THE GOALS OF THE HISTORIC LANDMARKS ELEMENT OF THE 1990 GENERAL PLAN AND HISTORIC PRESERVATION ORDINANCE. • AI--FELTS OWNER-OCCUPIED STRUCTURES AS WELL AS INCOME-PRODUCING PROPERTIES. • .VISUALLY Ilv1PROVES THE PHYSICAL ENVIRONMENT OF THE COMMUNITY AND PROVIDES A FOCUS ON HISTORIC LANDMARKS. 13• Q O w (!J X }a- t/1 W U ~ V ~ Q a. te a- z 0 ~ V 0 ~ a a Q U O~ tJ~ ~ W ~ ~w J O ¢~ ~a w w H ~~ UV Q¢ v~ ~ J ~ J 0 ~U C7 O _Z ~ Z ~ 2 ~ a0 U ~~ VwU .. O~~ =w~ -- CL p Q e _~ W \ ~a ~ _J U ?. U0 U 0 F- c~ a yl J. J W O U z a z z Q h ~_ T ~~ ~~ o~ ~° ~~ 0 .. N 0 N E-~ N I l o Q N w ~ . ~ ~~~ ~~~ ~- z ~z. w~ o a~~ ~ O ~~ w Q~~ ~~~ ~~~ 0 • 00 N ~. N ~ ~ 11 •• p ~ 0 o 0 ~ ~' ~ ~ N o ~ ~ o v1 ~ ~ ~ ~ ~ ~ ~• a ~ H ~ A ~ a' Z W O ~ a F" U ~" ~ w ~ ~" ~ ~a ~ z v~ F 0 00 15 California State Codes Relating to Mills. Act Program California Government Code. Article 12. Sections 50280 - 50290 50280. Restriction of property use. Upon the application of an owner or the agent of an owner of any qualified historical property, as defined in Section 50280.1, the legislative body of a city, county, or city and county may contract with the owner or agent to restrict the use of the property in a manner which the legislative body deems reasonable to carry out the purposes of this article and of Article 1.9 (commencing with Section 439) of Chapter 3 of Part 2 of Division 1 of the Revenue and Taxation Code. The. contract shall meet the requirements. of Sections 50281 and 50282. 50280.1. Qualified histcr;c property. "Qualified historical property° for purposes of this article, means privately owned property which is not exempt from property taxation and which meets either of the following: (a) Listed in the National Register of Historic Places or located in a registered historic district, as defined in Section 1.191-2(b) of Title 26 of the Code of Federal Regulations. ~ ~~ (b) Listed in any state, city, county, or city and county official register of historical or architecturally significant sites, places, or landmarks. 50281. Required corrt-~.~t provision. Any contract entered into ~:~derthis article shall contain the following provisions: (a) The term of the co~~~ °:= a shall be for a minimum period of 10 years. (b) Where applicable. ~•:=:~ ::ontract shall provide the following: (1) For the preservatio-::~z the qualified historical property and, when necessary, to restore ana 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, and the State Historical Building Code. (2) For the periodic examinations of the interor and exterior of the premises by the assessor, the Department of Parks and Recreation, and the State Board of Equalization as may be necessary to determine the owner's compliance with the contract. (3) For it to 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. (c) The owner or ager== --~ ~n owner shall provide written notice of the contract to the Office of Historic ~ ~~~:~°-~rvation within six .months of entering into the contract. 16 50281.1. Fees. The legislative body entering into a contract described in this article may require that the property owner, as a condition to entering into the contract, pay a fee not to exceed the reasonable cost of administering this program. 50282. Renewal. . (a) Each contract shall provide that on the anniversary date of the contract or such other annual date as is specified in the contract, a year shall be added automatically to the initial term of the contract unless notice of nonrenewal is . given as provided in this section. If the property owner or the legislative body desires in any year not to renew the contract, that party shall serve written notice of nonrenewal of the contract on the other party in advance of the annual renewal- date of the contract. Unless the notice is served by the owner at least 90 days prior to the renewal date or by the legislative body at least 60 days prior to the renewal date, one year shall automatically be added to the term of the contract. (b) Upon receipt by the owner of a notice from the legislative body of nonrenewal, the owner may make a written protest of the notice of nonrenewal. The legislative body may, at any time prior to the renewal date, withdraw the notice of nonrenewal. (c) If the legislative body or the owner serves notice of intent in any year not to renew the contract, the existing contract shall remain in effect for the balance of the period remaining since the original execution or the last renewal of the contract, as the case may be. (d) The owner shall furnish the legislative body. with any information the legislative body shall require in order to enable.it to determine the eligibility of the property involved. (e) No later than 20 days after a city or county enters into a contract with an owner pursuant to this article, the clerk of the legislative body shall record with the county recorder a copy. of the contract, which shall describe the property subject thereto. From and after the time of the recordation, this contract shall impart a notice thereof to all persons as is afforded by the recording laws of this state. 50284. Cancellation. The legi~fatrve body may cancel a contract if it determines that the owner has breached any of the conditions of the contract provided for in this article or has allowed the property to deteriorate to the point that it no longer meets the standards for a qualified historical property. The legislative body may also cancel a contract 'rf it determines that the owner has failed to restore or rehabilitate the property in the manner specified in the contract. 50285. Consultation with state commission. No contract shall be canceled under Section 50284 until after the legislative body has given notice of, and has held, a public hearing on the matter. Notice of the hearing shall be mailed to the last known address of each owner of .property within the historic zone and shall be published pursuant to Section 6061. 17 50286. Cancellation. (a) If a contract is canceled under Section 50284, the owner shall pay a cancellation fee equal to 721/2 percent of the current fair market value of the property, as determined by the county assessor as though the property were free of the contractual restriction. (b) The cancellation fee shall be paid to the county. auditor, at the time and in the manner that the county auditor shall prescribe, and shall be allocated by the county auditor to each jurisdiction in the tax rate area in which the property is located in the same manner as the auditor allocates the annual tax increment in that tax rate area in that fiscal year. ~ . (c) Notwithstandingany other provision of law, revenue received by a school district pursuant to this section shall be considered property tax.revenue for the purposes of Section 42238 of the Education Code, and revenue received by a county superintendent of schools pursuant. to this section shall be considered property tax revenue for the purposes of Article 3 (commencing with Section 2550) of Chapter 12 of Part 2 of Division 1 of Tile 1 of the Education Code. 50287.. Action to enforce contract. As an alternative to cancellation of the contract for breach of any condition, the county, city, or any landowner may bring any action in court necessary to enforce a contract including, but not limited to, an action to enforce the contract by specific performance or injunction. 50288. Eminent domain. In the event that property subject to contract under this article 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 acquisition is determined by the legislative body to frustrate the purpose of the contract, such contract shall be canceled and no fee shall be imposed under Section 50286. Such contract shall be deemed null and void for all purposes of determining the value of the property so acquired. 50289. Annexation by city. In the event that property restricted by a contract with a county under this article is annexed to a city, the city shall succeed to all rights, duties, and powers of the county under such contract. 50290. Consultation with state commission. Local agencies and owners of qualified historical properties may consult with the State Historical Resources Commission for its advice and counsel on matters relevant to historical property contracts. • 18 California Revenue and Taxation Code. Article 1.9, Sections 439 - 439.4 i 439. Historical Pro a Restrictions; enforceabl restricted property. ~1° P rtY Y For the purposes of this article and within the meaning of Section 8 of Article Xlll of the Constitution, property is "enforceably restricted" if it is subject to an historical property contract executed pursuant to Article 12 (commencing with Section 50280) of Chapter 1 of Part 1 of Division 1 of Title 5 of the Govemment Code. 439.1. Historical Property; definitions. For purposes of this article "restricted historical property" means qualified historical property, as defined in Section 50280.1 of the Govemment Code, that is subject to a historical property contract executed pursuant to Article 12 (commencing with Section 50280) of Chapter 1 of Part 1 of Division 1 of Title 5 of the Govemment Code. For purposes of this section, "qualified historical property" includes qualified historical improvements and any land on which the qualified historical improvements are situated, as specified in the historical property contract. If the historical property contract does not specify the land that is to be included, "qualified historical property" includes only that area of reasonable size that is used as a site for'the historical improvements. . 439.2. Historical Property; valuation. When valuing enforceably restricted historical property, the county assessor shall not consider sales data on similar property, whether or not enforceably restricted, and shall value that restricted historical property by the capitalization of income method in the following manner: (a) The annual income to be capitalized shall be determined as follows: (1) Where sufficient rental information is available, the income shall be the fair rent that can be imputed to the restricted historical property being valued based upon rent actually received for the property by the owner and upon typical rentals received in the area for similar property in similar use where the owner pays the property tax. When the restricted historical property being valued is actually encumbered by a lease, any cash rent or its equivalent considered in determining the fair rent of the property shall be the amount for which the property would be expected to rent were the rental payment to be renegotiated in the light of current conditions, including applicable provisions under which the property is enforceably restricted. (2) Where sufficient rental information is not available, the income shall be that which the restricted historical property being valued reasonably can be expected to yield under prudent management and subject to applicable provisions under which the property is enforceably restricted. (3) If the parties to an instrument that enforceably restricts the property stipulate therein an amount that constitutes the minimum annual income to be capitalized, then the income to be capitalized shall not be less than the amount so stipulated. For purposes of this section, income shall be determined in accordance with rules and regulations issued by the board and with this section 19 and shall be the difference between revenue and expenditures:. Revenue shall be the amount of money or money's worth, including any cash rent or its equivalent, that the property can be expected to yield to an owner-operator annually on the average from any use of the property permitted under the terms by which the property is enforceably restricted. Expenditures shall be any outlay or average annual allocation of money or money's worth that can be fairly charged against the revenue expected to be received during the period used in computing the revenue. Those expenditures to be charged against revenue shall be only those .which are ordinary and necessary in the production and maintenance of the revenue for that period. Expenditures shall not include depletion charges, debt retirement, interest on funds invested in the property; property taxes, corporation income taxes, or corporation franchise taxes based on income. (b) The capitalization rate to be used in valuing owner-occupied single family .dwellings pursuant to this article shall not be derived from sales data and shall be the sum of the following components: (1) An interes# component to be determined by the board and announced no later than September 1 of the year preceding the assessment year and that was the yield rate equal to the effective rate on conventional mortgages as determined by the Federal Housing Finance Board, rounded to the nearest 1/4 percent. (2) A historical property risk component of 4 percent.. (3) A component for property taxes that shall be a percentage equal to the • estimated total tax rate applicable to the property for the assessment year times .the assessment ratio, . (4) A component for amortization of the improvements that shall be a percentage equivalent to the reciprocal of the remaining I'rfe. (c) The capitalization rate to be used in valuing all other restricted historical property pursuant to this article shall not be derived from sales data and shall be the sum of the following components: (1) An interest component to be determined by the board and announced no later than September 1 of the year preceding the assessment year and that was the yield rate equal to the effective rate on conventional mortgages as determined by the Federal Housing Finance Board, rounded to the nearest 1/4 percent. (2) A historical property risk component of 2 percent. (3) A component for property taxes that shall be a percentage equal to the estimated total tax rate applicable to the property for the assessment year times the assessment ratio. (4) A component for amortization of the improvements that shall be a percentage equivalent to the reciprocal of the remaining life. (d) Unless a party to an instrument that creates an enforceable restriction expressly prohibits~the valuation, the valuation resulting from the capitalization of income method described in this section shall not exceed the lesser of either the valuation that would have resulted by calculation under Section 110, or the 20 valuation that would have resulted by calculation under Section 110.1, as though the property was not subject to an enforceable restriction in the base year. (e) The value of the restricted historical property shall be the quotient of the income determined as provided in subdivision (a) divided by the capitalization rate determined as provided in subdivision (b) or (c). (f) The ratio prescribed in Section 401 shall be applied to the value of the property determined in subdivision (d) to obtain its assessed value. 439.3. Historical Property; notice of nonrenewal. Notwithstanding any provision of Section 439.2 to the contrary, if either the county or city or the owner of restricted historical property subject to contract has served notice of nonrenewal as provided in Section 50282 of the Government Code, the county assessor shall value that restricted historical property as provided in this section. (a) Following the hearing conducted pursuant to Section 50285 of the Govemment Code, subdivision (b) shall apply until the termination of the period for which the restricted historical property is enforceably restricted. (b) The board or assessor in each year until the termination of the period for which the property is enforceabty restricted shall do all of the following: (1) Determine the full cash value of the property pursuant to Section 110.1. If the property is not subject to Section 110.1 when the restriction expires, the value shall be determined pursuant to Section 110 as if the property were free of contractual restriction. If the property will be subject to a use for which this chapter provides a special restricted assessment, the value of the property shall • be determined as if it were subject to the new restriction. (2) Determine the value of the property by the capitalization of income method as provided in Section 439.2 and. without regard to the fact that a notice of nonrenewal or cancellation has occurred. (3) Subtract the value determined in paragraph (2) of this subdivision by capitalization of income from the full cash value determined in paragraph (1). (4) Using the rate announced by the board pursuant to paragraph (1) of subdivision (b) of Section 439.2, discount the amount obtained in paragraph (3) for the number of years remaining until the termination of the period for whicf~ the property is enforceably restricted. (5) Determine the value of the property by adding the value determined by the capitalization of income method as provided in paragraph (2) and the value obtained in paragraph (4). (6) Apply the ratios prescribed in Section 401 to the value of the property- determined in paragraph (5) to obtain its assessed value. 439.4. Historical Property; recordation. No property shall be valued pursuant to this article unless an enforceable restriction meeting the requirements of Section 439 is signed, accepted and recorded on or before the lien date for the fiscal year in which the valuation would apply. 21 • Articles Related. to Mills Act Program • • 22 pax ureaKS ravor preservation Glendora uses obscure state la~v to promote landmark protection ~~ sr~ way tExDOw- -city off CiaLs have tapped a littlettsed state law m k;~ taY breaks to owners of historical and important siruc• totes in etcltartge for their prem- ises to presetae the buildings. It s the first time Glatdora has used a Mills Act agreement and the second time that :t has been used kn the east Sera Gabti e' Valley. La Verne started the tread in Los Angeles County in 1992 Glatdora officials also tecastly doubled the nttmba of historita sites here by desig- nating seven properties as tanAmarke The move is drawing praise limn ~nes- peced sourixs "I think it's great VGe weltx~e it" said John De LawTO. president of the Gleadara Preservation Foundation The gtrnlp re• mains in a rnurt battle with Glendora ovEx w(~aftsman htm~ie th~Y tore down a 1910 years age "Maybe this oamol is more preservatioa• minded than the previous one," 1te said. "If they see a need to preserve mote of ota het. that's great" The five owners that entered into a Mt'Ds Act contract last month saved a total of 58.000 in properly taxes. Sirt~ Glendora's share is 1 patjatt ~' that it loses S80 in an- neal property taxes, said ettY planner' M% rhael Yanlo7vkch. Approved for Mills Act agt~aaents were the house at 128 w. Bennett Ave and the office at 120 w. Bennett Ave Both teed to belong to Glertdosa's 5tst city ~'~Y, Ftolf Bidwell Other mntra~s approved were for 330 E. Foothill Blvd.: 139 b1. Pennsylvania Ave.; and 301 £. Meda Ave. The lager had al- ready beery named as a historirai landmark. At the snare time, the city desi~tated the following as historical landmarits: ^ Bidwell home ark ailice. ^ The Veaberg bttiidmg at 111 N. Gltm• data Ave i The Benda home and the venerable oak at 7?A N. Raittboov Drive ^ 1010 E Foothill Blvd. ^ 330 E FoothiIl Blvd. ^ 134 N. Pertnsytvania Ave. Glertdara relied on a state law Brat was rarely treed sine it vows passed in 1976 m encourage owners to preserve histnriC bttilding3 in etcttatt@e for redttciag prvpaty tatoes. Pardctpation is voltmtmy. Owners teed to have to open their homes for public Lotus and were tied to 24vgt oortttacts -provisions that hampered pas- ~CipaL]On These wed deleted ]II 1985. The number of such contracts. has defr nicely incensed. mainly oecatae the word is Setting out said Paige Swartley , a pm ~ gram associate wish the non-pmfit Califor- ~ nia preservation Fbunda>;ors. To dare. 43 ctt• ies have teed it t To be eligible for such a contract the site i rr:•~st e_~ther be listed on the National Regis- ; ter er u_istonc D1ac4s cr on a state cotuttq ~ or cit<• 7tt'icial register. Prvpades located ~ a Natiot.~al Register or local historic district • are also tiahle candidates. I '~;'lE CD1mTy a55ES50r S 0~1Ce rE-35ES525 tax propert5• ~ ?anticipants enter into a 14year cotitract which includes a yearly kn• spection by the ~• to make sure tbe own- ers are sticking to t»*e agreement Ed Celaya said he would have proceeded with preserving the house at ~0 E Foothill Blvd. tvk@i or without the agreement The cir5' considers kris home a good example of the C:zRsman s>Sde of atLhitecnnp.:.~stead of 5LOi4. he will now pert 5643 ~ property ~. ' :'he cin•'s goal really ~vasa't .sty aiffer ent than what we wanted." Ceaya Said. "We wanted to buy ett older home ; ad pre- serve it The Mills Act was sernndary." Tb Mohamed Alameddkne ,who now ~ owns the Bidwell home and office, enterag into an agreement with :he city seemed iklte a good deal -especially with the tae I 6arak Starting nett year, he will ray ~ rasher than S1.4f9 in ptopertp tares fa' the I Bidwel office building Fat the Bidwell horse, he will pay ~ instead of his cur. tent property tax of SlbJB. I ~. • • 23 Staft pftOW by WALT MANClNI ED AND Si15AN CElAYA will have their property taxes. cut by roughly X1.§00 to encourage the preservation of their historic Craftsman dome..