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SR-10-23-2007-1DCity Council Meeting: October 23, 2007 Agenda Item: l .~ Q To: Mayor and City Council From: Eileen Fogarty, Director, Planning & Community Development Subject: Mills Act Historical Property Agreements between the City of Santa Monica and the Property Owners of the Designated City Landmark at 822 Euclid Street and the Contributing Structure to the Third Street Neighborhood Historic District at 2544 Third Street Recommended Action Staff recommends that the City Council adopt resolutions authorizing the City Manager to negotiate and execute Mills Act Historic Property Preservation Agreements (Mills Act Contract) between the City of Santa Monica and the property owners of one designated City Landmark at 822 Euclid Street and one Contributing Structure to the Third Street Neighborhood Historic District at 2544 Third Street. Executive Summary The Mills Act is a state law that enables local governments to enter into contracts with owners of qualified historic properties to authorize a property tax reduction. The Mills Act is one of the few financial incentives available to owners of historic properties and is an important tool for implementing the City's goals, as articulated in the City's Historic Preservation Element, to promote the designation and long-term preservation of historic resources through the provision of incentives and technical assistance. 1 The City requires Mills Act Contract applicants to provide a report prepared by a qualified architect describing the condition of the structure and its restoration and maintenance needs in order to ensure the resource's historic integrity and structural stability. The recommendations in the architect's report are reflected in the proposed 10-year restoration/maintenance plan which becomes an attachment to the Mills Act Contract entered into between the City of Santa Monica and property owners. Staff conducts a site visit to verify the information contained in the report and may identify additional restoration and maintenance items as necessary. Execution of the two pending Mills Act Contracts will result in reduced property tax revenue to the City estimated at $4,046 for the 2008-2009 fiscal year and a similar amount annually thereafter. Discussion Background In 1991, as part of a comprehensive revision to the City's Landmarks Ordinance, the City Council authorized designated structures of merit, landmarks, and contributing structures located in designated historic districts to be considered qualified historic properties eligible for historic property contracts submitted pursuant to the provisions of California Government Code Sections 50280-50290. As a result, property owners of such designated historic properties may file a Mills Act Contract application. 2 Once approved, a Mills Act contract requires the County Tax Assessor's office to determine the value of the historic property based upon its current net operating income, rather than upon the traditional assessed valuation method resulting, in most cases, in a property tax reduction. For residential or commercial structures that are rented, the net operating income is determined based on actual rents received. For residential and commercial structures that are owner-occupied, the net operating income is determined by the income the property would produce if rented. In exchange for a property tax reduction, the owner agrees to protect, maintain and, if necessary, restore the historic property. Under the traditional method of determining property taxes, properties are reassessed when sold. However, since Mills Act contracts run with the property, subsequent owners may realize greater tax benefits, as the assessed property value typically increases when property is sold, resulting in an even greater difference between the property taxes under the assessed valuation method versus the property tax calculation permitted by the Mills Act contract. This can be a significant marketing feature for the property in terms of future sales and are considered an important historic preservation incentive because the property will be maintained. Similarly, the obligations and property tax reduction benefits associated with the Mills Act contract are also binding upon successive property owners during the contract term. The initial Mills Act contract term is a ten-year period. The agreement is renewed automatically each year on the contract's anniversary, and an additional year is added 3 to the contract term. This effectively makes the actual term of the contract at least ten years but possibly indefinite unless the owner or City submits a notice of non-renewal. If such a notice on non-renewal were submitted, the contract would terminate at the end of the then current ten-year term. Alternatively, the owner may petition the City to initiate an immediate cancellation, which would result in payment of a penalty equal to 12.5% of the property's assessed current fair market value of the property, as determined by the County Assessor as though the property were free of the contractual restriction. The City may also cancel the contract in the event of a breach of contract conditions, whereby the property owner would be subject to pay the same 12.5% penalty. Santa Monica Mills Act Contracts In addition to the certified architect's report, financial data is also required as part of the Mills Act Contract application in order to calculate an estimate of the potential tax reduction and provide guidance to the Landmarks Commission and Council in making a decision on Contract requests. The County Assessor will make a final determination of the taxes due when the approved Contract is submitted and recorded, and will continue to conduct property tax assessments on annual basis. Los Angeles County Assessor's Office data showed that for the 2006-2007 tax year, property value assessments of thirty-seven of the thirty-nine Santa Monica historic properties with executed Mills Acts Contracts have been reduced by 12% to 90%, with 4 the average reduction being 51%, when compared to their "Proposition 13" values. From these Mills Act Contract property value assessments, correspondingly lower taxes have been levied on these properties. Each year, the County Assessor will reassess taxes due for properties with Mills Act Contracts. Data for the 2007-2008 tax year has not yet been received from the County Assessor's Office; however, it is anticipated that the average reduction in property taxes will be similar to last year's data, as follows: 2003-2004: 14%-75% reduction with an average reduction of 47%; 2004-2005: 6%-74% with an average reduction of 42%; 2005-2006: 12%-90% with an average reduction of 51 %; and 2006-2007: 12%-90% with an average reduction of 51%. Property owners are required to obtain all applicable entitlements such as a Certificate of Appropriateness, and all associated building permits for work proposed in the ten- year restoration/maintenance plan: Furthermore, all work proposed in the ten-year restoration/maintenance plan must comply with "The Secretary of the Interior's Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring & Reconstructing Historic Buildings" (Weeks & Grimmer, 1995). Property owners are also required to submit a report to the City on a biennial basis to demonstrate compliance with Contract terms. .Staff may also conduct a site visit every other year to ensure that restoration and maintenance plans are implemented in 5 accordance with Contract terms. Analysis The two applications submitted in 2007 include a Streamline Moderne multi-family apartment complex located at 822 Euclid Street and a Craftsman style residence and Contributing Structure to the Third Street Neighborhood Historic District located at 2544 Third Street. In addition to the specific restoration and repair obligations listed below for each property, each Mills Act Contract will include a standard requirement for ordinary maintenance and upkeep throughout the Contract's term for work such as additional roof maintenance, and plumbing and electrical systems maintenance. 822 Euclid Street A Mills Act Contract application was filed orr August 14, 2007 for the Streamline Moderne style apartment building located at 822 Euclid Street. The property was constructed in 1938 by locally significant builder Frank Bivens. Key character-defining features of the primary building include its massing, roof form, curvilinear eaves, corner windows, curvilinear handrails, horizontal bands and fascia, and scored concrete stairwells. The Landmarks Commission designated the apartment building and associated accessory garage as a City Landmark on August 13, 2007. __ As part of the Mills Act application, an architect's report was prepared by the property owner, Gregory Chazanas, AIA. The report assesses the condition of the primary building and accessory garage and identifies repair, restoration/rehabilitation and maintenance needs (Attachment A) along with a schedule for completion of necessary tasks. A site visit was conducted by staff on September 4, 2007. Although the subject property is generally in good condition; the building has suffered from some deferred maintenance over the past several years. The new property owners have proposed a series of significant work items in the first two years of the Contract term in order to protect the integrity of the building and its architectural features. Examples of work proposed during the first year of the Contract include the following • Repair and repaint the building's exterior stucco finish. o Repair and reinforce the building foundation. 7 Repair, refinish and repaint roof eaves, fascia boards and the horizontal wood bands on the building exterior. • Repair, refinish and repaint or replace in-kind as necessary existing wood windows throughout the building. • Resurface and repaint the concrete stairs while still maintaining the scored concrete design details. • Clean and repaint the distinctive metal columns and handrails on the building exterior. • Repair garage doors, and repair drywall and properly cover exposed wood framing for the detached garage structure at the rear of the parcel. Attachment A contains the estimate financial analysis for the property at 822 Euclid Street. 2544 Third Street A Mills Act application was filed on August 15, 2007 for athree-story Craftsman Style bungalow constructed in 1912 located at 2544 Third Street. This residence is a Contributing Structure to the Third Street Neighborhood Historic District which was established by the City on July 24, 1990. The subject residence is both a Contributing Structure to the Third Street Neighborhood Historic District and is also individually noteworthy for its "airplane bungalow" design which features a smaller upper story and a lower story roof form that is characterized by 8 its broad horizontality and deep eaves. Other key features of the residence include its multi-gabled, low pitched roof with overhanging eaves with rafters and beams, its wood cladding, wood-framed fenestration, and wrap-around porch. Proposed Maintenance and Rehabilitation Plan As part of the Mills Act application, a report was prepared by Beckmeyer Carver Architects to assess the condition of the property and its restoration and maintenance needs (Attachment B). The report also proposes a schedule for completion of necessary work. A site inspection was conducted by staff on August 24, 2007. The residence is currently in excellent condition and has been well restored, rehabilitated and maintained by the current property owners since beginning extensive work on the home in 2000. Page two of the attached Architect's Report summarizes the 9 work already undertaken in conjunction with an expansion of the square footage of the residence. The ten-year maintenance/rehabilitation plan includes a list of exterior work recommended during the initial ten-year term of the Contract. The vast majority of work items are scheduled for 2008. These exterior work items include the following: • Repair or replace as necessary shingles on the south side of the residence. • Refinish and seal all existing wood shingles on the exterior of the residence. • Repair existing wood framed windows. • Repair the retaining wall on west side of property. General maintenance items proposed include the following: • Annual inspection and repair of exterior shingles, roof overhangs, wood trim, the building foundation, roof flashing, and the concrete porch. • Annual termite inspection and treatment as needed. • Annual maintenance and repair of masonry finishes. The applicant initially included the construction of a new detached garage with second floor living space as a work item in the draft rehabilitation plan. However staff has advised the applicant that a future construction project on site is not appropriate for inclusion in the work plan for a Mills Act Contract. Therefore, this item has been excluded from the final work plan for the property. 10 Attachment B contains the estimate financial analysis for the property at 2544 Third Street. Commission Action The Landmarks Commission reviewed both Mills Act Contract requests at its September 10, 2007 meeting and directed staff to forward recommendations to the Council in support of both applications. Budaet/Financial Impact Execution of these Mills Act Contracts will result in reduced property tax revenue to the City estimated at $4,046 for the 2008-2009 fiscal year. Similar reductions in property tax revenue to the City are anticipated each fiscal year for the life of the both Mills Act Contracts. However, the amount of revenue loss is not significant in terms of total property tax revenues collected from all properties in the City. A summary financial analysis table is included as Attachment C. Prepared by: Roxanne Tanemori, Associate Planner Approved: Director;'Plarining an~'Cbmmunity Development l,_/ Forwarded to Council: . Lamont Ewell City Manager 11 Attachments: A. 822 Euclid Street: Draft Mills Act Resolution, Architect's Report, Site Photographs, and Financial Analysis B. 2544 Third Street: Draft Mills Act Resolution, Architect's Report, Site Photographs, and Financial Analysis C. Summary Financial Analysis Table 12 ATTACHMENT A 822 Euclid Street: Draft Mills Act Resolution, Architect's Report, Site Photographs, and Financial Analysis Partial attachments are not available in electronic format. Entire document is available for review at the City Clerk's office and the Libraries. 13 GREGORY CgAZANAS, ARCffiTECT 213 S. Linden ]?r. Beverly Hills, Ca 90212 Telephone:310-277-5350 Fax:310-277-7908 E-Mail: Qchazanasla earthlink.net August 28, 2007 REPORT OF EXISTING APARTMENT BUILDING 822 Euclid St. Santa Monica, CA 90403 Scope of Report The intent of this report is to describe the condition of the existing apartment house and a plan for the improvements and maintenance. Prooerty Information and Architectural pescription The primary structure at 822 Euclid Street is a.two-story, wood-frame, Streamline Modeme apartment building with stucco exterior walls and four decorative raised.wood bands a run horizontally along the exterior walls at the windowsill and lintel levels on both the first and second floor The eight unit multi-family residence has a flat roof with wide eaves that extend a few feet beyond the primary elevation. At the comers, of the building, the roof eaves curve, as opposed to having sharp perpendicular edges: On all fourelevations, the soffit of the roof is sheathed with #hree wide strips of flat board that are spaced, roughly, two inches apart creating a gap to amplify the curvilinear form of the eaves and soffit. All four exterior elevations are organized with a pair of horizontal decorative wood bands between the windowsill and lintel at both the ground floor-and the second story. Tonal variation in paint color applied on the exterior elevations highlights the contrasting appearance of the two wide surface bands that run horizontally along the length of the elevation. On the east street-facing elevation and the rear, west facing elevation, comers of the ground and second floor have comer wrap-around windows with four fixed panes divided by wood muntins. The building features wood framed four light fixed windows, four light casement windows, and -other wood frame double-hung, slider and fixed windows found throughout the building. The south elevation provides circulation to the individual units ftom the heavily landscaped south side yard. Originally the yard opened onto EuGid Street, but in February 1999, a high stucco wall with a doorwas added, dividing the yard from the sidewalk. The south elevation is composed of three bays and staircases to access second floor units. There is also an awning supported by iwo tension cables attached to the stucco facade at an angle to shade a unit entry. Each of the staircases features architectural details such as decorated treads and riser and curved handrails that complement and reinforce the overall design concept. At the rear of the property the garages are arranged in a distinctive, stepped U-shaped plan. The nine garages are accessible from 12th Court, which is the alley between Euclid Street and 12th Street. The garage spaces form the outer edge of a large U-shaped concrete driveway. The garages are stucco with wood garage doors with horizontal wood shiplap siding; The garages were part of the original improvement of the property. Architectural Significance The subject property located at 822 Euclid S#reet is an excellent representative example of the Streamline Modeme architectural style as applied to multi-family housing. It has many of the character-defining features of Streamline Modeme architecture in its design. The exterior elevations are dominated by the horizontality of the. windows, the handrails, and decorative stucco banding that runs the horizontal length of the elevations between the window lintels and sill on each floor. Also, while the flat roofs and comer windows derive from Modem architecture, the curvilinearwalls, roof, and handrails clearly anchorthe home in the Streamline tradition. The curvilinear roof eaves, the slender pipe columns and the handrails along the exterior stairs that terminate into the ground in a steep curve rather than attaching to a vertical baluster, are all important character-defining details. As detailed more fully in Attachment D, following the height of Art Deco in the early 1930s, the Streamline Moderne style was an economic and stylistic response to the ravaging effects of the Great Depression. Throughout the 1930s, Streamline Moderne architecture became a relatively common design style for both single- and multi-family housing, commercial, and industrial buildings. Streamline structures continued to suggest modern values of movement and rejection of historic precedents, but. with far less opulence and more restraint than Art Deco of the late 1920s and early 1934s. The Streamline Modeme differed from the "High Art Modem Architecture" of the early 1930s in that it "continued to regard design as `styling' and that architecture should represent or perform as an image rather than be a used as a space to radically change ones everyday life. The boosters of Streamline Moderne argued thattheir purpose was not to create architecture that functioned in the same way as the ocean liner, airplane, or locomotive; rather, the buildings would symbolize those things and therefore remind one of the `modem' future.nl While many people were fascinated with modem buildings that represented progress, such as the movie theatres, service stations, and other commercial buildings, these same people seemed less inclined to give up traditional notions of domestic architecture when it came to their residence. In Los Angeles, both single- and multi-family residential architecture embodied the ideology of Cal'rfornia living. Even though 1930s Los Angeles had more Modem residential architecture than anywhere else in the country, modern 1. Patrick Pascal, Kesling Modem Shuctures Popularizing Modem Design in Southern California 1934- housing was still a small fraction of the total housing built. The majority continued to be constructed using traditional eclectic revival design precedents. Yet, because of the popular appeal of Streamline design, which was centered on fts ability to be both an image of modernity. and decorative, Streamline Moderne housing offered a third choice after traditional and Modem housing. In fact, it was the details of Streamline Moderne architecture with its curvilinear forms, cornerwindows, and pipe handrails that established the style's popularrty.2 EXISTING CONDITIONS AND RECOMMENDATIONS 822 Euclid St. was renovated in the past 10 years and the condition of the building is fairly good, however, there has been no maintenance for the past 3 years, and the proximity to the ocean requires permanent maintenance in an ongoing basis. 1. EXTERIOR The exterior is stucco, and there aze cracks and deterioration on the exterior finish and paint. Stucco needs to be fixed and painted. Cost $15,000.00 2. FOUNDATION WALLS The foundation shows some deterioration, cracks and water damage. It needs to be repaired and maintained on an yeazly basis. Cost $4,000.00 3. STRUCTURAL FOOTINGS AND FOUNDATION The building needs bolting to the existing footings, sheaz panels'/4" plywood on the .periphery and interior footings. Cost $5,000.00 4. WOOD WINDOWS This is an area that needs the most work. The original windows from 1938 or 1939 are in fairly bad shape. They are drying and peeling and the windows do not close properly. The casement closing system needs to be cleaned and repaired. The window frames need to be stripped, sanded, repaired, primed and painted again so that they can close properly.. Possibly some of the window frames might need to be replaced with new ones. Cost $8,000.00 5. HARDWARE Due to the proximity to the ocean, most of the metal parts of the doors closing system, doors, and latches, etc...aze rusting. They need to be repaired, and/or cleaned, or replaced. Cost $4,500.00 6. ROOF The building has a build up roof installed approximately in 1990, so it is probably azound 16 years old. There are areas that show need of repairs, especially at the joints where water settles after it rains. All intersections and edges that aze flashed must be inspected on a yeazly basis and repaired as soon as possible. Cost $5,000.00 7. ROOF OVERHANGS The curvilinear roof overhangs are fairly deteriorated. The previous owner repaired the 3 bands, but presently they are rooting and detaching from the roof rafters. These need to be removed, primed, painted and replaced. Cost $4,000 8. STAIRS, PORCHES, HANDRAILS, AND METAL COLUMNS The stairs have anon-slippery coat that was applied several years ago over the original surface. They are not quite deteriorated and they need to be recoated, as per insurance companies which require non-slippery coats on stairs. The porches are resurfaced with a slate the that needs to be cleaned and re-grouted. The distinctive metal columns and handrails aze rusting and need to be cleaned, sanded and painted with a water resistant coat of paint in order to maintain the historical character of this distinct building. Cost $6,000.00 9. DECKS There are five decks in the first and second floor in the original concrete finish. They show cracks and sepazatiori from the main building. Some of these areas show that they have been repaired in prior years. Because this conditions allows water to penetrate inside the building, and possibly into the footings, it is very important to repair and reseal the decks yeazly and repair them as needed. Cost $3,500 10. DRAINAGE There aze drains in poor condition and they need to be cleaned and repaired to avoid water buildup. Cost $1,500 11. TERMITE DAMAGE AND DRY ROT Termite damage was existing when we purchased the building. A termite report was issued showing infestation in the basement under the building. Some of the work was done after close of escrow. A yearly maintenance program is necessary. It is also necessary to replace some wood that has been attacked by termites. Cost $2,500 12. STRUCTURE The 1994 Northridge earthquake caused modest damage to the exterior stucco and structural systems, footings, piers and walls. According to the September 30, 1995 Historic Resource Inventory Update Report from the City of Santa Monica, all repairs were completed except the wood trim. After purchasing the property , we inspected underneath the structure and we noticed that we need to bolt, reinforce and brace the footings with plywood. Cost $6,800.00 13. EXTERIOR WOOD BANDS The exterior elevations are dominated by prominent horizontal elements, the windows, handrails and wood bands that wrap around the corners. These wood bands aze deteriorating and detaching from the building. The horizontal wood bands need to be stripped, sanded, reattached to the building, waterproofed, primed and sanded or replaced as needed. Cost $4,500.00 14. LANDSCAPING At the close of escrow, we were informed that for the last 3 months, there had not been a gazdening service maintaining the landscape of the building. When we took possession of the building, the landscape was quickly deteriorating. Sprinklers were not working, and the outside electrical lights were not working at all. To improve the landscape, new dirt, fertilizer need to be brought to enrich the soil, and. new plants aze need to fill in the azeas where previous plants burned or died because of lack of water. Also, the sprinklers need to be fixed, as well as all the garden lights. On the north side of the building, there is a walk way that has no landscaping, 15 new trees and ground coverage is required. Cost $6,500.00 15. GARAGES There are 9 existing gazages for 8 apartments and several storage areas attached to the garages. The laundry roon has been finished with drywall, however, the garages and storage areas have 2" * 4" exposed framing, no drywall, and some of the ceiling drywall is falling down. The 9 gazage doors are in need of repairs, some need their doors to be fixed and/or replaced. The storage spaces need to be insulated and dry walled, and new hardwaze needs to be installed. Cost $12,500 16. ELECTRICAL AND PLUMBING The electrical and plumbing systems appear to be working properly: There are new electrical panels with new wiring in each apartment. The plumbing is copper, but it is old and needs repair periodically. The water heater needs maintenance and copper pipes need regulaz maintenance. Cost $2,000.00 17. WINDOW SCREENS AND TURBINE FANS None of the apartments have window screens.- New window screens will be manufactured for all the units. Also non-electrical turbine fans will be installed in the roof in order to remove the hot air from the attic. Cost $3,500.00 Landmarks Commission Meeting September 10, 2007 Item #11-A -Consideration of Mills Act Contract Applications for Designated Landmarks and Contributing Structures to the Third Street Neighborhood Historic District 822 Euclid Street Attachment B -Proposed 10-Year Maintenance Plan and 10-Year Rehabilitation Plan GREGORY CHAZANAS, ARCHITECT 213 S. Linden Dr. Beverly Hills, CA 90212 Telephone:310-277-5350 Fax:310-277-7908 E-Mail: ~chazanas(a~earthlink.net August 28, 2007 10-YEAR MAINTENANCE PLAN 822 Euclid Ave. Santa Monica, CA 90403 Scope: This report is to itemize a checklist of recommended regulaz maintenance tasks necessary to preserve the historical aspects and integrity of the building on a long term basis. ITEM YEAR TASK ESTIMATE 1 Annually Inspect exterior stucco and repair, as needed $2,500.00/yr 2 Annually Inspect for cracks and damage to foundation. Repair 1,000.00/yr 3 Annually Inspect and repair footings and foundation 750.00/yr 4 Annually Inspect and repair wood windows & doors 3,000.00/yr 5 Annually Inspect door and window hardware 2,500.00/yr 6 Annually Inspect and repair roof 1,000.00/yr 7 Annually Inspect and repair roof overhangs 1,500.00/yr 8 Annually Inspect and repair stairs, porches, handrails and metal colums 3,000.00/yr 9 Annually Inspect and repair decks, and reseal. 3,500.00/yr 10 Annually Clean and repair drainage 1,500.00/yr 11 Annually Inspect and repair for termites and dry rot 2,000.00/yr 12 . Annually .Inspect and repair structural frame 2,500.00/yr 13 Annually Inspect and repair exterior wood bands 1,500.00/yr 14 Annually Maintain landscaping, imgation system and landscaping lighting, gardening 3,000.00/yr 15 Annually Inspect and repair 9 gazages, and storages 1,500.00/yr 16 Annually Maintain and repair electrical and plumbing 5,500.00/yr 17 Annually Maintain and repair window screens and turbine fans, smoke detectors, etc... 2,500.00/yr 18 Annually Rent control fees, business license 1,500.00/yr 19 Annually Inspect and maintain fire extinguishers 500.00/yr TOTAL $40,930.00lyr P o. np C-091fi71 K~~-'> At n AL\FU~ GREGORY CHAZANAS,ARCHITECT 213 S. Linden Dr. Beverly Hills, CA 90212 Telephone: 310-277-5350 Fax: 310-277-7908 E-mail: gchazanasnearthlink.net August 28, 2007 10-YEAR REHABILITATION PLAN 822 Euclid St. Santa Monica, CA 90403 Scope: This report is to itemize a checklist of one-time rehabilitation or restoration tasks necessary during the next 10 years to preserve or correct the historical aspects and integrity of the building on a long-term basis. ITEM YEAR 1 2007 2 2008 3 2008 4 2008 5 2008 6 2008 7 2008 8 2008 9 2008 10 2008 11 2008 12 2008 13 2008 14 2008 15 2009 16 2009 17 2008 TOTAL TASK ESTIMATE Repair exterior stucco $15,000.00 Repair exterior foundation wa115 5,000.00 Repair structural footing and foundation 5,000.00 Repair wood windows, sashes, casement operators 8,000.00 Repair hardwaze hinges and latches 4,500.00 Repair roof 5,000.00 Repair roof overhangs, as needed 5,000.00 Repair stairs, porches, handrails and metal columns 6,000.00 Repair and reseal decks 3,500.00 Repair and replace drains, as needed 1,500.00 Repair dry rot and maintain building free of termites 3,750.00 Repair all structural .cracks 6,800.00 Repair and maintain exterior wood bands 4,500.00 Replant, repair sprinkler system, fix lighting in garden 6,500.00 Repair garages and storage azeas, drywall 12,500.00 Repair copper plumbing, new water heater 4,500.00 Install new window screens and turbine fans 3,500.00 $100,550.00 ~ ~'- ~.Ut, ~~'_ '~ ~~, r ~~ ~ ~ ,. ~ ~~ ~ ~. ~~, r ATTACHMENT B 2544 Third Street: Draft Mills Act Resolution, Architect's Report, Site Photographs, and Financial Analysis Partial attachments are not available in electronic format. Entire document is available for review at the City Clerk's office and the Libraries. 14 BECKMEYER CARVER ARCHITECTS 5659 Berkshire Drive, Los Angeles, CA 90032 Telephone 310.251-2184 Fax 310-398-9919 E-Mail kurtbeckmeyer@hotmail.com August 6, 2007 REPORT OF EXISITNG HISTORIC HOUSE 2544 3rd Street &238 Ocean Pazk Blvd. (combined) Santa Monica, CA 90405 Scope of Report The intent of this report is to generally describe the condition of the existing house and a plan for its renovation and maintenance. General Description The existing structure is a 1912 three-story Craftsman residence located on the northwest comer of Third Street and Ocean Park Boulevard. This building type is known as an "airplane bungalow" due to the fact that its upper story is smaller than the lower story, with exaggerated roof overhangs that create "wings" spreading out horizontally suggesting a cockpit on an airplane. At the time the building was inventoried in 1993, it received a NRHP status code of 3S, which means that the property was National Register eligible (see attached Inventory Sheet). Characteristic features of the design include amulti-gabled; low-pitched roof with extended rafters and beams in the overhanging eaves; an L-shaped porch wrapping the facade and northeast corner; stone on both chimneys; andbands of windows in rows of rectangular panes along the upper story. The original builder of the residence is unknown. The original owner of the house is unknown and it is a contributing structure to the Third Street Neighborhood Historic District, and potentially eligible for listing on the National Register of Historic Places. The subject property consists of an irregulazly shaped lot [49.88' x 129.71' (left side and 119.71' (right side)]. This 8,090 square foot parcel is located in the OP2 (Ocean Pazk Low Multiple Family Residential) District. With the exception of some small strips of designated pazkland, all parcels surrounding the subject parcel are developed with multi-family residences and aze zoned OP2. -1- Recent Actions In 2000, the applicant applied for and obtained VAR 00-019 to allow expansion of the existing home. The existing basement (422 s.f.) and crawl space (710 s.f) were converted to habitable space (therefore counting as a story), and were expanded by 286 s.f., for a total of 1418 s.f. on the lowest level. Other additions included: a total of 66 s.f. added to the second floor level (for a total of 1226 s.£); and 184 s.f added to the 290 s.f. third floor level (for a total of 474 s.f.). New deck areas totaling 402 s.f. were added to the existing 260 s.f. deck azeas, for a total of 662 s.f. of deck area. A Certificate of Appropriateness No. LC-CA-00-005, was approved for this work under the Third Street Neighborhood Historic DistricYDesign Guidelines and the Secretary of Interior's Standards for Rehabilitation to rehabilitate the home which is a contributing structure to the Third Street Neighborhood Historic District. The following items were repaired, restored, and /or replaced: the foundation, wood shingles, chimney, windows, and basement. The following additions were also approved and constructed: A block fence with river rock pilasters, a 350 square foot deck at the reaz of the house, two small additions totaling 66 squaze feet on the north side of the house, a 52 square foot deck and 184 square foot addition on the second floor, and a wood-framed exterior staircase along the side elevation. More specifically, rehabilitation of the following were undertaken: 1. Removal, cleaning, and re-installation of the river rocks on the two chimneys and porch columns. 2. Rehabilitation and/or replacement of the redwood shingles. If a means to clean and repair the existing redwood shingles is not available, deteriorated shingles will be replaced with new shingles cut to match the existing. 3. Reglacement of the existing foundation. As part of the foundation repair, the house will be raised and moved two feet northwazd to allow for a driveway along the sideyard. This new foundation will not affect the exterior elevations. 4. Repair and/or replacement of the existing windows. Windows will be repaired and restored where possible. In the case of windows which have been replaced with aluminum framing, new wood windows will be replaced to match the original window configurations (e.g., paned, casement and double-hung). And, new additions were approved and constructed: 1. First Floor: a 40 squaze foot cantilevered addition to the kitchen along the north side; a 26 square foot cantilevered addition to the utility room along the north side; a 350 square foot open, wood-framed deck at the reaz of the structure; and awood-framed staircase along the northern sideyard which leads from the basement to the first floor level. 2. Second Floor: A 184 square foot addition to the second floor (master bedroom suite), and a 52 squaze foot deck off the bedroom at the rear of the house. 3. Site Improvements: Anew Craftsman-style fence with stone pilasters and stucco walls along the Ocean Park Boulevard sideyard. A wooden fence along the reaz and southern. sideyazds were also constructed. -2- EXISTING CONDITIONS AND RECOMMENDATIONS Inasmuch as the home was extensively renovated and restored in 2001, its general exterior condition is good, however its natural finishes and their proximity to the ocean will requires further restoration at this time and intense maintenance on an ongoing basis. SHINGLES Existine As mentioned above, the home's origina136" redwood bam shingles were deteriorated and replaced in 2001. Except where interrupted by stone or trim or foundation walls, all exterior vertical surfaces are protected by these shingles, which aze essentially untreated. Recommendations • Each year, the exterior shingles on the building should be inspected, and appropriate measures taken for their preservation. • Many, if not most, of the shingles on the south side are in need of major repair or replacement. • Depending upon their exposure to deteriorating effects of sun and salt air, many other shingles need loving caze. • All shingles are in desperate need of preservative treatments carefully researched for this particulaz applications. WOOD TRIM Existine The 1x6 and 1x4 exterior wood casing window and door trim were also replaced during the 2001 restoration. This trim occurs at all exterior openings. Recommendations • Similar to the needs of the shingles, this wood material is vulnerable to the effects of sun and salt air; and after a thorough inspection, many components need refinishing at this time, and all will need repainting regularly. FOUNDATION WALLS Existine The foundation walls consist of a skim coat of stippled gunite simulating a stone treatment. Recommendations • Annual inspection is necessary for signs of cracking or spallation. • Restorative repair should be undertaken immediately upon discovery of such conditions inasmuch as deterioration should not be allowed to continue. -3- ROOF OVERHANGS Existine The roof overhangs on both the eaves and rakes aze exaggerated as is typical with the Craftsman "Airplane Bungalow" style. The undersides of these elements show their exposed and extended rafter tails and structural outrigger beams which are covered on their tops with lx resawn T&G wood boazds. These components are all painted. The roof edges are temunated with a galvanized edge metal. Recommendations • While the underside of the overhangs are well protected and therefore likely to weather substantially better than the surfaces exposed to the elements, annual inspection and paint touch up needs to be administered in order to prevent serious deterioration. • Even though the undersides of the overhangs aze well protected, the extended beams and rafter tails are extremely vulnerable components due to the daily exposure to dew and sun, which promotes dry rot. Qnce this process begins, it is very difficult to arrest and most frequently results in slipshod patchwork repair. The zecommended method of preserving these very important design elements is the addition of copper caps atop each of the members so exposed. Each of these caps needs to be broken and soldered along the edges to create vertical legs of at least 3/a". ROOFING Existine The surface of the roof is finished with dimensional composition shingles suggesting wood shingles. Recommendations • The roof general has a number of years of life left in it, but there aze azeas that aze subject to heavy concentrated runoff and need to be watched closely in order to avoid major damage caused by roof leaks. • All intersections and edges that are flashed must be inspected regularly to detect rusting or rotting in a timely manner. Any such deterioration must be repaired. PORCHES Existin The porches have exposed concrete surfaces to match the appearance of the original concrete. Recommendations • The concrete surfaces are in good condition, but signs of cracking need to be monitored, especially where those surfaces occur over interior spaces. All cracks discovered need to be repaired by an expert who is sensitive to the need to maintain the chazacter and appearance of the home. -¢- DECKS Existine Simulated concrete decks occur on the middle and upper levels of the west side of the house, and occur over interior spaces. Some have already shown evidence of separation and cracking, and those azeas have been repaired. Recommendations • Because these conditions occur over interior spaces, it is of utmost importance that the seal be maintained intact continually. It is important that even minor intrusion by moisture be prevented totally. It is best, therefore, to enter into a regulaz program of sealing these surfaces every yeaz or two. • The drainage from these decks is also critical, and any blockage would create major water damage interior of the house. It is necessary, therefore, that the drainage systems of these decks be inspected prior to the rainy season every year in sufficient time to make any repairs necessary ahead of the rains. RAILS ExiSting They aze bounded by a rail system composed of heavy wood timbers and deck trim, with the timbers turned on their sides. These members were also replaced in 2001 to match the original. The wood rails are painted. Recommendations • Similar to other areas of wood trim, these components need to be properly prepazed and painted immediately upon finding any cracks or peels, especially at the joints. WINDOWS AND DOORS. Existine These components of the building aze a blend of the original units and new units circa 2001. Both are wood frame to maintain the consistency of the style. Some of the units are in need of operational repair and some in need of structural repair. Neither is severe. In some cases, screens are missing or loose. Recommendations • Sash balances, casement hinges, casement operators, and casement latches need to be replaced as necessary. • Where the units themselves are beyond reasonable repair and maintenance, they may need to be replaced by authentic and accurate custom units that match the existing in all details. • In addition to the protection from bugs and vermin that the window screens provide, they also serve as an excellent additional layer of protection from the climatic elements. Where possible, wood frame screens are the preferred type, however, the existing aluminum frame screens are -5- satisfactory. Consider using a dazk anodized frame however, to bring less attention to the screen itself. Better yet, consider using Hollywood retractable screens. • Several oak thresholds are heavily weathered and aze in need of restorafion or replacement. Heavy application of marine varnish aze needed to adequately protect them. EXTERIOR EMBELLISHMENTS Existine Additional exterior embellishments include the restored river rock chimneys, which were completely dismantled, cleaned and reinstalled in 2001 to match the photographic documentation reseazched prior to demolition. Chimney caps appeaz to be missing. Period door and window hazdwaze provide the final touches of style. Recommendations • A qualifl ed mason should inspect all the masonry elements annually and repair or repoint any problematic areas. • While there were no signs of efflorescence at the time of this report, such mortar problems should be idenfified and replaced along with the annual inspection by a mason. • Properly designed and aesthetically appropriate chimney caps should be installed. • The weather in this climate corrodes hardwaze, which will need to be replaced or repaired from time to time. As replacement occurs, higher quality components will holdup better than items of lesser weight and. quality. Polished finishes should be avoided. Copper, bronze, or dull brass will weather better. TERMITES Existin Not atypical to structures in Southern California, this house is especially vulnerable to the attack of termites, and evidence of ternute activity is present at this fime. Recommendations • Immediately acquire a ternute report from a certified extermination company and perform the recommended service. • An annual maintenance program is needed whereby inspections an follow up treatment take place every year to control the unavoidable nature of this pest. SITE FEATURES Existine The property line boundaries are identified by a concrete block wall; which is articulated by river rock pilasters with concrete caps and planter areas between. These walls are taller along the sides and low in the front. Both vehicular gates and pedestrian gates are painted wood. The fence along the south property line is primarily wood and needing repair. The property line -6- fence/wail along the west side is incomplete, apparently awaiting the construction of a Garage. Site drainage is very positive from the east to the west, however more complex collection basins and pumps have been installed in the northwest area of the property. Recommendations • The block and river rock walls are in good shape and quite durable. Minor maintenance will insure their longevity. • The plant material is mature and normal landscaping with regular rotation and replacement will preserve the property satisfactorily. • The wood fence along the south side has the hint of an afterthought, and as a long term solution, a block wall with river rock pilasters similar to the others would be an improvement both aesthetically and functionally. • There are unsaflsfactory retaining conditions along the west property line that need repair to prevent runoff into the adjoining property. For efficiency purposes, this should be undertaken along with the construction of a future Garage. • The catch basins and pump systems must be inspected at least annually and maintained fully operational at all times. Inasmuch as the property has excellent slope and the street is immediately available for the discharge of runoff, consider the replacement of the pump system with a passive gravity flow system. This requires the integration of all City requirements and approvals. GARAGE Existine None. Recommendations • The property is incomplete without a Garage, and the incorporation of a combination Garage/2°d Floor living space would be entirely appropriate. ELECTRICAL, PLUMBING AND HVAC Existine These components of the building were upgraded and improved during the major renovations of 2001, and they are currently in good condition. The HVAC system is ahigh-velocity system installed to minimize the intrusion of conventionally-sized ductwork thereby maintaining the architectural integrity of the building. Period light fixtures are important to maintain the faithful continuation of the style and some aze showing sides of excessive corrosion. Recommendations • All existing circuits need to be accurately traced and labels at their breakers. • Confirm proper strapping and venting of water heater. • Establish a regular maintenance /repair program for all HVAC systems. The high velocity system must be maintained by a qualified service company experienced in these systems. -7- • As previously mentioned, the weather in this climate corrode the metal light fixtures, which will need to be replaced or repaired from time to time. As replacement occurs, higher quality components will hold up better than items of lesser weight and quality. Polished finishes should be avoided. Copper, bronze, or dull brass will weather better. -8- Landmarks Commission Meeting September 10, 2007 Item #11-A -Consideration of Mills- Act Contract Applications for Designated Landmarks and Contributing Structures to the Third Street Neighborhood Historic District 2544 Third Street Attachment B -Proposed 10-Year Maintenance Plan and 10-Year Rehabilitation Plan BECKMEYER CARVER ARCHITECTS 5659 Berkshire Drive, Los Angeles, CA 90032 Telephone 310-251-2184 Fax 310-398-9919 E-Mail kurtbeckmeyerC~hotmail.com August 6, 2007 10-YEAR MAINTENANCE PLAN 2544 3rd Street &238 Ocean Park Blvd. (combined) Santa Monica, CA 90405 Scope: This report is to generally itemize a checklist of recommended regular maintenance tasks necessary to preserve or historical aspects and integrity of the building on a long-term basis. ITEM YEAR TASK ESTIMATE 1 Annually Inspect exterior shingles and seal! refinish as required. $2,000/yr 2 Annually Inspect, prep, repaint, all wood trim in need of repair. 5,000/yr 3 Annually Inspect for cracks and spallation in foundation. Professionally repair. 500/yr 4 Annually Inspect underside and extensions of overhangs. Repair or repaint as required. 5,000/yr 5 Annually Inspect roof membrane and reinforce or repair as required. 500/yr 6 Annually Inspect roof flashing. Repair or replace areas of excessive corrosion. 500/yr 7 Annually Inspect concrete porch surfaces and properly repair as required. 500/yr 8 Annually Inspect deck membranes. Repair by certified contractor as required. Alternately reseal annually. 2,000/yr 9 Annually Inspect, unclog, repair all roof deck drains frequently. 200/yr 10 Annually Inspect wood railings and edges. Properly prep and reseal as required. 1,500/yr 11 Annually Inspect masonry finishes. Repair or repoint as required. Replace mortar showing signs of effluorescence. 1,000/yr 12 Bi-annually Inspect door and window hardware. Replace or repair. 1,000/yr 13 Annually Incorporate a program of temute inspections. Make recommended repairs. 1,000/yr 14 Annually Monitor condition of site river rock walls. Repair as required. 500/yr 15 Annually Monitor condition of plant materials and imgation system and repair as required. 2,000lyr 16 Annually Monitor condition and proper operation of sump system at northwest comer of property and repair as required. 500/yr 17 Annually Professionally inspect high-velocity HVAC system. Provide routine and special maintenance as required. 500lyr TOTAL $24,200/yr -~- BECKMEYER CARVER ARCHITECTS 5659 Berkshire Drive, Los Angeles, CA 90032 TelephoneSlO-251-2184 Fax 310-398-9919 E-Mail kurtbeckmeyer@hotmail.com August 6, 2007 10-YEAR REHABILITATION PLAN 2544 3rd Street &238 Ocean Park Blvd. (combined) Santa Monica, CA 90405 Scope: This report is to generally itemize a checklist of recommended one-time rehabilitation or restoration tasks necessary during the next 10 years to preserve or correct the historical aspects -and integrity of the building on a long-term basis. Those items of a more urgent nature aze assigned earlier dates. ITEM YEAR TASK ESTIMATE 1 2008. Repair/replace the shingles on the south side as required. $10,000 2 2008 Refinish /seal /preserve all existing bam shingles with appropriate material. 10,000 3 2008 Add copper caps to exposed rafter tails and beam extensions. 5,000 4 2008 Repair broken casement operators, sash balances, hinges and latches. 5,000 5 2008 Repair irreparable sashes. 5,000 6 2008 Repair window screens as necessary. Add where missing. Recommend considering Hollywood screens. 8,000 7 2008 Repair or replace rotted oak thresholds. Varnish well. 2,000 8 2008 Design and install code-complying chimney caps appropriate to the style. 4,000 9 2008 Replace irreparable replica door and window hazdware with authentic heavy duty, high quality bronze or dull brass or copper.. 8,000 10 2008 Obtain termite report and make necessary repairs. 2,000 11 2008 Address problems with wood fence on south property line. Consider using block /. river rock wall to match north. 8,000 12 2008 Repair west retaining wall. Coordinate with Garage (Item #14). 8,000 13 2010 Investigate alternatives to the sump system at the northwest corner of the property. Passive gravity system is preferred.. 8,000 14 2009 Add detached Garage and 2nd floor living space.in the southwest corner of the property.where the original once stood. 125,000 15 2008 All existing circuits need to be accurately traced and labeled at their breakers. 1,000 16 2008 Confirm proper strapping and venting of water heater. 500 17 2010 Replace deteriorated and corroded light fixtures with heavy duty copper fixtures. Preferably authentic restored period fixtures. 5,000 18 2012 Replace water heater. Consider using tankless unit concealed. 3,000 19 2012 Major HVAC repair. 5,000 TOTAL $222,500 -~- Landmarks Commission Meeting September 10, 2007 Item #11-A -Consideration of Mills Act Contract Applications for Designated Landmarks and Contributing Structures to the Third Street Neighborhood -Historic District 2544 Third Street Attachment C -Estimate Financial Analysis Spreadsheet ESTIMATE FINANCIAL ANALYSIS FOR MILLS ACT CONTRACT** 2544 Third Street, Santa Monica, CA REVENUES Current 1) Est. Monthly Rentallncome 3% $4,500 2) Annual Rental Income .$54,000 ANNUAL EXPENSES Gen. Expenses: 25%SFD, Others 30% $13,500 Vacancy loss 3% $1,620 8) Total Expenses $15,120 (Sum Lines 8-9) NET OPERATING INCOME (NOI) $38,850 (Line 2 Minus 8) CAPITALIZATION RATE 9) Interest Component 5.5% 10) Historic Property Risk 4% (2%, or 4% for SFD) 11) Property Tax Component 1% 12) Amortization Component 0.5% 13) Capitalization Rate 11% (Sum Line 9 - 12) TAXES 14) Mills Act Assessment $353,455 (NOI/ Line 13) 15} Tax Under Mills Act $3,659 (Line 14 X .01035146) 16) Current Tax $8,027 17) Tax Savings (Line 16 -Line 15) $4,368 18) Annual Costs to City (Line 17 X 16%) $699 **This worksheet provides only an estimate analysis. The County of Los Angeles Office of the Assessor is responsible for calculating official Mills Act property tax assessments each year. Landmarks Commission Meeting September 10, 2007 Item #11-A -Consideration of Mills Act Contract Applications for Designated Landmarks and Contributing Structures to the Third Street Neighborhood Historic District 2544 Third Street Attachment D -Property Photos 28.JPG Narn~ IMG_0123.J PG Name IMG_0129.J PG y _. Name: IMG_07 7 9.JPG Name: IMG_0112.JPG Narne: IMG_4241.J PG Name: IMG_4235.JPG Nane: Name: IMG_4304.JPG ATTACHMENT C Summary Financial Analysis Table Electronic version of attachment is not available for review. Document is available for review at the City Clerk's Office and the Libraries. 15 Attachment C 2007 -- SUMMARY OF ESTIMATE FINANCIAL ANALYSIS FOR MILLS ACT CONTRACTS** Property Est. Assessed Current Tax Est. Tax Est. Mills Act Est. Reduction in City Revenue City Revenue City Revenue Address Value (MILLS (Prop. 13) (MILLS ACT) Tax as a % of Property Tax (Prop. 13 (MILLS ACT) Reduction ACT) Current Tax 822 Euclid Street $1,178,753 $33,124 $12,202 36.8% -$20,922 $5,300 $1,952 ($3,348) 2544 Third Street $353,455 $8,027 $3,659 45.6% -$4,368 $1,284 $585 ($699) **This worksheet provides only an estimate analysis. The County of Los Angeles Office of the Assessor is responsible for calculating official Mills Act property tax assessments each year.