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PCD SF KG AS DJ f lplanlsharelcouncillstrptlmillsaet #2
Counc~~ Mtg- April 44, 1998 Santa Monica, Gaiiforn~a
TO Mayor and C~ty Council
FROM City Staff
SUBJECT Recommendation to authorize the City Manager to Negotiate and Execute
a Mills Act H~storical Prop~rty Contract between the Caty of Santa Monica
and the Property Owner of 2402 Fourth 5treet, #6, lacated in Hollister
Court, a designated City Landmark Applicant Debarah Levm
INTRODUCTION
This report recommends that the C~t~ Council adopt a resolutian and authorize the City
Manager to negotiate and execute a Mills Act H~storical Properky Contract between the
C}ty ~f Santa Monica and the propsrty ~wner of 2402 Fourth S#reet, #6 locatsd ~r~
Hollister Court, a des~gnated G~ty ~andmark The M~IIs Act ~s a state law er~abl~ng loca!
governmer~ts t~ er~ter mto contracts w~th owners of qua~~fied h~stQr~c proper#~es tv
authorrze a praperty tax reductron Thrs rs the second M+IIs Act cor~tract consrdered by
the City The ~ropased resalut~on is cantamed in Attachm~nt A and the M~fis Act
appi~cation ts contained ~n Attachment B
BACKGROUNQ
In 1991, as part of a compreh~ns~v~ re~~sion to the City's Landmarks Ordinance, the
City Council author~zed designated structures a# merit. kandmarks, and cantributing
structures locatec! in dasignated h~staric districts ta be considered "qualified historfcal
praperties" eligible for historical property contracts submitted pursuant to tl~s pravisians
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+`t: ~ I ~ i~r.J
of Calrforrna Ga~ernment Cade Sectrons 50250-5~290 As a result, property flwners
of such des~gnated histor~C propert~es may file a Mills Act Contract Application Once
approved, a M~fis Act contract requ~res the County Tax Assessor's offEee to determine
tF~e va~ue of the histnr~c property based upon its current net aperating income, ratF~er
than upon the trad~t~ona~ assessed valuation method, resulting ~n a property tax
reduction For owner-occupied structures, the net operatmg income js determ~ned by
the ir-come the property would produce if rented 1n exchange for the property tax
reduction, the awner agrees to protect, ma~ntain and, Gf necessary, restore the histonc
property
Under the tradit~onal method of tietermErnng property taxes, properties are reassessed
when sold However, smce Mills Act cvntrac#s run w~th the property, subsequent
owr~ers may rea~~ze greater #ax ber~etr#s, as tne assessed property va~~e typ~cally
Encreases when property ~s sold, result:ng En ar~ even greater difference betwee~ the
property taxes under the assessed valuatran method versus the property tax calculat~on
permitted by the Mt~ls Act cantract Tt~~s can ~e a scgnificant market~ng featc~re for the
property in ferms of future sales and is cvnsidered an ~mportant historic preservation
incent~~e because the property wilf be maintained
The ~nEtial M~IIs Act contract term ~s ten years However, each year on the anniversary
of the cantract's effectE~e date, an additional year ~s added to the contract term ~nless
the property awner or the C~ty submits a notice of non-renewal to the other pa~ty m a
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tjmely manner EfFectively, the actual term of the cantract is at least ten years, but may
be indefinEte, as it is automat~cally annually renewed
ANALYS IS
The pro~erty owne~ vf 2402 Fourth Street, #6 has ~equested to enter into a Mills Act
contract to ofFset the cost of normal ma~ntenance and repaars The M~IIs A~t contract
sav~ngs wo~ld be us~d for continued mamtenance af building details which are integral
to the pro~erty's historic integrity, including paEnting, roo~mg and electrical work, as well
as repairs to gutters, doors, windows, porches and other architectural featur~s
T~e mamtenance plan for th~s property as inciudec~ m the M~IIs Act appl~cat~on and will
be ~ncorporated ~nto #he M~!!s Act con#ract The ma~ntenanee plan prov~d~s a k~st of
pro~ec#s ta be completed ~y ihe property owner dt+r~r~g ths m~t~al ten year con#ract term
In add~tron, the applrcatron prowdes an estimate o€ the property owner's tax savrr~gs as
well as an estimate of t#~e City's annual costs due to the pro~er~y tax reduction Srnc~
th~s est~mate rs based on fmancial data subm~tted by the applicant, the County
assessor will ~erify the caiculation prior fo the f~~af tax assessment By execufmg the
contract, the City does not carraborate the applicant`s subm~tted finar~ciai statement,
t~ut au#horizes tax abatement for the property
LANDMARKS COMMI~SION REVIEW
The Landmarks Comm~ssion rev~ewed this request at its February 4, 1998 meet~ng and
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directed Staff to forward a recommendation to the Counc~l supporting the appficat~o~
The Mills Act is one o~ the f~w f~nancial incenti~es available to owners of histar~c
properties and is an important tool in the Commission's efforts to encourage the
designation and long term preservat~an of the City's historic resources
BUDGETIFISCAL IMPAGT
Execution of this MElls Act contract would result m reduced property tax revenue ta the
City The actual amount of the tax reduct~on is determ~~ed by the Los Angeles County
Assessor, based on an evaluat~on of ~he warksheet provided w~th the application. The
current annual ~aroperty taxes for th~s property are approximately $3, 9 30 00 Although
the appl~catror~ states that the anr~ua! cost to the Gity in lost #ax reven~e wo~ld beg~n at
$175 00 ar~d tncrease at a rate ~~s# below 2°fo each year, the act~aal re~enue loss ~s
sub~~ct to revrew ar~d determ~t~at~on by #he County Tax Assessor once ti~e confract has
been executed and r~card~d wrth the County
RECOMMENDATfON
it is recommended that the C~ty Counc~l ado~t the attached resalution and author~ze the
C~ty Manager to execute an Historica! Property Preservation Agreement uncler t~e Mills
Act, betwsen the C~ty of Santa Manica, and the property owner of 24a2 Fourth Street,
#6, located ~n Hollister Gourt, a des~gnated City Landmark
_ ~ _
Prepared by Suzanne Frick, Director
Karen Gins~erg, Planning Manager
Amanda Schachter, Senior Planner
Donna Jerex, AssocEate Planner
City Plannmg Division
Planning and Community Development Department
Attachments A Mills Act Resalution
B Mills Act Contract Applicatian
F 1PLAN15HAREICOUNCILISTRPTWIiLLSACT #2
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ATTACHMENT A
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ATTACHMFNT B
,~
k + ~' ~ ~
~~
Ciri~ af
Santa Monica
Plamm~g and Co~nmumty De~elopment De~artment
~ Citv Plaruung Dr~~ision
(310) 4~8-8341
MILLS ACT CUNTRACT APPLICATI~N
(Please Ty~e or Print All Information)
App]ica~qn N~~81r (s)
Lll 14~
- PROJECT ADDRESS ~ ~~~
Fi3ed f0Ynt111~1 ?1~~~~4$ ~~IW<<~~
F~ Nj~- ` ` '
Receipt
By ~sT
~} ~~' S-~r e t "~" ~`'(D
;~ Land Use Element District Zon~ng District
Legal Description (Lot, Block, Tract} ~t ~ L~" ~,(4G~ G~ ~~ j~~~
~ -1 Legal Descrip#ion {Book, Page, Parcel #) ~~~a q` ~ ~ ~ ~ ~C~ ~ ~ "~~~ ~i ~
~[Please attach copy of legal descnption Generally this is "ExIubit A" on a Dee~ ]
. ,,1` E ~ .
r ` APPLICANT ,/
~" ;~~,~~ Address ~~~ `~''f~ C ~ ~~ Phane :~I~ ~~a -~ ~77~
`v ~
Santa Monica Bustness License No
CONTACT PERSON
~ Address ~Y 'e ~~'r~. ~ ~t',n Phone 3 ~'~ ` ~ ~7- - ~ ~ 7 ~o
5~.~ N~,~,4 ~~ ~f~
~~~~ ~
~ Santa Momca Busmess L~cense No
DESIGNER/ARCHITECT
;
Address Phone
Prafessional L~cense Number
. Santa Mon~ca Busmess L~cense No
ATTORNEY
~ Address Phone ,
Santa ~Vlonica Bjasiness License No
PROPERTY OW'.~TER
'~C ~~r~. ~ V~~~ ~ I Phone ~ f ~" ~Sa~ ~~ I,~
Address
~~,~ ~;_i ~> i ' f~Z. ~~" ~p~/~ r"
! ~
I Certifi- that this application is bemg made w~~ trtv consent
PROPERT'Y OW'1VER'S SIG1~ATiJRE ~-` `~~~'~~~~
Ex-snng Use of Propert~~ I'-F 5'~- y~rr'-~r't'{ Y~ ~"~-- ~^~~-
~ '; 4
' .~ ~~z .. ~ ~
~~.
,
^_ ~ Date o#' Local Deszgnat~on l~ ~~ ~~ ~~
3
j Is the propert}~ designated as part of an htstor~c district"~~e5 If so. what dismct?
Is the proper[y listed on the Nat:ona] Register of Historic P~aces~ Yes '~ No
. /
Is the property listed as part of an histonc distnct~~~ ~ If so, wliat distnct?
~ ~{ ~ Please also attach ~
1 A restorahonlrehabilitation plan for the designated histonc properiy, ~f the buulding is
already restared and in good cond~t~on, a maintenance l~st must be suhm~tted to support
the need for ta~c relief
2. A cost eshmate of the restoration/rehabilrtat~on ptan from a cert~fed arc~utect
~ 3 A completed ~inancial Analysss of Mills Act Contract fnrm
4 Pl~otographs of all building elevarions and character defirnng features using 35 mm black
~ and wtute film
.~ - s;
~-~ I certify that the inform~tion contained in the applicat~on is corrert to the best of my
~ knowledge aad that this appl~cation es made with the knowledge anci coasent of the
~ property owaer.
;
- APPLICANT'S SIGNATURE•,~~~ ~~~~` DATE ~~ ' f~~~
~
Driver's L~cense Number State ~~ Expiratzon Date.
_,
~
d, r .- ~ «~
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f~1NANf'.IAI, ANALYSIS OF M1LLS AC'i' C()NTRAC'l'
1~ililllR~
K~+:V1~.NL11:S lnc,rcase Cutrcitt Year 1 Ye~r 2 Yeat 3 Ycar 4 Year 5 Year 6 Ycar_7 Year 8 Year 9 Ycar ]CI
r}~ ~ ~~ eJ
1 M~mthly Renlal 1»i.ome +•r
-~ ~----
2 Anriual RenCal fnCOt~~e 3% ~~ J~,~oo0'~~ ~0.2~~ °'r~~/'7~ y~3~~~'ra~l~ 31•1~~ ~S pL..~~5~S8~~S~'.?~>~1'~~~~ D3 _~~r~ ~~' ~'
(l.u-c. I x 12) (Incicasc by 3~ cac,h ycarl ~~~~h j ~ j~ ~l ~
3 ANNUAL ~XPENSF,S [1)oeti ncrl in lude 'Taxcti, Mortg~ge ur Inlerest
lntiurance 5`~ ~ ~~~"~ ~t?.' ~~_~ ~?~1~5~` ~_y.~}°~ ~ ~~ ~6'~ ar.~'~`~}.d ~ QL_y~ q~x~ ~1~~~ ~'
4 lltii~t~es G~O ~~n~~ 15~n'/~?G~ `~~l}~ ~'~f3_~! yi,o} ~~3,17fi~~~Sa.~.~yy7~`1°fi~~.i~y~~~~, ~
5 Ma~ntenanc.e 5`~ ~ ~ hb ~ .~ba y ~~~a "'~~3~ ~"r P Y~ ~~,y5' ~ G~' ~ `'1 y<`v~ ~yb5 ~' ~:~ h5 -`'` ~~/ r :•--~.
. . _ . ._.. _ . _ ~ - ~.. ,.- . ~
6 Manage~Y~ent 5~'0 ~' ~ ~~~ ~'i l~ ` (~~ `i 1~' ~ ~ ~~~.7~b3%a' 3r `~ ~ A~ ob)~~L'~)~j 5 l ~,^,_~. ~~j ~i ~?;~;'~°
_... _ _._ _ .- ~ ~" ~.
~ ocj~~~ ({lperal~n~ f~x~enses} 2°i ~ 1 ~!~~ `~
__..._ ~~~a- ~ ~' s° !~ ~~ `~ a3 cf ~y ~ ~',~~ ~° f ~„~~} ~ ., ~r ~
! ~.:.~_ 1~ __.. ~ ~l. l~ ~ _t . _ ~. ~ ~, ~
R TII~~I L'X~~IlSCS
~sum ~~IfILS 31~1[Ull~~l~j}
b ~.. ,Y ~./
~ J ~
c~ ~ _l.~ ~~ (/J~/~ 4 Y5~ ! ry, f"( .~,~j f (! r (} - {~J i J ~
)/_ ~ _ ~~7 _ _ _.. (~f! ^( !J ~ ~•,
T?~1'~'1..~rr'~.1?r1 ,~T~~~ ~~J~1~`~~~U`1r3~~y',ydt,~~~ 1~ , -~
NE'I' OPERA'1'IN(w INC(~M~
`
t3.551L ? R11i1115 I 131L' ~~
. ,,~,/ ~
r) t I '~ •)((j~j 6~ !5Q„ ~~' ~1l~9 ~1,/ c~y/ G~ )/~ ):T +~'7~~,y( ?f ))~ S3 t j~~} F7
(JS ~ S]~~ f- !'T~ 1~~ ~~`fL1J~ "'~Fl ~~~Tff"~fp ~) ~jh fl+~~lL'~~ ti.l:S V' Y ~SA7t ~ ~1 'j5~~( ~~"~ ~
~1
f. .-__.. .
('A3'ITA[.IZA'll()N RATI:
~) Inte~est Ci~in~~u~i4nl 7 5 '~~ (S~~tembec 1995 199h} ~Ad.~ustcd e,ic.h yeai hy Slalc Tioard uf Hyt~alizatiou ]
~
~
~w
~~
FIfYANC~Ai. ANAC.YSlS UF MII.i,S AC'1' CUNTI~AC'T
An~ual
Increaye C'urrent Year L Yca~ 2 Year 3 Year 4 Year 5 Year 6 Ycae 7 Ycar 8 Year 9 Ycar 10
10 Ilistc~ric Nroperry ~
Risti Cc~mponcni ~~
(Sin~lc HamAy linme = 4`I) fi txecl °I~}
(Ail U~her Propcrty = 29'0)
l 1 Property 7'ax C'ompancnt
12 Amnrt~zation Cnmponent
(r~c,~prnc.al c~f life of property)
l3 "I'inal = Capatalizannn Rate
{tium l~nes 9 thruugli f2)
TAXES
i4 M~lis Act Assessn~ent
(Ncc O~erat~ng I~uome/
~.,stu: ! 3)
15 Tax Under Mtlls AcE
(l ine 14 x f1105881G)
lh C'urrent Tax 2%
!7 7'ax 5avings
(Lnie 16 m~s~us L~ne IS)
18 Arinual Cost tu City
(L,I~~e 17 x 14%?
1 I~ (F~xed at 1% due to Propos~tion 13} ,
3°I (30 years = 1/30 = 3% Gencrally cons~ant but may he Fead,~usted ha~ed u{+c~n structure's ce~ci,iract-n^ lZ~atcr~als )
j~s~~
~ f`rr~~± ~ fQ~4"1o~ Is~6~s ~I9~ '~Iq¢~S '~~r4'_a,4~ ~r~4, ~r6 ~.~5,~~~ ~1~ ~l ~ #Z?~~.9~4.
~~1~7~ ~IRZi ~144R ~,~415 ~20(a2 ~Zfrr. _ ~l~r~_r ~2tr__ ¢Z2~Z ~i~3_ ~Z~G(~
.~.~.~ ~ -.~~ 1r~ ~ Ja ~~~.~~1 ~,1~1~~3`~.5~~~7~~~Sq~~~'~~~.~" ~~ ! S~ ~
~1~~ ~~2?~ f~l~ ~~ab. ~~uo ~~~~ ~~~~a ~13Sa_ ~~~ ~'14~~_ '~i~i-
~f?S ~I~~ ~f~o ~r~3_ ~`I~G ~ISg ~I9~ ~i4Q~.. ~'I4~._ ~D_... `~~~
,ti
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EXHIBIT "C"
HISTORIC PROPERTY PRESERVATION AGREEMENT
PROP~SED HOME IMPROVEMENTS
The following reno~at~on pro~ects shall be compteted by the applicant o~er the inItial 10 y~ear
term of the contract
Icem Year Task
~f
1 ~ `~.~~~ - `
7 i~ ~~ `.~./ t.~.- i~~`f ~ G
` , ~/ - ; -
'U ~._.~~~.; ~
3 ^ ~.t~_ ~c !~~~.~-'+ _ ~ ~-
~ r r
4 1- ~r+,~.
l~i1d=!,,vf,y~: ~' C _
~-~%~.-~ ''~~ ~ ~~~'Y~~;,; , _
5
~ J~,,,t/,r...~l~', {~ - ~ J~-- ~ J "~ ~ ~
6 u - ~.
v ~:~.~.cr ~~ , ~--,~ -~ ~
! .~3 ~ '~"vJ - ~~~ Y'~~.: ~~",/7 r-
7 ~ _ _
~- ~~„~ i 'f^ ~ ~~~ - i"~:.~ ~
r ~~
g ~~_-~.t.c ~A~r. vJ , ~..E.r`;~ 5 ~,~ ~ f~
g ~",~~~ 1~'~,`~ ",~._r, ~
~
10 ~P~,~~-~.~.~ _ ~~- ~4~ ~ J;~ ~?~'~,K _,. ,~ ~i.f~_ ~E ~ 1 ~ ~1 ~' ~
~ i ~ ~ ~`~ ~ `~ ~ _ I ~
~ ~,~- ~,~- S-~ ~ ~.e ~ u _ ~~ $
1 J
l.l' .
12 f ~i~ =-~e~-r~ ~r%,,~~.l~ f J (-~ ~"?J 0 ~i .
~ ~''-~ ~ ~ ~,:
1mklm~llsact
9
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C~n~~#~~~~
F !,PLAN;SHARE`~~LMKIM~LLS:~GT~.RES02~02 4TH
Citr Council ?~~Ieeting 4,`14'98 Santa 1~~Ionica. Caiifornia
RESOLLTION ~L;~11BER925$ GCS
(Cit~~ Council Senes)
A RESOLLTTION OF THE CITY COL'I~CIL OF THE CIT'Y OF 5:~1~T~ MO~TIC~
AL'THORIZI~IG THE GITY ~i4_'r1AGER TO EXECUTE ~. HISTORICAL
PROPERTY CO?~TR~CT I'` ACCORDAtiCE W~TH GOVER1~1~1E1~T
CODE SECTION ~0284 `~'ITH THE OWNER O~ THE I'ROPERTY
LOCATED AT 2402 FOtiRTH STREET', #6
~~4TIEREaS. Government Gode Sect~on ~0280 et seq authorizes a cih- to enter inta a
historical propert~' contract ~i~ith the a«~ner of an~° qualified histor~eal propert~- to restrict the use
af such propem- so that it retains its historicallz- sigmficant characteristics m return for ~~°h~ch the
propem- o«ner obtains propert~- tax rel~ef.
V-~'HEREAS, Santa ~iomca Vlunicipal Code Section 9 36 270(g) prov~des that desi~nated
structures of iner~t. landmarks, and contributzne structures located m histonc districts that are
pri~atel~~ o~~ned s~a~l l~e cons-~ered qualified histoncal propert~es eligable to enter ~nto histar~cal
propert~~ contracts ti~zth the Cin~ upon resolutian b~° #he Git~- Council.
V4'HEREAS, the prapert~- iocated at 24U2 Fourth Street. ~6 is a deszgnated C~ty landmark
and the o«~ner of the propert~~ has filed an application to enter into a historical property contract
«7th the Cm-.
Vl'HER.EAS, the Landmarks Comm~ssion re~~ievs°ed the otitner's application at its
Februan 9, 1998 meeting and directed G~ri• Staff to forv~°ard a recommendation to the Citr
Council ~n support of the appiication,
WHEREAS, the City Councii has detemuned that it is appropnate for the C~ty to en#er
into a histoncal praperty contract with the owner of t~e praperty located at 2402 Fourth Street,
#s
NOw' THEREFORE, THE CITY COUNCIL OF THE CITY OF S~NTA M4NTCA
DOES HEREBY RES4LVE AS FOLLOWS
SECTION 1 Purs~ant to Santa Moruca Municipal Code Sect~on 9 3b 270(g), the City
Council authortzes the Crty Manager to enter ~nto a lustoncal property contract w~th the owner of
the ~roperty Iocated at 2442 Fourth Street, Santa Monica, Califasrua in accordance with
Government Code Section Sfl280 g~ e~
SECTION 2 The C~ty Clerk shall cert~fy ta the adaptton of tlus Resolutzon and
thenceforth the same shail be in full force and efFect
APPROVED AS TO FORM
`1, • i
~ ~, ~ J . ~ ' ~ ~
! ,_ ;_-;~r~ ~ ~ ~ :i:_t~ _ .
MARSHA J~NES MOUTRIE
Crty Attorney
F';PL,~~SHAR.E+LtitK`,41[L.LS~CT.RE502402 4TH
~ ~ ` U ~i
Adopted and approved th~s 14th o# April, 1998
~--
l~
Robert T Holbrook, Mayor
I, Mar~a M Stewar#. City Clerk o~ the C~ty of Sar~ta Mor~ica, do hereby cert~y that
the foregomg Resolut~an 9256 (CCS} was duly ac~opted at a meeting of the Santa
Mar~ica City Council held on the 14t~ af April, 1998 by the following ~ote
Ayes Counc~lmembers
No~s Cauncilmembers
Absta~n Counc~lmembers
Absent Councilmembers
Ebner, Femstem, Genser, Greenberg, Holbrook,
0'Gonnor, Rosenste~n
Nor~e
None
None
ATTEST
~ ``s`'~ ~~-''~-' ~
Marra M Stewar#, Crty Clerk