Carmel-by-the-Sea Mayor Sue McCloud
8 August 2006 City Council Meeting
Mayor McCLOUD seconded Councilman CUNNINGHAM'S motion to DENY the Hutchings' Mills Act Contract; subsequently, McCLOUD, CUNNINGHAM & HAZDOVAC voted to DENY the Hutching's Mills Act Contract, BETHEL & ROSE dissented.
UPDATE: On 9 August 2006, the day after the City Council denied the Hutchings' Mills Act Contract, David Hutchings filed an "appeal" to the City Council for a reconsideration of its 8 August 2006 decision to deny a Mills Act Contract after the City conducts a Mills Act Workshop.
Regular Meeting
Tuesday, August 8, 2006
4:30 p.m., Open Session
VIII. Public Hearings
A. Consideration of a Mills Act Contract and a Maintenance and Management Plan for an existing historic residence located on the west side of Lincoln Street between 8th & 9th Avenues. The property owners are David & Debbie Hutchings.
Council Member CUNNINGHAM moved to deny the Hutchings’ Mills Act Contract and Maintenance and Management Plan for their historic residence, the Elizabeth F. Armstrong House #2, seconded by Council Member McCLOUD and carried by the
following roll call:
AYES: CUNNINGHAM, HAZDOVAC & McCLOUD
NOES: BETHEL, ROSE
ABSENT: NONE
ABSTAIN: NONE
Meeting Date: 8 August 2006
Prepared by: Sean Conroy, Senior Planner
City Council
Agenda Item Summary
Name: Consideration of a Mills Act Contract and a Maintenance and Management Plan for an existing historic residence located on the west side of Lincoln bet. 8th & 9th, in the Single-Family Residential (R-1) District (Blk 94, Lot 13 APN: 010-193-005). The property owners are David & Debbie Hutchings.
Description: The applicant is requesting approval of a Mills Act Contract that would be forwarded to the County Assessor’s Office and would result in a potential reduction of property taxes if approved by the City. The contract
would be good for a minimum of 10 years.
City Funds: Approval of the Contract will result in a decrease in property taxes for subject property. The actual reduction will be calculated by the County Assessor’s Office.
Staff Recommendation: Postpone the approval the Mills Act Contract and the Maintenance and Management Plan as submitted.
Important Considerations: CMC 17.32.100 identifies benefits available to historic properties listed on the City’s Register of Historic Resources. The most significant of these benefits is the granting of a Mills Act Contract. Goal 1-5 of the Land Use Element of the General Plan encourages providing incentives for property owners to preserve and rehabilitate historic resources.
Decision Record: On 17 October 2005 the Historic Resources Board recommended approval of a Mills Act Contract for the subject property to the City Council.
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
FROM: RICH GUILLEN, CITY ADMINISTRATOR
DATE: AUGUST 2, 2006
SUBJECT: PROPOSED HUTCHINGS MILLS ACT CONTRACT
The City Council Agenda Packet contains a staff report prepared by Senior Planner, Sean Conroy. This staff report is basically the same one presented to the City Council on December 6, 2006. You will note that the planning staff recommendation is to approve entering into a Mills Act contract with the David & Debbie Hutchings (property owners).
Recalling the City Council’s deliberations and after reviewing the staff report once again, from my perspective the following items remain unanswered as noted below:
• A City Council workshop needs to be scheduled to educate the public on how the
Mills Act will be applied in our community;
• Staff needs to present to the City Council (at a regularly scheduled meeting) Mills Act criteria that meets the minimum intent of the State Law and is in-line with City Council policy direction;
• The City Attorney needs to review and recommend to the City Council a model
agreement that can be applied to any property that meets the Mills Act criteria; and
• Finally, staff needs to analyze the financial impact to the City’s Property Tax
revenues so that the City Council fully understands the financial impact of Mills
Act property approvals.
Until the above items are addressed, I feel that it is premature to approve (or deny) the Hutchings request to enter into a Mills Act contract.
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: SEAN CONROY, SENIOR PLANNER
DATE: 8 AUGUST 2006
SUBJECT: CONSIDERATION OF A MILLS ACT CONTRACT AND A
MAINTENANCE AND MANAGEMENT PLAN FOR AN EXISTING HISTORIC RESIDENCE LOCATED IN THE SINGLE-FAMILY RESIDENTIAL (R-1) DISTRICT
RECOMMENDED MOTION
Approve the Mills Act Contract and adopt the Maintenance and Management Plan.
BACKGROUND & PROJECT DESCRIPTION
The subject residence is an English Arts and Crafts style residence with both one and two story elements. The residence is located on the west side of Lincoln Street between 8th and 9th Avenues and was constructed in 1935 by noted local architect C.J. Ryland. The residence and detached garage qualify as historic resources under California Criterion 3 (architecture). A DPR 523 form was filed with the City on 9 April 2002.
On 12 June 2002 with recommendations from the Historic Preservation Committee, the Planning Commission approved a small addition and minor alterations to the historic resource. The additions increase the floor area on the site by approximately 11%.
On 17 October 2005 the Historic Resources Board placed the residence on the City’s Register of Historic Resources and recommended approval of a Mills Act Contract to the City Council. The City Council continued this item on 6 December 2006 until an informational workshop was held educating the public on the Mills Act.
EVALUATION
Mills Act Contracts: Goal 1-5 of the Land Use Element of the General Plan encourages providing incentives, such as tax relief, to promote preservation and rehabilitation of historic resources. CMC 17.32.100 identifies potential benefits to properties that are included on the City’s Register of Historic Resources. The most significant benefit is the granting of a Mills Act Contract. The Mills Act was enacted by the State of California in 1972 and grants participating local governments authority to enter into contracts with owners of qualified historic properties. Owners are expected to actively participate in the restoration and maintenance of their historic properties while receiving property tax relief.
As part of the City’s Local Coastal Program, Mills Act Contracts are now being offered to qualifying properties. The purpose of granting a contract is to aid in offsetting the costs of maintenance and rehabilitation or to offset the potential loss of income that might otherwise be achieved on the property.
Terms of the Contract: Mills Act Contracts will have a 10-year term with one year being added annually to the term unless one of the parties has taken action to terminate the contract. Once a contract is approved by the City it is forwarded to the County Recorder’s Office and to the County Assessor’s Office. The assessor calculates the actual tax savings based on the Income Approach to Value method (see attached).
Maintenance & Management Plan: Approval of a Mills Act Contract includes the adoption of a Maintenance and Management plan, which guides maintenance efforts throughout the life of the contract. This plan must be updated at least every 10 years. The City’s Preservation Consultant prepared a thorough evaluation of the property’s character-defining features and made maintenance recommendations. Her review is attached.
Based on these recommendations, the applicant has prepared a maintenance schedule identifying the proposed long-term maintenance and the potential cost associated with each activity. Because this structure has been maintained in such excellent condition, the Maintenance and Management Plan is relatively limited.
Required Findings: CMC 17.32.100.B requires that specific findings be made before a Mills Act Contract can be approved. The following is a list of the findings with a response from staff:
Finding #1: The building is designated as an historic resource by the City and is listed on the Carmel Register.
Response: The residence was placed on the City’s Register of Historic Resources on 17 October 2005 by the Historic Resources Board.
Finding #2: The proposed maintenance plan is appropriate in scope and sufficient in detail to guide long-term maintenance.
Response: The residence has been maintained in an excellent manner and has recently been renovated. The maintenance plan identifies maintenance that will be done on a year-to-year basis and also identifies on-going maintenance activities. The plan is sufficient to guide long-term maintenance and allows the City to re-evaluate the plan periodically.
Finding #3: Alterations to the historic resource have been in the past, and will continue to be in the future, limited to interior work and to exterior rehabilitation and alterations that:
(A) Comply with the Secretary’s Standards, and do not affect the basic form and design of the original historic resource, and
(B) Do not affect any primary elevation, and
(C) Do not alter, damage or diminish any character-defining feature, and
(D) Do not increase floor area on the property by more than 15 percent beyond the amount established in the documented original or historic design of the resource, and
(E) Do not result in any second-story addition to a single-story historic resource, and
(F) Meet all zoning standards applicable to the location of the property.
Response: An addition was approved on the rear to the historic residence in 2002 that increased the floor area on the site by approximately 11%. No addition or alteration has occurred that has affected the primary (east) elevation, with the exception of the in-kind replacement of the garage doors. The Historic Resources Board and the Planning Commission determined that the addition to the rear was consistent with the Secretary’s Standards. Any future proposal for alterations would be required to follow the City’s adopted procedures and be consistent with the Secretary’s Standards and the requirements of this contract.
As part of the addition and remodel in 2002, the Planning Commission granted two zoning exceptions, one for plate height (excess of 18’) and one for the number of stories. The Council should discuss if this violates required finding 3F, or if the finding can still be made since the exceptions were granted by the Planning Commission.
Finding #4: The Mills Act contract will aid in offsetting the costs of rehabilitating
and/or maintaining the historic resource and/or will offset potential losses of income that might otherwise be achieved on the property.
Response: The approval of this contract will assist in offsetting future costs of maintenance and will offset potential losses of income that might otherwise be achieved on the site had the residence not been identified as an historic resource.
Finding #5: Approval of the Mills Act contract will represent an equitable balance of public and private interests and will not result in substantial adverse financial impact on the City.
Response: Approval of the Mills Act Contract will be consistent with Goal 1-5 and Objective 1-16 of the Land Use Element of the General Plan which encourages providing incentives for property owners to preserve and rehabilitate historic resources. Although the adoption of all Mills Act Contracts will decrease the property taxes available to the City, this financial impact is minimal because:
1) only a limited number of properties can meet the requirements for a contract.
2) only a portion of the property tax from any single property will be lost and
3) the lost revenue to the City is offset by the value of preserving important historic resources. This contract represents an equitable balance of public and private interests.
RECOMMENDATION
Approve a Mills Act Contract.
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