CITY COUNCIL: Resolution Authorizing City Administrator to Enter into a Mills Act Contract with Stephanie Ager Kirz for a Historic Property located on Junipero Avenue 2 NW Third Avenue

Meeting Date: 4 October 2011
Prepared by: Sean Conroy, Plng & Bldg Services Manager

City Council
Agenda Item Summary

Name: Consideration of a Resolution authorizing the City Administrator to enter into a Mills Act Contract with Stephanie Ager Kirz for an historic property located on Junipero Avenue 2NW of Third Avenue.

Description: A Mills Act Contract is one between the City and a private property owner of an historic structure. The contract is for a minimum of 10 years but also contains renewal provisions. The property owner must agree to specific maintenance and rehabilitation efforts in return for a reduction on property taxes.

Overall Cost:
City Funds: Loss of approximately $1,000 a year in property tax revenue.

Staff Recommendation: Approve the Mills Act Contract.

Important Considerations: The Mills Act was enacted by the State of California in 1972 as a way of encouraging partnerships between local governments and property owners of historic resources. Local governments are not required to participate in the Mills Act. For participating governments, a Mills Act contract can be offered to any property that contains an historic resource.

The City Council amended the City’s Mills Act requirements on June 8, 2010 and established a limit of no more than three contracts that could be approved during any given year.

Decision Record: On August 15, 2011 the Historic Resources Board recommended that the City Council adopt a Mills Act Contract for this property.

Attachments:
• Staff Report dated October 4, 2011.
• Resolution and Contract.
• DPR 523 Form (historic designation form) and additional background information.

Reviewed by:

______________________________ _____________________
John Goss, Interim City Administrator Date

CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR MCCLOUD AND COUNCIL MEMBERS
THROUGH: JOHN GOSS, INTERIM CITY ADMINISTRATOR
FROM: SEAN CONROY, PLNG & BLDG SERVICES MANAGER
DATE: OCTOBER 4, 2011
SUBJECT: CONSIDERATION OF A RESOLUTION AUTHORIZING THE CITY ADMINISTRATOR TO ENTER INTO A MILLS ACT CONTRACT WITH STEPHANIE AGER KIRZ FOR AN HISTORIC PROPERTY LOCATED ON JUNIPERO AVENUE 2 NW OF THIRD AVENUE

BACKGROUND AND PROJECT DESCRIPTION
This site is located on the west side of Junipero Avenue, three northwest of Third Avenue and is developed with a single-family residence (1,150 sq. ft.) and a detached garage (288 sq. ft.). The residence was designed and built by Hugh Comstock in 1929 and is known as “Curtain Calls.” The residence qualifies as historic under California Register Criterion
#3 (architecture) as a good, intact example of the Storybook design of Hugh Comstock.

The property also relates to the Architectural Development theme of the Historic Context Statement. A DPR 523 form (the historic designation form) was submitted to the City on January 31, 2011.

Both the Historic Resources Board (HRB) and the Planning Commission recently approved the demolition of the non-historic garage and the construction of a new detached guesthouse near the northeast corner of the property. The applicant is now requesting approval of a Mills Act Contract.

The Mills Act was enacted by the State of California in 1972 as a way of encouraging partnerships between local governments and property owners of historic resources. Local governments are not required to participate in the Mills Act. For participating governments, a Mills Act contract can be offered to any property that contains an historic resource. The contract must be for at least 10 years and must include renewal provisions.

The property owner typically agrees to specific rehabilitation/restoration efforts that would take place over the life of the contract. In turn, the property owner receives a reduced property tax assessment, typically by using the Income Approach to Value rather than the Market Approach to Value. The jurisdiction benefits by having historic resources rehabilitated and maintained, while the property owner benefits by having a
reduced tax burden.

The City’s Historic Preservation Ordinance offers Mills Act contracts as a potential benefit to property owners of historic resources when certain findings can be made.

These findings are addressed in the “Evaluation” section below. On June 8, 2010, the City Council adopted a resolution indicating that no more than three Mills Act Contracts for residential properties could be approved during any given year. This is the first Mills Act Contract application since that time.

On August 15, 2011 the HRB unanimously recommended that the Council approve the proposed Mills Act Contract.

EVALUATION
Mills Act Standards: As stated in CMC Section 17.32.100.B(1), the primary purpose for offering Mills Act contracts in the City of Carmel-by-the-Sea is to assist in the rehabilitation/restoration and long-term maintenance of historic resources. Applications should include both a rehabilitation/restoration component and a maintenance component.

CMC Section 17.32.100.B(6) establishes specific findings that must be met in order to qualify for a Mills Act contract in the City. These findings are summarized below followed by a brief staff response.
• The building is designated as an historic resource by the City and is listed on the Carmel Register.
Response: The property is listed on the City’s Historic Register and qualifies as an historic resource per the City’s Municipal Code and the California Environmental Quality Act.
• The proposed rehabilitation and maintenance plan is appropriate in scope and sufficient in detail to guide rehabilitation and long-term maintenance. Required maintenance and rehabilitation should be more significant than just routine maintenance that would be expected for any property.
Response: The applicant has done a good job of preparing a thorough rehabilitation and maintenance plan that includes both restoration and maintenance components. The plan includes proposals to repair and/or replace exterior materials including all of the existing windows and the stucco siding. The plan also includes seismic retrofitting, roof
replacement and numerous annual maintenance items to ensure that the property is restored and maintained into the future. The plan goes beyond routine maintenance and appears to comply with the intent of the ordinance.

• 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 (future additions only), and
Response: All future changes/alterations shall require review by either staff or the HRB for a Determination of Consistency with the Secretary of the Interior’s Standards. A qualified professional historian and the HRB have reviewed the proposed rehabilitation and maintenance plan and determined that the items are consistent with the Secretary’s Standards.

(B) Do not significantly alter, damage or diminish any primary elevation or
character-defining feature, and
Response: The applicant is not proposing any alterations at this time to the primary elevation or character defining features. Any such changes that are proposed in the future would require review by the HRB.

(C) 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
Response: The original floor area of the historic residence was 1,105 square feet and the garage was 288 square feet for a total of 1,393 square feet. A 45-square-foot addition was constructed on the west elevation in 1947. The City’s recent approval of the demolition of the garage and the construction of a guesthouse increased the total floor area on the site by another 32 square feet. Therefore, the floor area has been expanded by
approximately 5.5%.

(D) Do not result in any second-story addition to a single-story historic resource.
Response: Two dormers were added to the second-story, but no second-story additions have occurred. The dormers are consistent with the architectural style of the building.

Economic Impact: When the City Council reviewed the revisions to the Mills Act requirements in 2010, brief economic analysis was included in the discussion. It was determined that the average Mills Act Contract would result in a net decrease in property taxes to the City of approximately $1,020 per year. This is a fair assumption for this application.

RECOMMENDATION
Adopt the attached Resolution.

CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION 2011-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AUTHORIZING THE CITY ADMINISTRATOR TO ENTER INTO A MILLS ACT CONTRACT WITH STEPHANIE AGER KIRZ FOR AN HISTORIC PROPERTY LOCATED ON JUNIPERO AVENUE 2 NW OF THIRD AVENUE

WHEREAS, The City of Carmel-by-the-Sea is a unique community that prides itself in its historic character; and

WHEREAS, the City has adopted a General Plan and Municipal Code that strive to protect the historic character through clear policies and regulations that guide historic preservation; and

WHEREAS, the Mills Act was adopted by the State of California in 1972; and

WHEREAS, jurisdictions are not required to implement the Mills Act; and

WHEREAS, participating jurisdictions may establish specific application requirements to suit local needs; and

WHEREAS, the City adopted the Mills Act as a potential benefit to property owners of historic resources as part of the Local Coastal Program and amended the Mills Act requirements on June 8, 2010; and

WHEREAS, the property located on Junipero Avenue two northwest of Third Avenue (APN: 010-108-012) is listed on the City’s Register of Historic Resources; and

WHEREAS, the applicant submitted a request for a Mills Act Contract on June 28, 2011; and
WHEREAS, the applicant’s proposal is consistent with CMC Section 17.32.100.B; and

WHEREAS, the approval of this contract will not exceed the maximum number of Mills Act Contracts that can be authorized during any given year (3) as established by the City Council.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA does hereby:

Authorize the City Administrator to enter into the attached Mills Act Contract.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 4th day of October 2011 by the following roll call vote:

AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS

SIGNED,

________________________
SUE McCLOUD, MAYOR

ATTEST:

__________________________________
Heidi Burch, City Clerk