TITLE
Recommendation to authorize City Manager to execute Mills Act historic property contracts with owners of historic landmark properties for the preservation and rehabilitation of the Opdahl House, Espey/Lochridge House, Residential Home No.1, Olan Hafley House, Kimpson Nixon House, Gaytonia Apartments, Insurance Exchange Building, Ocean Center and Killingsworth Office. (Districts 1,2,3,8)
DISCUSSION
The Mills Act, enacted by State law in 1972, allows local governments to enter into tax abatement contracts with property owners of historic structures. Property owners agree to restore, maintain, and preserve the property in accordance with specific historic preservation standards and conditions identified in the contract. Entering into a Mills Act contract results in a property tax reassessment by the Los Angeles County Assessor using the income-capitalization method, which may result in a 30 to 50 percent reduction in property tax.
The City Council established a local Mills Act program in 1993. Between 1993 and 2006, the City awarded 31 contracts for single-family and duplex properties, and various contracts for individual units at three mixed-use condominium buildings. With each contract, an inspection of the property is required prior to contract execution and again every five years thereafter to ensure proper maintenance of the property. The contracts are between the City and the property owner with an initial term of ten years. The contracts will renew at the end of the ten-year period unless a request to terminate is made by either party, in which case termination would occur at the end of the contract term. The City maintains various mechanisms to bring a property into compliance or terminate the contract and recover significant damages if the property owner breaches any of the contract terms.
While 31 previously approved contracts remain in place, no new contracts have been issued since 2006. In 2007, the City notified contract applicants and inter...
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