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HomeMy WebLinkAbout55A - RESO - WAIVER APP FEE HISTORIC PROPERTIESREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: AUGUST 5, 2014 TITLE: RESOLUTION AUTHORIZING A WAIVER OF THE NEW APPLICATION FEE FOR THE PRIVATE PARTY NOMINATIONS OF PROPERTIES TO THE SANTA ANA REGISTER HISTORICAL PROPERTIES AND MODIFICATION OF MILLS ACT AGREEMENT FEES CITY MANAq@rR RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 13' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO Adopt a resolution authorizing a one -year program to encourage historic preservation by temporarily waiving private party nominations of properties to the Santa Ana register of historical properties fees and reducing Historic Property Preservation Agreement (Mills Act) fees. DISCUSSION Background on Historic Preservation Fees In March 2009, the City Council adopted a resolution that provided for a comprehensive update of the City's development processing fees. The new fee structure was the result of an extensive study by both City staff and the consulting firm of MGT of America, Inc. The resulting fees were based on 100% cost recovery of the actual cost in time and materials to provide a given service. While the fee for Historic Property Preservation Agreements (Mills Act) was included in this study, a fee for private party nomination of properties to the Santa Ana Register of Historic Properties was not Included and continued to be offered for free. When the Historic Preservation program was created in 2001, the decision to not charge a fee for private party properties was made based on the concern that a fee would discourage property owners from listing their properties. Given that the listing process was new and many historically - significant properties were at risk of being lost if altered, the incentive provided by the free application was deemed appropriate. In 2010, the City Council adopted an ordinance amendment establishing a fee for self - nominations. The decision to establish a fee for private party nominations was based on a number of factors but primary amongst these was the determination that the most significant properties had received historic status and further listings of nominated properties are primarily for the purpose of receiving the Mills Act tax reduction. The fee was developed utilizing the same methodology used to update the other development processing fees and was based on full cost recovery. 55A -1 Historic Preservation Fee Waiver August 5, 2014 Page 2 In the 13 years that the program has been in existence, through a combination of City - initiated and private party nominated applications, over 560 properties have been added to the Santa Ana Register of Historical Properties. Historic Property Listing Process Currently there are two ways for a property to be added to the Santa Ana Register of Historical Properties. The first is through a City- sponsored nomination process. These are properties that have been identified by the City as having historic significance as a contributing property, key property or landmark. The second is through a voluntary private party nomination, often called a self- nomination, by the property owner. These are properties that meet the eligibility criteria established by the Santa Ana Municipal Code (SAMC) Chapter 30 — Places of Historical and Architectural Significance to be added to the register, but that were not identified by the City as having special historic significance. In most cases, the properties nominated through private party nomination process fall into the Contributive category. Historic Property Preservation Agreement (Mills Act) The most common reason property owners request their properties to be added to the historic register is to enter into a Historic Property Preservation Agreement commonly known as a Mills Act Contract. The property must be listed on the Register in order to be eligible for this benefit. This contract, enacted between the property owner and the City, requires the property owner to protect and preserve the historic nature of the property over the term of the contract. In exchange for this preservation, the property owner is able to take advantage of substantial property tax savings through tax credits for the life of the agreement. While the exact savings is dependent on a number of factors, many property owners realize as much as a 50% savings on their property tax bill. Development and Transportation City Council Committee Recommendation Currently, the fee for private party nominations of a property to the Historic Register is $5,015.05 and the fee for a Historic Property Preservation Agreement (Mills Act) is $3,935.87 resulting in a total cost for both of $8,950.92. For those properties on the higher end of the value scale, these fees have not had as much of a dampening effect as for those on the lower end of the value scale. This may be due to the fact that owners of more highly - valued properties can afford the relatively high up -front cost of the applications because it would be outweighed in a relatively short amount of time by the tax savings. Conversely, owners of less highly- valued properties would not see as much of a return on the initial investment of the fee and the size of the fee required up front may be a deterrent to applying. 55A -2 Historic Preservation Fee Waiver August 5, 2014 Page 3 Given the concerns that the current fees are presenting a barrier to property owners' participation in the City's Historic Preservation Program, the Development and Transportation Council Committee requested staff to explore options for waiving all or a portion of these fees as a way to continue to encourage historic preservation. Based on this direction and further analysis, staff recommends that the City Council temporarily waive the full fee amount to list a property on the Historic Register and reduce the fee to enter into a Mills Act Agreement by 50 %. This approach is similar to the one used to encourage solar installations in the City by waiving solar permit and inspection fees. The proposed fee waiver would be in effect for one year with an option for the City Council to renew for an additional two years. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal No. 5 Community Health, Livability, Sustainability and Engagement, Objective No. 3 (facilitate diverse housing opportunities and support efforts to preserve and improve the livability of Santa Ana neighborhoods). FISCAL IMPACT Based on the data for the last 13 years of the program, the City has processed an average of ten applications per year. At that rate, the estimated revenue loss to the General Fund is approximately $69,800 per year for up to three years, during the life of the waiver program. APPROVED AS TO FUNDS AND ACCOUNTS: Karen Haluza(7 Francisco Gutierrez Interim Executive Director Executive Director Planning & Building Agency Finance & Management Services Agency�- MF:rb mtlrepodslHlstoric Fee Waiver RFCA 5 -5 -2014 55A -3 55A -4 ROH — 08/05/14 RESOLUTION NO. 2014 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING A WAIVER OF THE NEW APPLICATION FEE FOR THE PRIVATE PARTY NOMINATIONS OF PROPERTIES TO THE SANTA ANA REGISTER OF HISTORICAL PROPERTIES AND MODIFICATION OF MILLS ACT AGREEMENT FEES BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. In March 2009, the City Council adopted a resolution that provided for a comprehensive update of the City's development processing fees. The new fee structure was the result of an extensive study by both City staff and the consulting firm of MGT of America, Inc. The resulting fees were based on 100% cost recovery of the actual cost in time and materials to provide a given service. While the fee for Historic Property Preservation Agreements (Mills Act) was included in this study, a fee for private party nomination of properties to the Santa Ana Register of Historic Properties was not included and continued to be offered for free. B. In 2010, the City Council adopted an ordinance amendment establishing a fee for self- nominations. The decision to establish a fee for private party nominations was based on a number of factors but primary amongst these was the determination that the most significant properties had received historic status and further listings of nominated properties are primarily for the purpose of receiving the Mills Act tax reduction. The fee was developed utilizing the same methodology used to update the other development processing fees and was based on full cost recovery. C. In the 13 years that the program has been in existence, through a combination of City- initiated and private party nominated applications, over 560 properties have been added to the Santa Ana Register of Historic Properties. D. Currently the fee for private party nominations of a property to the Historic Register is $5,015.05 and the fee for a Historic Property Preservation Agreement (Mills Act) is $3,935.87 resulting in a total cost for both of $8,950.92. Resolution No. 2014 -XXX Page 1 of 3 55A -5 E. Given the concerns that the current fees are presenting a barrier to property owners' participation in the City's Historic Preservation Program, the Development and Transportation Council Committee requested staff to explore options for waiving all or a portion of these fees as a way to continue to encourage historic preservation. Based on this direction and further analysis, staff recommends that the City Council temporarily waive the full fee amount to list a property on the Historic Register and reduce the fee to enter into a Mills Act Agreement by 50 %. The proposed fee waiver would be in effect for one -year with an option for the City Council to renew for an additional two years. Section 2. The City Council hereby waives the full amount of the new application fee for the private party nominations of properties to the Santa Ana Register of Historical Properties for a one year period commencing upon the date of adoption of this Resolution. Additionally, the City Council hereby reduces the fee to enter into a Mills Act Agreement by 50% for a one year period commencing upon the date of adoption of this Resolution. The City Council shall have the option to renew both the Historic Register Listing fee waiver and the Mills Act Agreement fee reduction for an additional two years. Section 3. This resolution shall take effect immediately upon its adoption by the City Council and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of 2014. APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney Ryan O. Hodge Assistant City Attorney y Miguel A. Pulido Mayor Resolution No. 2014 -XXX Page 2 of 3 AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on , and that said resolution was published in accordance with the Charter of the City of Santa Ana. Date: Clerk of the Council City of Santa Ana 55A -7 Resolution No. 2014 -XXX Page 3 of 3 y •