Agenda packet — Carmel-by-the-Sea City Council, April 4, 2023 (part 2 of 2)

WHEREAS, on March 6, 2020, the County Administrative Officer of Monterey County proclaimed a Local Emergency due to the threat of COVID-19 in the County; and WHEREAS, on March 11, 2020, the World Health Organization (“WHO”) classified the spread of COVID-19 internationally as a global pandemic; and WHEREAS, on March 12, 2020, the City Administrator of the City of Carmel-bythe-Sea, acting in his capacity as the Director of Emergency Services for the City, declared the existence of a local emergency within the City due to COVID-19; and WHEREAS, on March 13, 2020, the City Council adopted Resolution 2020-021 ratifying the City Administrator’s Proclamation of the Existence of a Local Emergency Due to the Worldwide Spread of the Coronavirus (“COVID-19”); and WHEREAS, the COVID-19 pandemic, including its variants, continues to present an immediate and significant risk to public health and safety, and resulting in serious illness or death to vulnerable populations, especially the elderly and those with underlying health conditions; and
WHEREAS, City Municipal Code Section 1.16.010 provides that every person convicted of a violation of any provision of the Municipal Code may be punished as a misdemeanor with a fine not exceeding $1000 and/or imprisonment for a term not exceeding six month or punished as an infraction with a fine up to $100.00 for each violation, $200.00 for second violation within one year and $500.00 for a third and any subsequent violation within one year; and
WHEREAS, in the absence of actions to mitigate the spread of COVID-19, County wide health services may become overwhelmed and unable to keep up with medical demand for care and availability of hospital or care facility capacity; and WHEREAS, in order to mitigate the spread of COVID-19, it is necessary for the immediate preservation of the public peace, health and safety to adopt rules of conduct at City facilities; and
WHEREAS, the City desires to further combat COVID-19 by establishing safe protocols for conduct within city-owned facilities; and WHEREAS, the City further desires to identify certain city-owned facilities as limited public forums opened to the public for the limited purpose of conducting city business, that this policy for conduct is intended to prevent disruptive conduct that prevents the efficient processing of city business by establishing reasonable time, place, and manner requirements for persons wishing to enter or use such city-owned facilities, and that this policy is not intended to limit rights protected by the First Amendment; and Attachment 2
Ordinance 2023-002

Page 3 ends

WHEREAS, based upon the foregoing, the City Council finds pursuant to Government Code Section 36937 (b) that this to Urgency Ordinance is necessary for the immediate preservation of the public peace, health and safety; and WHEREAS, the City Council has considered all information related to this matter, as presented at the public meetings of the City Council identified herein, including any supporting reports by City staff, and any information provided during public meetings; and WHEREAS, the City Council adopted Urgency Ordinance 2022-001 on February 28, 2022 with Rules of Conduct at City Facilities; and
WHEREAS, the Council adopted Urgency Ordinance 2022-002 on April 4, 2022 amending Section of 7 of Urgency Ordinance 2022-001 with Rules of Conduct for attendance at meeting of Legislative Bodies; and
WHEREAS, Since the adoption of Urgency Ordinance 2022-002, the Monterey County Health Department has deferred their guidance on masking to the California Department of Public Health (“CDPH”) recommendations; and WHEREAS, As of September 23, 2022, the CDPH shifted from a “strong recommendation” for the general population to mask in all indoor settings at all times, to using the CDC Community Levels to help inform masking recommendations: Website:
https://www.cdc.gov/coronavirus/2019-ncov/your-health/covid-by-county.html; and WHEREAS, CDC Community Levels – are updated weekly on Thursday, and are determined by hospital based metric data (COVID-19 hospital admissions, % inpatient beds occupied with COVID-19, new cases per 100,000 population), and are intended to “provide a broad framework for jurisdictions to use and adapt...based on local needs”; and
WHEREAS, the three CDC Community Levels may be summarized as follows:

Low – recommendations focus on best practices for prevention and control, vaccinations
Medium – strengthens emphasis on protecting people are
immunocompromised, enhanced prevention measures for high-risk settings High – focus on wearing masks indoors in public and providing added protection to populations at high risk
WHEREAS, on November 1, 2022, the City Council adopted Urgency Ordinance 2022- 006 (Attachment 1) which has Rules of Conduct for attending meetings of legislative bodies at City Facilities and Section 7.3 requires face covering when the CDC Community Level for the County of Monterey is medium or high as of the date of posting the agenda for the meeting of the legislative body; and
WHEREAS, on February 28, 2023, the Governor of California terminated the State of Emergency due to COVID-19; and
Attachment 2
Ordinance 2023-002

Page 4 ends

WHEREAS, on March 7, 2023 Council requested staff to bring back a draft Urgency Ordinance at the Council meeting on April 4, 2023 to provide that wearing masks to attend meetings of legislative bodies inside of City buildings is only required if the CDC Community level at the time of agenda posting is "high" instead of "medium or high".

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL- BY-THE-SEA DOES ORDAIN AS FOLLOWS:

Section 1: Incorporation of Findings. The City Council of the City of Carmel- bythe-Sea incorporates the Whereas Clauses above by reference as though fully set forth here.

Section 2: Codification. This Ordinance shall not be codified in the Carmel-bythe-Sea Municipal Code.

Section 3: CEQA/Environmental Findings. The City Council exercises its independent judgment and finds that this Urgency Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, sections: 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment); 15060(c)(3) (the activity is not a project as defined in Section 15378); and 15061(b)(3), because the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The proposed Urgency Ordinance maintains the status quo and prevents changes in the environment pending the completion of the contemplated municipal code review. Because there is no possibility that this Urgency Ordinance may have a significant adverse effect on the environment, the adoption of this Urgency Ordinance is exempt from CEQA.

Section 4. Authority Pursuant to Applicable Law. Pursuant to California Government Code Section 8610, the City, while in a state of emergency proclaimed by the Director of Emergency Services and ratified by the City Council, may establish rules and regulations for dealing with the local emergency. The City Council finds and determines that it has the authority to enact this Urgency Ordinance pursuant to all applicable laws including, but not limited to, the California Emergency Services Act, the City Municipal Code, the declaration of local emergency issued by the City Council on March 13, 2020, Government Code Section 36937 (b) and the Findings set forth herein.

Section 5. Local Emergency. A local emergency continues to exist throughout the City, and the City has been undertaking, and will continue through cessation of this emergency to undertake, necessary measures and incur necessary costs, which are directly related to the prevention of the spread of the COVID-19 Virus and are taken in furtherance of: the Governor’s Proclamation of a State of Emergency on March 4, 2020; the President of the United States’ Declaration of a National Emergency on March 13, 2020; the City Council Resolution 2020-021 declaring the existence of a local emergency with the City due to COVID 19, the Orders issued by the Governor, State Public Health Officer and the County Public Health Officer due to COVID-19 and all applicable laws.

Attachment 2
Ordinance 2023-002

Page 5 ends

Section 6. Powers of City Director of Emergency Services. During the existence of the local emergency due to COVID-19, the powers, functions, and duties of the City Director of Emergency Services shall be those prescribed by state law, ordinances, and resolutions of this City notwithstanding otherwise applicable procedures, timelines or methods of action and the City Director of Emergency Services is expressly authorized to take any and all actions in furtherance of emergency powers to address the local emergency.

Section 7. Rules of Conduct for Attending Meetings of Legislative Bodies at City Facilities. It is hereby ordered and ordained that the following rules of conduct shall apply to attendance at meetings of Legislative Bodies at City facilities, as defined herein:

7.1 City Facility. For purposes of this Urgency Ordinance, the term “City Facility” or “City Facilities” means City Hall and any other property owned by the City where there is a meeting held of a Legislative Body.

7.2. Legislative Body. For purposes of this Urgency Ordinance, the term “Legislative Body” means the City Council, Planning Commission, Forest and Beach Commission, Historic Resources Board, Harrison Memorial Library Board of Trustees, Community Activities Commission and the Building Code Board of Appeals.

7.3 Face Covering. No person shall be permitted to enter or remain in City Facility at a meeting of a Legislative Body unless that person wears a face covering which covers both the mouth and nose at all times when the CDC Community Level for the County Monterey is high as of the date of posting the agenda for the meeting of the Legislative Body. The agenda will state the CDC Community Level and whether a face covering will be required for attendance at that meeting of the Legislative Body. Upon request, the City will provide anyone seeking to enter City Facility to attend a meeting of a Legislative Body with a face covering if they do not have one.

7.4 If anyone is unable or unwilling to comply with the requirements of this Section 7, they may attend the meeting remotely in the manner described in the Agenda posted for the meeting.

SECTION 8. Violations of this Urgency Ordinance shall be punishable as set forth in the City Municipal Code Section 1.16.010 and Section 2.64.100. In addition, persons who do not follow the Rules of Conduct set forth in this Urgency Ordinance must remain outside city-owned facilities or may be considered trespassers subject to removal by peace officers or any other method authorized under this Urgency Ordinance or under Government Code section 37359.

Section 9. Authorization of City Code Compliance Coordinator. Pursuant to California Penal Code § 836.5, the City Code Compliance Coordinator is authorized to issue criminal citations following the procedures set forth in California Penal Code §§ 853.5 through 853.6a, or such other procedures as the State of California may Attachment 2
Ordinance 2023-002

Page 6 ends

subsequently enact for violations of this Urgency Ordinance and violations of any section of the City Municipal Code or violation of any City ordinance.

Section 10. Authorization of City Director of Emergency Services. The City Director of Emergency Services and his/her designee(s) are hereby authorized to take all necessary action to implement and enforce this Urgency Ordinance.

Section 11. Severability. If any section, subsection, sentence, clause, or phrase of this Urgency Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of Urgency Ordinance. The City Council declares that it would have passed this Urgency Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of this Urgency Ordinance would be subsequently declared invalid or unconstitutional.

Section 12. Urgency Ordinance 2022-001 and Urgency Ordinance 2022-002 and Urgency Ordinance 2022-006 are hereby repealed.

Section 13. Effective Date and Duration. This Urgency Ordinance enacted under California Government Code Section 36937 will take effect immediately upon adoption by a four fifths (4/5) vote of the City Council. This Urgency Ordinance will remain in effect until rescinded by the City Council.

Section 14. Publication. The City Clerk is directed to certify this Urgency Ordinance and cause it to be published in the manner required by law.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL BYTHE-SEA this 4th day of April 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:

Dave Potter Nova Romero, MMC
Mayor City Clerk
Attachment 2

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
URGENCY ORDINANCE NO. 2022-
0062023-002
URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA RESCINDING URGENCY ORDINANCE NO. 2022-006 AND ADOPTING

RULES OF CONDUCT FOR ATTENDING MEETINGS OF LEGISLATIVE BODIES AT

CITY FACILITIES
WHEREAS, the City of Carmel-by-the-Sea (“City”) is authorized by Article XI, Section 7 of the California Constitution to make and enforce all regulations and ordinances using its police powers; and
WHEREAS, the California Emergency Services Act (California Government Code Section 8550, et. seq.) defines a local emergency as “the existence of conditions of disaster or of extreme peril to the safety of persons and property within the territorial limits of a city, caused by conditions such as an epidemic, [emphasis added] which are or are likely to be beyond the control of the services, personnel, equipment, and facilities of a city, and require the combined forces of other political subdivisions to combat”; and WHEREAS, Section 2.64.020 of the City Municipal Code defines “emergency” as the “actual or threatened existence of conditions of disaster or of extreme peril to the safety of persons and property within this City caused by such conditions as air pollution, fire, flood, storm, epidemic, [emphasis added] riot, earthquake, or other conditions, including conditions resulting from war or imminent threat of war, but other than conditions resulting from a labor controversy, which conditions are or are likely to be beyond the control of the services, personnel, equipment, and facilities of this City, requiring the combined forces of other political subdivisions to combat”; and WHEREAS, Government Code section 37359 allows cities to “limit the access or use [of city-owned property] in area or time or in any reasonable manner deemed necessary” and enforce such limitations through trespass law; and WHEREAS, in December 2019, reports began spreading worldwide about a flulike virus first found in China that was significantly more deadly than the flu generally, with the virus becoming known as the Coronavirus (“COVID-19”); and WHEREAS, the federal Centers for Disease Control and Prevention (“CDC”) has confirmed thousands of cases of individuals who have severe respiratory illness caused by COVID-19, as well as deaths caused by this illness; and WHEREAS, on or about March 4, 2020, as part of the State of California’s response to address the global COVID-19 outbreak, Governor Gavin Newsom declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for broader spread of COVID-19; and

REDLINE VERSION
Attachment 3
Ordinance 2022-
0062023-002
WHEREAS, on March 6, 2020, the County Administrative Officer of Monterey County proclaimed a Local Emergency due to the threat of COVID-19 in the County; and WHEREAS, on March 11, 2020, the World Health Organization (“WHO”) classified the spread of COVID-19 internationally as a global pandemic; and WHEREAS, on March 12, 2020, the City Administrator of the City of Carmel-bythe-Sea, acting in his capacity as the Director of Emergency Services for the City, declared the existence of a local emergency within the City due to COVID-19; and WHEREAS, on March 13, 2020, the City Council adopted Resolution 2020-021 ratifying the City Administrator’s Proclamation of the Existence of a Local Emergency Due to the Worldwide Spread of the Coronavirus (“COVID-19”); and WHEREAS, the COVID-19 pandemic, including its variants, continues to present an immediate and significant risk to public health and safety, and resulting in serious illness or death to vulnerable populations, especially the elderly and those with underlying health conditions; and
WHEREAS, City Municipal Code Section 1.16.010 provides that every person convicted of a violation of any provision of the Municipal Code may be punished as a misdemeanor with a fine not exceeding $1000 and/or imprisonment for a term not exceeding six month or punished as an infraction with a fine up to $100.00 for each violation, $200.00 for second violation within one year and $500.00 for a third and any subsequent violation within one year; and
WHEREAS, in the absence of actions to mitigate the spread of COVID-19, County wide health services may become overwhelmed and unable to keep up with medical demand for care and availability of hospital or care facility capacity; and WHEREAS, in order to mitigate the spread of COVID-19, it is necessary for the immediate preservation of the public peace, health and safety to adopt rules of conduct at City facilities; and
WHEREAS, the City desires to further combat COVID-19 by establishing safe protocols for conduct within city-owned facilities, including requiring persons wear a face covering at all times covering the mouth and nose, before entry or remaining within cityowned facilities; and; and WHEREAS, the City further desires to identify certain city-owned facilities as limited public forums opened to the public for the limited purpose of conducting city business, that this policy for conduct is intended to prevent disruptive conduct that prevents the efficient processing of city business by establishing reasonable time, place, and manner requirements for persons wishing to enter or use such city-owned facilities, and that this policy is not intended to limit rights protected by the First Amendment; and

REDLINE VERSION
Attachment 3
Ordinance 2022-
0062023-002
WHEREAS, based upon the foregoing, the City Council finds pursuant to Government Code Section 36937 (b) that this to Urgency Ordinance is necessary for the immediate preservation of the public peace, health and safety; and WHEREAS, the City Council has considered all information related to this matter, as presented at the public meetings of the City Council identified herein, including any supporting reports by City staff, and any information provided during public meetings; and WHEREAS, the City Council adopted Urgency Ordinance 2022-001 on February 28, 2022 with Rules of Conduct at City Facilities; and
WHEREAS, the Council adopted Urgency Ordinance 2022-002 on April 4, 2022 amending Section of 7 of Urgency Ordinance 2022-001 with Rules of Conduct for attendance at meeting of Legislative Bodies; and
WHEREAS, Since the adoption of Urgency Ordinance 2022-002, the Monterey County Health Department has deferred their guidance on masking to the California Department of Public Health (“CDPH”) recommendations; and WHEREAS, As of September 23, 2022, the CDPH shifted from a “strong recommendation” for the general population to mask in all indoor settings at all times, to using the CDC Community Levels to help inform masking recommendations: Website:
https://www.cdc.gov/coronavirus/2019-ncov/your-health/covid-by-county.html; and WHEREAS, CDC Community Levels – are updated weekly on Thursday, and are determined by hospital based metric data (COVID-19 hospital admissions, % inpatient beds occupied with COVID-19, new cases per 100,000 population), and are intended to “provide a broad framework for jurisdictions to use and adapt...based on local needs”; and
WHEREAS, the three CDC Community Levels may be summarized as follows:

REDLINE VERSION
Attachment 3
Ordinance 2022-
0062023-002
• Stay up to date with COVID-19 vaccines
• Get tested if you have symptoms
• People may choose to mask at any time
• People with symptoms/positive test/exposure should wear a mask WHEREAS, on November 1, 2022, the City Council adopted Urgency Ordinance 2022- 006 (Attachment 1) which has Rules of Conduct for attending meetings of legislative bodies at City Facilities and Section 7.3 requires face covering when the CDC Community Level for the County of Monterey is medium or high as of the date of posting the agenda for the meeting of the legislative body; and
WHEREAS, on February 28, 2023, the Governor of California terminated the State of Emergency due to COVID-19; and
WHEREAS, on March 7, 2023 Council requested staff to bring back a draft Urgency Ordinance at the Council meeting on April 4, 2023 to provide that wearing masks to attend meetings of legislative bodies inside of City buildings is only required if the CDC Community level at the time of agenda posting is "high" instead of "medium or high".

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL- BY-THE-SEA DOES ORDAIN AS FOLLOWS:

Section 1: Incorporation of Findings. The City Council of the City of Carmel- bythe-Sea incorporates the Whereas Clauses above by reference as though fully set forth here.

Section 2: Codification. This Ordinance shall not be codified in the Carmel-bythe-Sea Municipal Code.

Section 5. Local Emergency. A local emergency continues to exist throughout the City, and the City has been undertaking, and will continue through cessation of this

REDLINE VERSION
Attachment 3
Ordinance 2022-
0062023-002
emergency to undertake, necessary measures and incur necessary costs, which are directly related to the prevention of the spread of the COVID-19 Virus and are taken in furtherance of: the Governor’s Proclamation of a State of Emergency on March 4, 2020; the President of the United States’ Declaration of a National Emergency on March 13, 2020; the City Council Resolution 2020-021 declaring the existence of a local emergency with the City due to COVID 19, the Orders issued by the Governor, State Public Health Officer and the County Public Health Officer due to COVID-19 and all applicable laws.

REDLINE VERSION
Attachment 3
Ordinance 2022-
0062023-002
Section 6. Powers of City Director of Emergency Services. During the existence of the local emergency due to COVID-19, the powers, functions, and duties of the City Director of Emergency Services shall be those prescribed by state law, ordinances, and resolutions of this City notwithstanding otherwise applicable procedures, timelines or methods of action and the City Director of Emergency Services is expressly authorized to take any and all actions in furtherance of emergency powers to address the local emergency.

7.3 Face Covering. No person shall be permitted to enter or remain in City Facility at a meeting of a Legislative Body unless that person wears a face covering which covers both the mouth and nose at all times when the CDC Community Level for the County Monterey is medium or high as of the date of posting the agenda for the meeting of the Legislative Body. The agenda will state the CDC Community Level and whether a face covering will be required for attendance at that meeting of the Legislative Body. Upon request, the City will provide anyone seeking to enter City Facility to attend a meeting of a Legislative Body with a face covering if they do not have one.

7.4 If anyone is unable or unwilling to comply with the requirements of this Section 7, they may attend the meeting remotely in the manner described in the Agenda posted for the meeting.

REDLINE VERSION
Attachment 3
Ordinance 2022-
0062023-002
subsequently enact for violations of this Urgency Ordinance and violations of any section of the City Municipal Code or violation of any City ordinance.

Section 12. Urgency Ordinance 2022-001 and Urgency Ordinance 2022-002 and Urgency Ordinance 2022-006 are hereby repealed.

Section 14. Publication. The City Clerk is directed to certify this Urgency Ordinance and cause it to be published in the manner required by law.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL BYTHE-SEA this 1st4th day of November 2022April 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:

Dave Potter Nova Romero, MMC
Mayor City Clerk

REDLINE VERSION
Attachment 3

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
April 4, 2023

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Robert Harary, P.E, Director of Public Works APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Scout House Request for Proposals, and Resolution of Intent to Lease Real Property and Surplus Lands Act Resolution, and CEQA findings RECOMMENDATION:

After the Public Hearing, City Council will be asked to:
(1) Adopt Resolution 2023-040, authorizing the City Administrator to issue a Request for Proposals seeking technical Proposals to enter into an Operations and Maintenance Agreement and Site Lease with the City for Renovation and subsequent Activities Programming, Operations, and Maintenance of the Scout House; and
(2) Adopt Resolution 2023-042, declaring Scout House Real Property Exempt Surplus Land; and (3) Find that these actions do not constitute a “project” as defined by the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(b) and are also exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3) and 15301.

BACKGROUND/SUMMARY:

Background:

One of the City Council’s Strategic Priorities is to “Explore Opportunities for the Scout House.” Staff has prepared the Request for Proposals (RFP) in Attachment #3 seeking technical Proposals to enter into an Operations and Maintenance Agreement (“O&M”) with the City for the renovation/restoration of the Scout House and for subsequent activities programming, operations, management, and maintenance of the facility. The rough cost estimate required to renovate the Scout House is $400,000 - $500,000; however, no City funding is proposed. The selected Proposer/Contractor signing the O&M Agreement will also need to agree to a Site Lease to cover the duration of their occupation of the Scout House, such that they are the City’s Lessee.

The Scout House is a multi-use facility located at the northeast corner of Mission Street and Eighth Avenue.

The Scout House was built in 1931 by Carmel Masterbuilder M.J. Murphy. The building has a large room, working fireplace, and a full kitchen, and is a completely contained unit; however, the building has not been in operation for many years. Staff has been exploring ways to find a Contractor to renovate the Scout House.

A proposed O&M Agreement and Site Lease are attached to the RFP as Appendix 6 and 7, respectively.

The RFP requests proposed edits to the draft agreements from Proposers. Staff is seeking Council approval to issue the RFP and follow the process outlined below to award the O&M Agreement and Site Lease.

The key terms of the RFP, O&M Agreement, and Site Lease are as follows:

Key RFP Terms:

1. A mandatory Pre-Proposal meeting will be held, and the Scout House will be open for the remainder of the day, for Proposers to take photographs and measurements inside.

2. Selection of the Contractor will be via a qualifications-based selection process. An Evaluation Committee will review all responsive Proposals received, focusing on the qualifications and experience of their Project Team, the technical approach to design and renovation of the facility, approach to activities programming and facility management/maintenance of the facility, and their funding availability.

3. The RFP makes it clear that the facility is a Historic Resource and is subject to the City’s Historic Preservation Ordinance Chapter 17.32. Improvements may require review by the City’s Historic Resources Board and/or Planning Commission.

4. The RFP outlines numerous requirements for the renovation. The most challenging aspects of the renovation include:

ADA compliance: An elevator or lift may be required. The east wall may also need to be moved to allow for an ADA-compliant parking space on site.

Part of the downstairs has a low ceiling height which allows for storage but is not habitable space unless this portion of the building undergoes costly structural renovations. This could trigger seismic upgrade requirements.

Electrical/lighting, mechanical, and plumbing systems need reconstruction Contractor to remediate any hazardous materials
Site work repairs and modifications to utilities are anticipated The site is very confined as a staging area for the renovation work

5. A Performance Bond will be required prior to the renovation to ensure that the renovation work, once started, is completed.

6. Proposed activities are likely to include the Boy Scouts; however, the RFP stresses the importance of providing a mix of other community-based activities such that no one organization fully dominates the use of the renovated facility.

7. The successful Proposer may need to present their recommendations for primary and secondary uses of the renovated facility to the Community Activities Commission prior to award of the O&M Agreement and Site Lease.

8. The Contractor would be expected to pay ongoing facility maintenance costs including: custodial, alarm monitoring, pest control, landscape maintenance, water, gas, and electric utilities, and minor building repairs.

The City should continue to pay for trash/recycling and sewer service.

9. The Contractor may be required to pay Possessory Interest Tax to Monterey County.

Key O&M Agreement Terms:

The O&M Agreement includes provisions addressing, among others, the following topics.

1. The term of the O&M Agreement will be ten (10) years, with the City having an annual option to extend the Agreement for an additional year for the first five years after the initial ten years conclude. Proposers may recommend alternative time frames.

2. Contractor will also execute a Site Lease to facilitate its renovation of the facility. See Site Lease section below.

3. Contractor will bear the full costs of performing the renovation work.

4. Contractor will comply with existing City regulations concerning how the renovation planning, design, permitting, and construction work will proceed.

5. Contractor will identify the personnel expected to work on the project.

6. Contractor will provide required insurance.

7. Contractor will indemnify City for any losses caused by Contractor’s negligence, recklessness, or willful misconduct.

8. Contractor will obtain a business license from the City.

9. Any disputes will be resolved via mediation and arbitration.

10. City will have the right to terminate the O&M Agreement at any time in its sole discretion.

Key Site Lease / Rent Terms:

The RFP requests that the Contractor signing the O&M Agreement also agree to sign a Site Lease to cover the duration of their occupation of the Scout House, such that they are the City’s Lessee. Under the proposed Site Lease, the Contractor would agree to pay fair market rent for the use and enjoyment of the Scout House.

To offset the cost of paying fair market rent, the Site Lease would authorize the Contractor to undertake various fundraising activities, including, for example, the sale of naming rights of various interior portions of the facility, and the use of the facility for commercial purposes consistent with existing zoning (Residential and Limited Commercial), including a potential sublease of the facility, if desired. This would allow the Lessee to generate revenue once the renovation work on the premises is complete.

The amount of fair market rent to be charged could also take into account that the Contractor would be agreeing to pay the costs of conducting various capital improvements under the terms of the O&M Agreement and the fact that the City will be entitled to use the facility for one day each month.

Process:

If the Council approves issuing the RFP, the City would follow the following process for issuance of the RFP and award of the O&M Agreement and Site Lease.
a. Approval of Lease of Real Property: Pursuant to Government Code Section 52201, a City Council may lease real property to create an economic opportunity. Such a process must be approved by the City Council by Resolution after a Public Hearing. Notice of the time and place of the hearing must be published in a newspaper of general circulation in the community at least once per week for at least two successive weeks. Among other things, the Notice must include the transactional costs to the City of the lease and the estimated value of the interest to be leased, determined at the highest and best uses permitted under the general plan or zoning, and an explanation of why the lease of the property will assist in the creation of economic opportunity. In this case, the City published such notice in the Carmel Pine Cone newspaper on March 24th and March 31st. Attachment #1 is Resolution 2023-040 for Intention to Lease Real Property. b. Adoption of Surplus Lands Act Resolution: The City lease of the Scout House property is subject to the Surplus Lands Act (“Act”) but is likely exempt due to the City’s ongoing use of the property so long as the City follows required procedures to confirm the exemption. Under guidelines issued by the California Department of Housing and Community Development (“HCD”), prior to disposition of exempt surplus land, public agencies must adopt a resolution supported by written findings determining the property exempt and must provide a copy of the resolution to HCD at least thirty days prior to disposition. While not expressly stated, the Act appears to suggest that if HCD does not notify the agency that the exemption determination violates the Act within 30 days, the agency receives “safe harbor” that it has complied with the law, and is not subject to the penalty provisions.

Accordingly, at the same time the City Council approves the issuance of a Request for Proposals for a Site Lease, the City Council should also adopt the required Surplus Lands Act Resolution and transmit it to HCD at least 30 days before the City intends to award the O&M Agreement and approve the Site Lease. Attachment #2 is Resolution 2023-042 which meets the Surplus Lands Act requirements.
c. Award of O&M Agreement and Approval of Lease: After staff has received and evaluated proposals in response to the RFP, and should the City Council proceed with an award of the O&M Agreement and approval of a Site Lease, the City Council Resolution approving the Site Lease must be adopted by a majority vote and include a finding that the lease of the property will assist in the creation of economic opportunity, and that the lease price is not less than the fair market value at its highest and best use.

Environmental Impact:

The proposed actions do not constitute a “project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(b), a project does not include organizational or administrative activities of governments that will not result in direct or indirect physical changes on the environment. However, prior to commencing renovations at the Scout House, the City will complete all necessary reviews pursuant to CEQA.

Even if this action is a project, it is exempt from CEQA review pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the action may have a significant effect on the environment, and the action is also categorically exempt pursuant to the existing facilities exemption in CEQA Guidelines Section 15301 as the action is limited to repairs, maintenance and minor alterations to the existing Scout House that involve negligible or no expansion of existing or former use.

FISCAL IMPACT:

None by these Actions. The selected Proposer/Contractor would bear the full cost for the renovation work.

PRIOR CITY COUNCIL ACTION:

Council considered this item in Closed Session at the March 6, 2023 Special Council Meeting. There was no reportable action.

ATTACHMENTS:

Attachment 1) Resolution 2023-040
Attachment 2) Resolution 2023-042
Attachment 3) Scout House RFP, O&M Agreement, and Site Lease

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2023-040

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA APPROVING

THE ISSUANCE OF A REQUEST FOR PROPOSALS SEEKING PROPOSALS TO LEASE THAT CERTAIN EXEMPT REAL PROPERTY KNOWN AS THE ‘SCOUT HOUSE,’ LOCATED AT THE

NORTHEAST CORNER OF MISSION STREET AND EIGHTH AVENUE
WHEREAS, the City of Carmel-By-The-Sea (“City”) is the owner of certain real property in Monterey County commonly known as the Scout House, located at the northeast corner of Mission Street and Eighth Avene, Carmel-By-The-Sea, California (a portion of APN number 010-143-001) (the “Property”); and
WHEREAS, City staff recommends issuance of a Request for Proposals (“RFP”) to lease the Property in accordance with the terms of this Resolution in order to create an economic opportunity for the City; and
WHEREAS, the City Council has reviewed and considered the form of RFP soliciting proposals to lease the Property, which attaches a proposed Operations and Maintenance Agreement and Site Lease (“Site Lease”) to be entered into with a lessee (“Lessee”).

NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA AS FOLLOWS:

Section 1. The foregoing recitals are adopted as true and correct and are a substantive part of this Resolution.

Section 2. The City hereby declares its intent to lease the Property in order to create an economic opportunity for the City.

Section 3. In advance of the RFP deadline for proposals, the City shall publish Notice of Intent to Lease Exempt Surplus Real Property setting forth the minimum lease price, and other key proposed terms and conditions of the Site Lease, together with the public process for opening and consideration of proposals from potential lessees.

Section 4. The City Administrator or his designee is authorized and directed to execute all documents required to issue the RFP, to conduct the proposal review process, and to return to the City Council for approval of any recommended Site Lease.

Section 5. This Resolution shall take effect immediately upon its adoption.

Attachment 1
Resolution 2023-040

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PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 4 th day of April 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
_______________________ _______________________
Dave Potter Nova Romero, MMC
Mayor City Clerk
Attachment 1

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2023-042

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA

AFFIRMING COMPLIANCE WITH THE STATE SURPLUS LANDS ACT FOR THE SCOUT HOUSE
WHEREAS, the City of Carmel-By-The-Sea (“City”) complies with the general laws of the State of California, including the Surplus Property Land Act; and WHEREAS, the City is owner in fee simple of that certain real property in Monterey County commonly known as the Scout House, located at the northeast corner of Mission Street and Eighth Avenue, Carmel-By-The-Sea, California, (a portion of APN number 010-143-001) (the “Property”); and
WHEREAS, under the Surplus Property Land Act, Government Code Sections 54220- 54233 (“Act”), surplus land is land owned in fee simply by a public agency for which the public agency’s governing board takes formal action in a regular public meeting declaring the land is surplus and not necessary for the agency’s use; and
WHEREAS, under the Act, land is exempt surplus property if it is necessary for an agency’s use if the land is being used, or is planned to be used pursuant to a written plan adopted by the public agency’s governing body, for the public agency’s work or operations, including use “for the sole purpose of investment or generation of revenue;” and WHEREAS, the Property is currently being used by the City; and WHEREAS, the City intends to continue to use the Property for the purpose of generation of revenue pursuant to a Lease Agreement to be entered into with a Lessee pursuant to which the Lessee will make needed renovations to the Property and make the Property available for the City’s periodic use; and
WHEREAS, by entering into the Lease Agreement with Lessee and adopting this Resolution, the City is adopting a written plan for the ongoing use of the Property as required to demonstrate existing and planned “use” of the Property under the Act, rendering the Property exempt surplus land under the Act; and
WHEREAS, under the Act, land is exempt surplus property if it is necessary for an agency’s use if the land is being used, or is planned to be used pursuant to a written plan adopted by the agency’s Board of Directors, for agency work or operations, including use “for the sole purpose of investment or generation of revenue”; and WHEREAS, the accompanying staff report provides supporting information upon which the declaration and findings set forth in this Resolution are based.

NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AS FOLLOWS:

Attachment 2
Resolution 2023-042

Page 2 ends

Section 1. The above recitals are true and correct and are a substantive part of this Resolution.

Section 2. The City Council hereby declares that the Scout House Property is exempt surplus land for the purposes of the California Surplus Lands Act (Government Code Section 54220 et seq.) because it is presently being “used” and is “intended to be used” by the City for other public uses and continues to be necessary for the City’s use. The basis for this declaration is that the City intends to use the Property pursuant to the Lease Agreement for the purpose of generation of revenue for the City.

Section 3. The City Council hereby declares that the use of the Property will directly further the express purpose of City work and operations.

Section 4. The City Council hereby adopts the written plan described in this Resolution and in the accompanying staff report for the ongoing use of the Property as required to demonstrate existing and planned “use” of the Property under the Act.

Section 5. This Resolution has been reviewed with respect to the applicability of the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) (“CEQA”).

City staff has determined that the proposed actions do not constitute a “project” as defined by the CEQA. Adoption of this Resolution does not have the potential for resulting in either a direct physical change on the environment or a reasonably foreseeable indirect physical change on the environment. Prior to commencing renovations of the Property contemplated by the Lease Agreement, the City will complete all necessary reviews in accordance with CEQA.

Section 6. The City Clerk is directed to provide a copy of this Resolution to the California Department of Housing and Community Development for its review.

Section 7. The officers and staff of the City are hereby authorized, jointly and severally, to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution, and any such actions previously taken are hereby ratified and confirmed.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 4th day of April 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
_______________________ ___________________________
Dave Potter Nova Romero, MMC
Mayor City Clerk
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CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
April 4, 2023

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Maxine Gullo, Ass't. City Administrator
APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Resolution 2023-041 Establishing the Electronic Form of Payment (Online) and Amending the Credit Card Fee in the Adopted Administrative Fee Schedule RECOMMENDATION:

Consider adoption of Resolution 2023-041 Establishing the Electronic Form of Payment (Online) and Amending the Credit Card Fee in the Adopted Administrative Fee Schedule.

BACKGROUND/SUMMARY:

Every three years, the State adopts new building model codes to establish uniform standards for construction and maintenance. Changes to the model code affect all new building permit applications submitted on or after January 1st, 2023. California Administrative Code Section 1-507 Fee Collection was amended to remove the check-only payment method and added instructions for submitted payment and forms by mail (check) or email (electronic payment platform), and let fee payers know that they may only use the approved electronic payment platform, and that there is information regarding the platform on CBSC’s website.

To be compliant, Community Planning & Building must now offer to receive electronic (online) payments through the City’s website for permits and fees. Credit card and debit card processing fees for online payments is 3.5% with our current permit management software. At this time, the City’s Fee Schedule authorizes only 2.5% of charged amount for Use of Credit Card/Debit Card. As this increase only applies to online payments made to the Community Planning & Building Department, it is recommended that the City’s Fee Schedule be amended to reflect the 3.5% of charges amount for Use of Credit Card/Debit Card and establish the 3.5% of charges amount for electronic (online) payments through the City’s website.

Although the City has hired Revenue and Cost Specialists, LLC (“RCS”) to prepare a cost of services study, the master fee schedule with any modification, additions and/or changes to fees will be brought forward separately as part of the FY 23/24 Operating Budget discussion and approval. This fee is being brought forward due to the January 1, 2023 implementation.

FISCAL IMPACT:

Since the Use of Credit Card/Debit Card transactional fees are passed directly to the applicant, there is no fiscal impact to the City.

PRIOR CITY COUNCIL ACTION:

Council adopted the Fiscal Year 2022-2023 Fee Schedule for Administrative Services, Community Planning and Building, Public Safety and Public Works Services on May 3, 2022 (Resolution 2022-041).

ATTACHMENTS:

Attachment 1) Resolution 2023-041
Attachment 2) Exhibit A

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2023-041

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA

AUTHORIZING TO ESTABLISH THE ELECTRONIC (ONLINE) PAYMENT AND AMEND

USAGE OF CREDIT CARD FEES IN THE ADOPTED ADMINISTRATIVE FEE SCHEDULE WHEREAS, every three years, the State of California adopts new building model codes to establish uniform standards for construction and maintenance; and WHEREAS, Changes to the model code affect all new building permit applications submitted on or after January 1st, 2023; and
WHEREAS, California Administrative Code Section 1-507 Fee Collection was amended to remove the check-only payment method and added instructions for submitted payment and forms by mail (check) or email (electronic payment platform); and WHEREAS, to be compliant, Community Planning & Building must now offer to receive electronic (online) payments through the City’s website for permits and fees; and WHEREAS, credit card and debit card processing fees for online payments is 3.5% with our current permit management software. At this time, the City’s Fee Schedule authorizes only

2.5% of charged amount for Use of Credit Card/Debit Card; and WHEREAS, pursuant to Government Code 66016, the specific fees to be charged for services must be adopted by the City Council by Resolution, after providing notice and holding a public hearing; and
WHEREAS, a notice of public hearing has been published in the Carmel Pine Cone on March 23, 2023 per California Government Code 6062a, oral and written presentations made and received, and the required public hearing held on April 4, 2023.

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

Section 1. Fee Schedule Adoption. The following schedule of fees and charges are hereby directed to be computed by and applied by the various City departments, and to be collected by the City Finance Department for the herein listed special services when provided by the City or its designated contractors.

Section 2. Separate Fee for Each Process. All fees set forth by this resolution are for each identified process; additional fees shall be required for each additional process or service that is requested or required. Where fees are indicated on a “per unit” of measurement basis, the fee is for each identified unit or portion thereof within the indicated ranges of such units.

Section 3. Listing of Fees. The following fees shall be charged and collected for the following enumerated services, as shown in Exhibit A.

Attachment 1
Resolution No. 2023-041

Page 2 ends

Section 4. Interpretations. This Resolution may be interpreted by the City department heads in consultation with the City Administrator, and, should there be a conflict between two fees, the lower in dollar amount of the two shall be applied.

A. It is the intention of the City Council to review the fees and charges as determined and set out herein based on the City’s next Annual Budget and all the City’s costs reasonably borne as established at that time and, as and if warranted, to revise such fees and charges based thereon.

Section 5. Constitutionality. If any portion of this Resolution is declared invalid or unconstitutional, it is the intention of the City Council to have passed the entire Resolution and all its component parts, and all other sections of this Resolution shall remain in full force and effect.

Section 6. Repealer. All resolutions and other actions of the City Council in conflict with the contents of this Resolution are hereby repealed.

Section 7. Effective Date. This Resolution and fees shall go into full force and effect on May 3, 2023.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA this 4th day of April, 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:

_________________________ _________________________
Dave Potter Nova Romero, MMC
Mayor City Clerk
Attachment 1
Resolution 2023-041 (Pending City Council Approval April 7, 2023) Proposed Fee
TRACK 1 DESIGN REVIEW/STUDY - MINOR $448 per application 448.00 TRACK 1 DESIGN REVIEW/STUDY - MAJOR $813 per application 813.00 TRACK 1 DESIGN REV/STUDY-STREAMLINE $203 per application 203.00 TRACK 1 DESIGN REV/STUDY - REFERRAL TO PLANNING

COMMISSION
$1,120 per application in addition to the base Track 1 fee 1,120.00
TRACK 1 DESIGN REV/STUDY-REFERRAL TO HISTORIC

RESOURCES BOARD
$1,120 per application in addition to the base Track 1 fee 1,120.00
TRACK 2 DESIGN REVIEW - MINOR $2,360 per application 2,360.00 TRACK 2 DESIGN REVIEW - MAJOR $5,392 per application 5,392.00 TRACK 2 DESIGN REV - MAJOR NEW COMMERCIAL BUILDING $2,438 per application plus a deposit determined by staff with charges at the fully allocated hourly rates for Project Planner 2,438.00
PRELIMINARY SITE ASSESSMENT $1,183 per application 1,183.00 VOLUMETRIC ANALYSIS $135 per application plus $1,500 deposit with charges at the fully allocated hourly rates plus any outside costs. 135.00
USE PERMIT $2,730 per application 2,730.00
USE PERMIT AMENDMENT $1,818 per application 1,818.00
TEMPORARY USE PERMIT $365 per application 365.00
RESTRICTED COMM USE TRANSFER REQUEST $521 per application 521.00 WATER CREDIT TRANSFER REQUEST $3,663 per application 3,663.00 VARIANCE $2,235 per application 2,235.00
PRE-APPLICATION REVIEW - STAFF $1,683 per application with 50% of this fee credited towards future planning fees for this project. 1,683.00 PRELIMINARY REVIEW - PLANNING COMMISSION $3,485 per application with 50% of this fee credited towards future planning fees for this project. 3,485.00 COASTAL DEV. PERMIT - DEVELOPMENT $135 per application - Added to other Planning fees 135.00 COASTAL DEV. PERMIT - EVENT $1,417 per application 1,417.00 TOBACCO RETAIL LICENSE Current fee as adopted by the Monterey County Board of Supervisors SPECIFIC PLAN/SPECIFIC PLAN AMENDMENT 5,210.00

GENERAL PLAN AMENDMENT

SPHERE OF INFLUENCE AMENDMENT

ZONING CODE AMENDMENT
ANNEXATION 10,420.00

DEVELOPMENT AGREEMENT
ENVIRONMENTAL REVIEW (IS/ND/EIR) Contract cost plus 10% ENVIRONMENTAL NOTICE OF EXEMPTION $156 per application plus County fees 156.00 MITIGATION MONITORING $3,126 deposit with charges at the fully allocated hourly rates plus outside costs. 3,126.00 TENTATIVE/FINAL MAP $4,168 deposit with charges at the fully allocated hourly rates plus any outside costs. 4,168.00 AMENDED FINAL MAP $1,042 deposit with charges at the fully allocated hourly rates plus any outside costs. 1,042.00 CERTIFICATE OF COMPLIANCE $610 per application plus actual contract cost 610.00 LOT LINE ADJUSTMENT/SUBDIV - PLANNING COMMISSION $542 per application plus actual contract cost 542.00 LOT MERGER - STAFF REVIEW $938 per application plus actual contract cost 938.00 PRELIM (PHASE 1) HISTORICAL EVALUATION - STAFF $474 per application 474.00 PROPOSED FEE SCHEDULE EFFECTIVE JULY 3, 2022 - JUNE 30, 2023

COMMUNITY PLANNING & BUILDING
Design Study and Review
Use Permit and Other Services
Amendments, Annexations and Agreements
$5,210 deposit with charges at the fully allocated hourly rates plus outside costs $10,420 deposit with charges at the fully allocated hourly rates plus outside costs Environmental Review Maps and Lot Lines
Historic Evaluation

EXHIBIT A
Resolution 2023-041 (Pending City Council Approval April 7, 2023) PROPOSED FEE SCHEDULE EFFECTIVE JULY 3, 2022 - JUNE 30, 2023 Proposed Fee PHASE 1 HISTORIC EVALUATION - QUALIFIED PROFESSIONAL $271 per application plus actual cost for Historian review with $1,500 deposit 271.00
PHASE 2 HISTORIC EVALUATION-HISTORIC RESOURCES BOARD
REVIEW
$1,579 per application plus actual cost for Historian review with $1,500 deposit 1,579.00
APPEAL TO HISTORIC RESOURCES BOARD $2,120 per application plus actual cost for Historian review with $1,500 deposit 2,120.00 MILLS ACT CONTRACT PROCESSING $3,584 per application 3,584.00 PLANNING COMMISSION CODE DETERMINATION $1,214 per application 1,214.00 ZONING COMPLIANCE DETERMINATION $573 per application 573.00 TIME EXTENSION - STAFF $313 per application 313.00
TIME EXTENSION - PLANNING COMMISSION $907 per application 907.00 TIME EXTENSION - CITY COUNCIL $1,099 per application 1,099.00 PUBLIC HEARING CONTINUANCE - PLANNING COMMISSION $886 per continuance 886.00 PUBLIC HEARING CONTINUANCE - COUNCIL $938 per continuance 938.00 APPEAL TO PLANNING COMMISSION $2,084 per appeal - Appeal in the Coastal Zone - No Charge by State law 2,084.00 APPEAL TO CITY COUNCIL $2,084 per appeal - Appeal in the Coastal Zone - No Charge by State law 2,084.00 SIGN APPLICATION $281 per application 281.00
SIGN REFERRAL TO PLANNING COMMISSION $865 per application 865.00 RELOCATE EXISTING SIGN $182 per application 182.00
TEMPORARY SIGN PERMIT $104 per application 104.00
BUILDING RELOCATION $1,938 per application 1,938.00
LARGE FAMILY DAY CARE (RESIDENTIAL) $761 per application 761.00 GENERAL PLAN UPDATE 3.5% of all Building & Safety permits PLANNING TECHNICAL ASSISTANCE Charge the fully allocated hourly rate for all personnel involved after 15 minutes.

BUILDING PLAN CHECK Based on Building and Safety Construction Valuation BUILDING INSPECTION Based on Building and Safety Construction Valuation BUILDING RE-INSPECTION $146 per re-inspection 146.00
PERMIT APPLICATION EXTENSION $94 per extension (maximum of 4) 94.00 PERMIT EXTENSION $146 per extension (maximum of 2) 146.00 BUILDING PERMIT PRE-APPLIC. CONFER. $318 per application 318.00 BUILDING SINGLE TRADE PERMIT $167 per permit 167.00
ON-SITE DRIVEWAY PERMIT $271 per permit 271.00
Plan Check - $318 318.00
Inspection - $135 135.00
RE-ROOF PERMIT $255 per permit 255.00
BUILDING BOARD APPEAL $1,052 per appeal 1,052.00
DUPLICATE INSPECTION CARD $63 per card 63.00
BUILDING TECHNICAL ASSISTANCE Charge the fully allocated hourly rate for all personnel involved after 15 minutes.

STOP WORK INVESTIGATION $568 per investigation plus double the permit fee 568.00 TEMPORARY CERTIFICATE OF OCCUPANCY $224 per application 224.00 ALTERNATE MATERIALS/METHODS REVIEW $214 per application plus actual cost of City Staff for all time over one hour. 214.00 BUILDING PHASED WORK REQUEST $302 per application 302.00 LANDSCAPE PLAN CHECK/INSPECTION $281 per plan/inspection 281.00 BUILDING TECHNOLOGY SURCHARGE $8 per permit 8.00
Building Services
Determinations, Extensions and Appeals
Sign and Banners

SOLAR PLAN CHECK/INSPECTION PERMIT
Bench Program

EXHIBIT A
Resolution 2023-041 (Pending City Council Approval April 7, 2023) PROPOSED FEE SCHEDULE EFFECTIVE JULY 3, 2022 - JUNE 30, 2023 Proposed Fee NEW BENCH LOCATION $964 per application plus the actual cost of the bench and plaque (plus 20% for future maintenance) plus $1,325 if a public hearing is required. 964.00

ADOPTION OF EXISTING BENCH
$313 per application plus the actual cost of the bench and plaque (plus 20% for future maintenance) plus $580 if a public hearing is
required. 313.00
REPLACEMENT OF BENCH PLAQUE $406 per application plus the actual cost of the plaque plus $380 if a public hearing is required. 406.00 TEMPORARY ENCROACHMENT PERMIT $219 per permit 219.00
Street Excavation - $766 per permit and $4.25/lineal foot 766.00 Other - $432 per permit and $4.25/lineal foot or $432 per permit and $2.13/lineal foot (aerial installation) Plus cost of damage to public right-ofway or street as determined by the Public Works Director. 432.00 TRAFFIC CONTROL PLAN REVIEW/INSPECTION $370 per review plus $210 per each additional review 370.00 USE OF ELECTRONIC PAYMENT (ONLINE) 3.5% OF CHARGED AMOUNT (New!) USE OF CREDIT CARD/ DEBIT CARD 2.5% of CHARGED AMOUNT 3.5% OF CHARGED AMOUNT

TREE REMOVAL PERMIT
$255 per tree removal assessment (initial Forester assessment); $340 per permit for removal of 1-5 trees; $585 per permit for removal of 6 or more trees
255.00
TREE PRUNING REQUEST $255 per permit 255.00

PRUNING OR REMOVAL OF CITY TREE USING PRIVATE FUNDS

UNDER CITY FORESTER INSTRUCTIONS
No permit fee required
-
TREE APPEAL TO FOREST & BEACH COMMISSION $1,485 per appeal plus actual outside costs 1,485.00 TREE APPEAL TO CITY COUNCIL $1,485 per appeal plus actual outside costs 1,485.00 PRIVATE TREE FALL IN PUBLIC RIGHT-OF-WAY Charge the fully allocated hourly rate for all personnel involved plus any outside costs DAMAGE TO CITY PROPERTY Charge the fully allocated hourly rate for all personnel involved plus any outside costs USE OF ELECTRONIC PAYMENT (ONLINE) 3.5% OF CHARGED AMOUNT (New!) USE OF CREDIT CARD/ DEBIT CARD 2.5% of CHARGED AMOUNT 3.5% OF CHARGED AMOUNT First Response - No Charge -
Second Response the same day - $208 per response 208.00 Third Response within a calendar year - $521 per response 521.00 First Activation - $104 104.00
Second Activation - $125 125.00
Each Subsequent Activation in a calendar year - $188 188.00 New - $36 per permit 36.00
Renewal - $26 per permit 26.00
VEHICLE IMPOUND RELEASE $146 per vehicle 146.00
MISDEMEANOR BOOKING Non-Carmel bookings - $156 per booking 156.00 MISCELLANEOUS POLICE PERMIT $193 per application plus DOJ fees 193.00 FINGERPRINTING ON REQUEST $36 plus outside agency fees 36.00 CLEARANCE FORM TRAVEL LETTER $52 per letter 52.00
VIN VERIFICATION $52 per vehicle 52.00
CITATION SIGN-OFF Non-Carmel citations - $26 per citation 26.00 SIGN ABATEMENT $26 per sign 26.00
POLICE COURT WITNESS Fees are set by the court
POLICE REPORT COPY 1st 10 pages - No Charge, Each additional page - $0.20 0.20 Encroachment Permits

PERMANENT ENCROACHMENT PERMIT

PUBLIC WORKS/FORESTRY

PUBLIC SAFETY
Police Services

LOUD PARTY PUBLIC DISTURBANCE RESPONSE

POLICE FALSE ALARM RESPONSE

ALARM PERMIT

EXHIBIT A
Resolution 2023-041 (Pending City Council Approval April 7, 2023) PROPOSED FEE SCHEDULE EFFECTIVE JULY 3, 2022 - JUNE 30, 2023 Proposed Fee POLICE PHOTOGRAPH COPY photo - $5 per photo, digital - $5 per disk 5.00 Within a calendar year: -
First impound - $104 104.00
Second impound - $125 125.00
Third and subsequent impounds - $146 146.00
Local Transport - $26 per transport 26.00
To County Animal Shelter - $94 per transport 94.00
RESIDENT/EMPLOYEE PARKING PERMIT $31 per permit 31.00
$115 Misuse of Residential Permit 115.00
CONTRACTOR PARKING PERMIT $16 non specific 16.00
$26 space specific 26.00
FIRE PLAN CHECK/ REVIEW/INSPECTIONS Current fee schedule as adopted by City of Monterey Council USE OF CREDIT CARD/ DEBIT CARD 2.5% OF CHARGED AMOUNT
Fixed Location - $323 per application + $4 State fee 323.00 In & About - $21 per application 21.00
Home License - $135 per application 135.00
BUSINESS REGISTER RENEWAL PROCESS $16 per renewal 16.00 DUPLICATE BUSINESS LICENSE $10 per license 10.00
CHANGE BUSINESS NAME $21 per business 21.00
NSF CHECK PROCESSING $42 per NSF check 42.00
First 10 copies - No Charge -
Additional copies - $0.20 per copy 0.20
FPPC copies - $0.10 per copy plus $5 for retrieval of documents if more than five years old plus postage cost if mailed 0.10 ELECTRONIC FILE COPY $5 per device 5.00
DOCUMENT CERTIFICATION $10 per document 10.00
RECORD COMPILATION Record Compilation/Creation - charge the fully allocated hourly rate for all personnel involved plus any outside costs.

LOCAL CANDIDATE FILING $25 per candidate- Fee is set by the State 25.00 LOCAL INITIATIVE PROCESSING $200 per initiative- This fee is limited by the State Law - Elections Code Section 9202(b) - Fee is refundable to the filer, if within one year of filing the notice of intent, the elections official certifies the sufficiency of the petition. 200.00 USE OF CREDIT CARD/ DEBIT CARD 2.5% OF CHARGED AMOUNT

ANIMAL IMPOUND
Animal Services
Finance
City Clerk

DOCUMENT REPRODUCTION/SCANNING

ANIMAL TRANSPORT
Parking
Fire Services

ADMINISTRATIVE SERVICES
Business License

NEW BUSINESS REGISTRATION PROCESS

EXHIBIT A

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
April 4, 2023

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Marnie R. Waffle, AICP, Principal Planner APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Consideration of a Mills Act Contract Application, MA 21-238 (L’ Auberge Carmel Hotel), submitted by Mr. David Fink on behalf of Esperanza Carmel Commercial, LLC for the L’ Auberge Carmel Hotel located on Monte Verde Street 2 northeast of 7th Avenue in the Residential and Limited Commercial (RC) Zoning District - Continued from December 6, 2022
RECOMMENDATION:

Accept the recommendation of the Historic Resources Board, and Approve the Mills Act Historical Property Contract MA 21-238 (L’ Auberge Carmel) for the historic “Sundial Lodge” now known as the L’ Auberge Carmel Hotel located on Monte Verde Street 2 northeast of 7th Avenue (APN 010-191-005) and authorize the City Administrator to execute the contract.

BACKGROUND/SUMMARY:

The project site is located on Monte Verde Street 2, northeast of 7th Avenue in the Residential and Limited Commercial (RC) District. The existing hotel is known as L’ Auberge Carmel. It is a three-story, woodframed hotel surrounding an open interior courtyard, designed by architect Albert Farr in the Medieval Revival style and constructed circa 1930 by M.J. Murphy.

A Department of Parks and Recreation (DPR) Form 523A was completed for the property in 2002 by Kent L. Seavey (Attachment 1, Exhibit B), and the property was added to the Carmel Inventory on May 25, 2005.

A Resolution Designating a Historic Resource for the “Sundial Lodge” was recorded with the County Recorder on October 19, 2006 (Document #2006092967).

On July 2, 2021, on behalf of Esperanza Carmel Commercial, LLC, David Fink applied for a Mills Act Historical Property Contract. The Mills Act is an incentive program for owners of historic resources listed on the Carmel Inventory and the local Register of Historic Resources. The property was placed on the local register on September 15, 2003, and the local inventory on May 25, 2005.

On January 24, 2022, the Historic Resources Board adopted Resolution 2022-001-HRB (Attachment 2), recommending that the City Council enter into a Mills Act Contract with Esperanza Carmel Commercial, LLC for the historic “Sundial Lodge” property.

Contract Value
The Monterey County Assessor’s Office determines the value of a property under Mills Act Contract in accordance with sections 439 through 439.4 of the Revenue and Taxation Code. Properties with a Mills Act Contract are not valued based on sales data but by a prescribed income capitalization method (Attachment 3). After the City Council approves a Contract, it is forwarded to the Monterey County Assessor, who determines the Mills Act value.

On March 1, 2022, the Mills Act contract application for L'Auberge Carmel was presented to the City Council with a recommendation to adopt Resolution 2022-024 and enter into a Mills Act contract.

Government Code Section 36936 requires three yes votes to adopt a resolution. The mayor and one council member were recused from the item, requiring the three remaining Councilmembers to vote in the affirmative to pass the Resolution.

During deliberations, concerns were raised regarding the tax implications of entering into the contract, and on a motion to adopt the Resolution, the motion failed by a 2-1 vote. Staff was directed to return to the Council for reconsideration without a Resolution.

Members of the Council also requested that staff obtain a preliminary calculation of Mills Act Contract value to understand the potential local tax revenue offset. The Assessor’s Office typically does not provide preliminary amounts, but in this case, agreed to give an estimate if staff could provide recent income information for the business.

On August 2, 2022, Staff returned to the City Council without a Resolution and without a preliminary calculation of the Mills Act Contract value. At the meeting, the applicant, Mr. Fink, requested that the City Council continue the item to give him additional time to work with the County on a preliminary calculation.

Staff returned to the City Council on December 6, 2022 and the item was again continued.

Staff discussed the Council's request for additional information on numerous occasions with Mr. Fink and also researched the formula for the calculation and provided this information to the Council. If the Council is unable to find that approval of the contract represents an equitable balance of public and private interests and will not result in a substantial adverse financial impact to the City, the Council could deny the request. Staff is bringing forward the recommendation of the Historic Resources Board to approve the request.

STAFF ANALYSIS
A Mills Act contract under State law is an agreement between the City of Carmel and a property owner of an historic building listed on the Carmel Register. The property owner benefits from a reduction in property taxes, and the City is assured that the historic building is rehabilitated, maintained and preserved. All Mills Act contracts shall be established, processed and approved in conformance with California law. The primary purpose for offering Mills Act contracts in the City of Carmel-by-the-Sea is to assist in the rehabilitation or restoration and long-term maintenance of historic resources.

All properties listed on the City’s Historic Register in all districts that have been, and will be, preserved in their historic size, form and design without significant alterations or additions are eligible for Mills Act contracts.

All Mills Act contracts shall have a term of 10 years and one year shall be added to this term annually upon each anniversary date of the contract unless one or both parties have taken action to terminate the contract. The City Administrator shall be authorized to initiate contract termination on behalf of the City based on recommendations of the Department. The contract rights and obligations are binding upon all successive owners of the property during the life of the contract. The property retains the lower Mills Act tax rate when the property is sold. To end a contract, either party may submit a notice of nonrenewal to the other party. Such notices shall cause the contract to terminate at the end of the then-current 10-year contract period. Cancellation of a contract by the City due to noncompliance requires a public hearing and, if cancelled, results in the immediate termination of the contract and a penalty equal to 12.5 percent of the assessed market value of the property.

The contract will require that the historic elements of the property are maintained in good condition. This will include a plan for rehabilitation and maintenance and may include a program to restore deteriorated elements. All recipients of Mills Act contracts are required to implement a rehabilitation/restoration and maintenance plan prepared by a qualified professional and to submit an annual report to the Department specifying all work that has been done to maintain and preserve the historic resource over the year in compliance with the approved rehabilitation/restoration and maintenance plan. All rehabilitation/restoration and maintenance work shall be completed in conformance with the Secretary of Interior’s Standards for Rehabilitation. All Mills Act contracts shall specify that the rehabilitation/restoration and maintenance plan shall be updated at least every 10 years by a qualified professional and approved by both parties.

One of the duties and powers of the Historic Resources Board is to advise the City Council on proposed Mils Act contracts. On January 24, 2022, the Historic Resources Board adopted Resolution 2022-001- HRB (refer to Attachment 2), recommending that the City Council enter into a Mills Act Contract with Esperanza Carmel Commercial, LLC for the historic “Sundial Lodge” property.

The City Council considers the recommendation from the Historic Resources Board at a public hearing and resolves to approve, approve with conditions, or deny the proposed contract with sufficient time for action by the City Clerk so that recordation of approved contracts occurs before December 31st of the year in which the application is received.

To approve a Mills Act contract, both the Historic Resources Board and the City Council must make all of the following findings:
i. The building is designated a historic resource by the City and is listed on the Carmel Register.

Staff Response: The property was designated as a historical resource on May 25, 2005, and a Resolution was recorded with Monterey County on October 19, 2006. According to a September 15, 2003 staff report to the Historic Preservation Committee, the property was voluntarily placed on the local historic inventory by then-owner Auberge Carmel, LLC, represented by Mr. David Fink. The application meets this finding. ii. The proposed rehabilitation/restoration and maintenance plan is appropriate in scope and sufficiently detailed long-term rehabilitation/restoration and maintenance. Required maintenance and rehabilitation should be more significant than just routine maintenance that would be expected for any property.

Staff Response: The proposed plan includes rehabilitation and maintenance activities that will protect the integrity of the resource by replacing aging infrastructures such as plumbing and heating, ventilation, and air conditioning systems and repairing character-defining features such as the original wood windows. Ongoing maintenance activities include foundation inspections, roof maintenance, cleaning and inspecting all chimneys and flues, and termite testing. All exterior modifications are subject to Design Review approval and a determination of consistency with the Secretary’s Standards. Therefore, the application meets this finding.
iii. 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 (B) Do not significantly alter, damage or diminish any primary elevation or character-defining feature; and (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 (D) Do not result in any second-story addition to a single-story historic resource.

Staff Response: After purchasing the property in 2002, Mr. Fink applied to the City to remodel the hotel.

The renovation was reviewed by Ms. Sheila McElroy of Circa: History Property Development for consistency with the Secretary of the Interior’s Standards for the Treatment of Historic Properties. The renovation was consistent with the Secretary’s Standards by the Historic Preservation Committee and did not include any increase in floor area. The hotel’s primary elevation and character-defining features were preserved, and the Planning Commission approved the project. The application meets this finding. iv. The Mills Act contract will aid in offsetting the costs of rehabilitating and maintaining the historic resource.

Staff Response: Construction was completed on the hotel circa 1930 and renovated 20 years ago. A rehabilitation and maintenance plan prepared by Mr. Christopher Barlow, AIA, EDAC, LEED AP, NCARB, with input from historic preservation professional Mr. Kent Seavey, proposes the following rehabilitation work: replace existing plumbing throughout the building; replace the existing heating, ventilation, and air conditioning systems; repair and rehabilitate existing windows for thermal performance; and, repair and replacement of insulation. Proposed maintenance activities include foundation inspections and repairs; exterior paint; roof maintenance; cleaning, inspecting, and repairing chimneys and flues; and termite testing/treatment (refer to Attachment 1, Exhibit C). The total cost of rehabilitation and maintenance is estimated to be $850,000 over the next ten years. The savings in property taxes would aid in offsetting these costs. The application meets this finding.
v. Approval of the Mills Act contract will represent an equitable balance of public and private interests and will not result in a substantial adverse financial impact on the City.

Staff Response: Approval of the Mills Act Contract would be consistent with Goal 1-5 and Objective 1-16 of the Land Use & Community Character Element of the General Plan, which encourages providing incentives for property owners to preserve and rehabilitate historic resources. Although the adoption of a Mills Act Contract would decrease property tax revenue to the City, the financial impact would be minimal because:
1) The City Council adopted Resolution 2016-068 on September 13, 2016, limiting the number of Mills Act Contracts approved to fifteen (15) in three calendar years. On March 3, 2020, the Council reviewed the policy and determined that 15 contracts over 3 calendar years remained appropriate. During calendar years 2020-2022, a total of four (4) Mills Act contracts were approved. 2) Carmel currently has +283 historic resources. Since the adoption of the Mills Act program in 2004, the City has entered into a total of fourteen (14) Mills Act Contracts. 3) The City would continue to receive a portion of the property tax revenue. Additionally, the investment in rehabilitation and maintenance of the historic hotel would further support local tourism, which benefits both private and public interests.
4) The value of preserving the historic hotel offsets the loss of property tax revenue.

FISCAL IMPACT:

The City will have a diminished tax base from the property at Monte Verde 2 northeast of 7th Avenue for the contract term. The amount is unknown at this time.

PRIOR CITY COUNCIL ACTION:

On March 3, 2020, the City Council adopted standard contract language for Mills Act Contracts. The City Council history of reviewing this application is discussed in the Background/Summary section above.

ATTACHMENTS:

Attachment 1 - Standard Mills Act Contract 04.04.23
Attachment 2 - Resolution 2022-001-HRB
Attachment 3 - Guidelines for the Assessment of Enforceably Restricted Historical Property Attachment 4 - Photos of the exterior
OAK #4831-0417-0411 v2

RECORDING REQUESTED BY

CITY OF CARMEL-BY-THE-SEA

AND WHEN RECORDED MAIL TO

Carmel City Hall
Attn: Community Planning & Building
P.O. Box CC
Carmel-By-The-Sea, CA 93921 This space reserved for the Recorder’s use only

CITY OF CARMEL-BY-THE-SEA

MILLS ACT HISTORIC PROPERTY PRESERVATION CONTRACT
THIS AGREEMENT is made and entered by and between the CITY OF CARMEL-BY-THE-SEA a municipal corporation (hereinafter referred to as “City”), and ESPERANZA CARMEL COMMERCIAL, LLC (hereinafter referred to as “Owner”).

RECITALS
(i) California Government Code Section 50280, et seq. (known as the Mills Act) authorizes cities to enter into contracts with the owners of qualified historic properties to provide for their appropriate use, maintenance, and restoration such that these historic properties retain their historic characteristics;
(ii) The Owner possesses fee title in and to that certain real property, together with associated structures and improvements thereon, located at Monte Verde 2 northeast of 7th Avenue (APN: 010-191-005), Carmel-By-The-Sea, California, (hereinafter referred to as the “Historic Property”). A legal description of the Historic Property is attached hereto, marked as “Exhibit A” and is incorporated herein by reference; (iii) The property is identified as a historic resource on the City of Carmel-By-The-Sea’s Historic Inventory and Register of Historic Resources and is further described in the DPR 523A Form attached hereto, marked as “Exhibit B” and is incorporated herein by reference;
(iv) City and Owner, for their mutual benefit, now desire to enter into this Agreement both to protect and preserve the characteristics of historical significance of the Historic Property, as it exists at the date of this contract and as described in the City’s Register of Historic Resources and the National Register of Historic Places, and to qualify the Historic Property for an assessment of valuation pursuant to the provisions of Article 1.9 (commencing with Section 439) of Chapter 3 of Part 2 of Division 1 of the California Revenue and Taxation Code.

Attachment 1
OAK #4831-0417-0411 v2
NOW, THEREFORE, City and Owner, in consideration of the mutual covenants and conditions contained herein, do hereby agree as follows:

1. INCORPORATION OF RECITALS. All recitals are incorporated into this Agreement.

2. EFFECTIVE DATE AND TERM. This Agreement shall be effective and commence on the date the Agreement is signed by the City unless otherwise indicated by the County of Monterey and shall remain in effect for a minimum term of ten (10) years thereafter.

3. AUTOMATIC RENEWAL. Each year, upon the anniversary of the effective date of this Agreement (hereinafter referred to as “annual renewal date”), one (1) year shall be added automatically to the term of this Agreement, unless timely notice of nonrenewal is given as provided in paragraph 4 of this Agreement. The total length of the contract shall not exceed twenty (20) years.

4. NOTICE OF NONRENEWAL. If City or Owner desires in any year not to renew this Agreement, that party shall serve written notice of nonrenewal in advance of the annual renewal date of this Agreement as follows: Owner must serve written notice of nonrenewal at least ninety (90) days prior to the annual renewal date; City must serve written notice of the nonrenewal at least sixty (60) days prior to the annual renewal date.

If notice is not received, the Agreement shall automatically be renewed for another year.

Upon receipt by Owner of a notice of nonrenewal from the City, Owner may make a written protest. At any time prior to the annual renewal date, City may withdraw its notice of nonrenewal.

5. EFFECT OF NOTICE OF NON-RENEWAL. If either City or Owner serves timely notice of nonrenewal in any year, and this contract is not renewed, this Agreement shall remain in effect for the balance of the period remaining since the original execution or the last annual renewal date.

6. FEES. The City may require that the Owner(s) of the Historic Property pay a fee that shall not exceed the reasonable cost of providing services, such as inspections, pursuant to Government Code Section 50281.1 (Article 12 of Chapter 1 of Part 1 of Division 1 of Title 5 of the Government Code), for which the fee is charged.

7. VALUATION OF PROPERTY. During the term of this Agreement, Owner is entitled to seek an assessment of the valuation of the Historic Property pursuant to the provisions of Chapter 3 of Part 2 of Division 1 of the California Revenue and Taxation Code.

8. PRESERVATION OF PROPERTY. Owner shall preserve and maintain the characteristics of historical significance of the Historic Property and agrees to complete rehabilitation and/or maintenance activities as defined in the Rehabilitation/Restoration and Maintenance Plan attached as “Exhibit C”. Requests for revisions to the Maintenance and Attachment 1
OAK #4831-0417-0411 v2
Rehabilitation plan shall be reviewed by the Historic Resources Board prior to implementation. In addition, Owner shall comply with the terms of the City’s Historic Preservation Ordinance (CMC 17.32). Owners shall not be permitted to further impede any view corridor with any new structure, including but not limited to walls, fences, or shrubbery, so as to prevent the viewing of the Historic Property from the public right-ofway.

9. RESTORATION OF PROPERTY. Owner shall, where necessary, restore and rehabilitate the Historic Property to conform to the rules and regulations of the Office of Historic Preservation of the State Department of Parks and Recreation, U. S. Secretary of the Interior’s Standards for Rehabilitation, the State Historical Building Code, and the City of Carmel-by-the-Sea, all as amended.

10. INSPECTIONS. Owner shall allow periodic examinations, at least every five (5) years, with reasonable notice thereof, of the interior and exterior of the Historic Property by representatives of the County of Monterey Assessor and the City of Carmel-By-The-Sea as may be necessary to determine Owner’s compliance with the terms and provisions of this Agreement. The City will coordinate inspections by such other agencies that have jurisdiction and will keep them to the minimum necessary to determine such compliance.

11. PROVISION OF INFORMATION. Owner shall furnish City with any and all information required by City, in order to determine the eligibility of the Historic Property, and that City deems necessary or advisable to determine compliance with the terms and provisions of this Agreement.

12. ANNUAL REPORT. Owner shall submit an annual report at least 90 days prior to each annual renewal date (October 1st) to the Department of Planning and Building specifying all work that has been done to maintain and preserve the historic resource over the preceding year in compliance with the approved maintenance plan.

13. CANCELLATION. The City has the right to cancel the contract if the owner allows the property to deteriorate to the point that it no longer meets the standards for a qualified historical property. The City also has the right to cancel this contract if the owner(s) breaches the provisions of paragraphs # 8, 9, 10, or 12 of this Agreement after the City has provided reasonable notice of any failure to comply with the agreement and a public hearing. Notice of the hearing shall be mailed to the last known address of each owner of the property, with the notice conforming to the provisions of Government Code section 6061., If after notice and a hearing, the contract is canceled, termination of the Agreement is immediate, and the owner shall pay a cancellation fee equal to 12.5 percent of the current fair market value of the property, as determined by the Monterey County Assessor as though the property were free of the contractual restriction. The cancellation fee shall be paid to the Assessor, at the time and in the manner that the Assessor shall prescribe. City’s right to cancel this Agreement pursuant to this paragraph Attachment 1
OAK #4831-0417-0411 v2
shall in no way limit or restrict its rights or legal remedies arising from City’s Historic Preservation Ordinance and Municipal Code.

14. ENFORCEMENT OF AGREEMENT. In lieu of and/or in addition to any provisions to cancel this Agreement as referenced herein, City may specifically enforce, or enjoin the breach of, the terms of this Agreement.

15. WAIVER. City does not waive any claim or default by Owner if City does not enforce or cancel this Agreement. All remedies at law or in equity, which are not otherwise provided for this Agreement or in City’s regulations governing historic properties are available to City to pursue in the event there is a breach of this Agreement. No waiver by City of any breach or default under this Agreement shall be deemed to be a waiver of any other subsequent breach thereof or default hereunder.

16. BINDING EFFECT OF AGREEMENT. Owner hereby subjects the Historic Property to the covenants, reservations, and restrictions set forth in this Agreement. City and Owner hereby declare their specific intent that the covenants, reservations, and restrictions as set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Owner’s successors and assigns in title or interest to the Historic Property. A successor in interest shall have the same rights and obligations under this Agreement as the original owner who executed the Agreement.

Each and every contract, deed, or other instrument hereinafter executed, governing or conveying the Historic Property, or any portion thereof shall conclusively be held to have been executed, delivered, and accepted subject to the covenants, reservations, and restrictions expressed in this Agreement regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument.

City and Owner hereby declare their understanding and intent that the burden of the covenants, reservations, and restrictions set forth herein touch and concern the land in that it restricts development of the Historic Property. City and Owner hereby further declare their understanding and intent that the benefit of such covenants, reservations and restrictions touch and concern the land by enhancing and maintaining the cultural and historic characteristics and significance of the Historic Property for the benefit of the public and Owner.

17. NOTICE. Any notice required to be given by the terms of this Agreement shall be provided at the address of the respective parties as specified below, by personal delivery or United States mail, postage prepaid, addressed as follows:

City: Carmel-By-The-Sea
Community Planning & Building Department
Attn: Community Planning & Building Director
P.O. Box CC
Carmel-By-The-Sea, CA 93921
Attachment 1
OAK #4831-0417-0411 v2
Owner: Esperanza Carmel Commercial, LLC
PO Box 134
Carmel, CA 93921
Notice to successors in interest to either party shall be sent to the appropriate address.

In the case of future Owner(s) of the Historic Property, notice shall be sent to the address on file with the county property tax office in power at the time.

18. RECORDATION. No later than twenty (20) days after the parties execute and enter into this Agreement, the City shall cause this Agreement to be recorded in the Office of the County Recorder of the County of Monterey. From and after the time of the recordation, this Agreement shall impart a notice thereof to all persons as is afforded under state law.

19. STATE LAW. The Owner or agent of Owner shall provide written notice of this Agreement to the State Office of Historic Preservation within six (6) months of the date of this Agreement.

20. GOVERNING LAW; VENUE. This Agreement shall be constructed and governed in accordance with the laws of the State of California. Should either party to this agreement bring legal action against the other, the case shall be handled in Monterey County, California and the party prevailing in such action shall be entitled to a reasonable attorney fee which shall be fixed by the judge hearing the case and such fee shall be included in the judgment together with all costs.

21. AMENDMENTS. This agreement may be amended in whole or in part, only by a writtenrecorded instrument executed by the parties hereto.

22. DESTRUCTION OF PROPERTY; EMINENT DOMAIN; CANCELLATION. If the Historic Property is destroyed by an earthquake, fire, flood, or another natural disaster such that in the opinion of the City Building Official more than sixty percent (60%) of the original fabric of the structure must be replaced, this Agreement shall be canceled because the historic value of the structure will have been destroyed. If the Historic Property is acquired in whole or in part by eminent domain or other acquisition by any entity authorized to exercise the power of eminent domain, and the acquisition is determined by the City Council to frustrate the purpose of this Agreement, this Agreement shall be canceled. No cancellation fee pursuant to Government Code Section 50286 shall be imposed if the Agreement is canceled pursuant to this paragraph. Such Agreement shall be null and void for all purposes of determining the value of the property so acquired.

23. INDEMNIFICATION. Owner shall defend, indemnify, and hold harmless City and its elected officials, officers, agents, and employees from any actual or alleged claims, demands, causes of action, liability, loss, damage, or injury to property or persons, including wrongful death, whether imposed by a court of law or by administrative action of any Attachment 1
OAK #4831-0417-0411 v2
federal, state or local government agency, arising out of or incident to the direct or indirect use, operation, or maintenance of the Historic Property by Owner or any contractor, subcontractor, employee, agent, lessee, licensee, invitee, or any other person; (ii) Owner’s activities in connection with the Historic Property; and (iii) any restriction on the use of development of the Historic Property, from application or enforcement of the City’s Municipal Code, or from the enforcement of this Agreement.

This indemnification includes, without limitation, the payment of all penalties, fines, judgments, awards, decrees, attorneys’ fees, and related costs or expenses, and the reimbursement of the City, its elected officials, employees, and/or agents for all legal expenses and costs incurred by each of them. Owner’s obligation to indemnify shall survive the termination, cancellation, or expiration of this Agreement and shall not be restricted to insurance proceeds, if any, received by City, its elected officials, employees, or agents.

24. SEVERABILITY. In the event that any of the provisions of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, or by subsequent preemptive legislation, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby.

IN WITNESS THEREOF, the City and Owners have executed this Agreement on the day and year this Agreement is signed by the City unless otherwise indicated by the County of Monterey.

CITY OF CARMEL-BY-THE-SEA:

By: _______________________ Date: __________________
Name: Richard L. Rerig (“Chip”)
Title: City Administrator

PROPERTY OWNER(S):

By: __________________________ Date: ___________________ Name: Patrice Pastor
Esperanza Carmel Commercial, LLC
Title: Property Owner
Attachment 1
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EXHIBIT A

LEGAL DESCRIPTION

EXHIBIT B
DPR 523A FORM for ‘Sundial Lodge’

EXHIBIT C

REHABILITATION/RESTORATION AND MAINTENANCE PLAN
Attachment 1
Order Number: 2714-5947535
Page Number: 6
First American Title

Page 6 of 15 ends

LEGAL DESCRIPTION

Real property in the City of Carmel, County of Monterey, State of California, described as follows:

LOTS 18 AND 20 IN BLOCK 74, AS SAID LOTS AND BLOCK ARE SHOWN ON THAT CERTAIN MAP ENTITLED, MAP OF "CARMEL-BY-THE-SEA, MONTEREY COUNTY, CALIFORNIA", FILED MARCH 7, 1902

IN THE OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF MONTEREY, STATE OF CALIFORNIA, IN VOLUME 1 OF MAPS, "CITIES AND TOWN", AT PAGE 2.

APN: 010-191-005
Attachment 1
Attachment 1
Attachment 1
Attachment 1
Attachment 1
Property Address: Monte Verde St. at Seventh Ave.

Owner Name: L'Auberge Carmel / David Fink
Owner Telephone No.: (831) 917-2322
Plan Prepared by: Christopher Barlow AIA, EDAC, LEED AP, NCARB Maintenance/ Completed/ Year of Building Description Cost Rehabilitation Proposed Completion Feature of Work
Maintenance Proposed 2029 Foundation
Rehabilitation Proposed 2022 Plumbing
Rehabilitation Proposed 2024 Mechanical
Maintenance Proposed 2027 Exterior walls
Maintenance Proposed 2022-2032 Exteriors
Rehabilitation Proposed 2022 Windows
Rehabilitation Proposed 2023 Windows
Rehabilitation Proposed 2028 Roof, Ext. walls
Maintenance Proposed 2030 Wood, thruout
Rehabilitation Proposed 2025 Hardscape
Rehabilitation Proposed 2026 Hardscape
$45,000
New drainage at courtyard (currently surface drainage only, see photo 16) Replace existing aged interior plumbing piping throughout building

BUILDING SYSTEMS UPGRADES
Maintain Roof, Clean Chimneys/Flues, Inspect and seal plaster (annually) $150,000 Exterior and Interior Features Upgrades Subtotal
$75,000
Note: Frequency of Repairs continues beyond 2032 based on interval proposal.

Note: Dollar amounts will be review at 10 year intervals and adjusted for inflation. $850,000
$850,000
$80,000
$0
Proposed Work Total

REHABILITATION AND MAINTENANCE TOTAL
Exterior and Interior Features Upgrades Subtotal
Completed Work Total
Retaining Wall repair at existing stairs and property line (see photo 15) $35,000 Conduct exterior window condition assessment and provide survey of repairs $10,000 $115,000
$75,000
$470,000
$45,000

HARDSCAPE AND LANDSCAPE
Repair and replace existing Heating, Ventilation and Air Condition system(s) Insulation repairs and replacement
Termite testing and repairs

EXTERIOR AND INTERIOR FEATURES, MATERIALS, AND FINISHES Repair and Rehabilitate existing Windows for increased thermal performance Paint exterior of all exterior walls (every six years)
Mills Act Rehabilitation and Maintenance Plan
City of Carmel
$95,000
$175,000
$30,000
Building Systems Upgrades Subtotal $270,000
Mills Act Rehabilitation and Maintenance Plan
L'Auberge Carmel, Monte Verde Street and Seventh Ave, Carmel-By-The-Sea, California

STRUCTURAL UPGRADES
Foundation Inspection and localized repairs (as needed) Structural Upgrades Subtotal
$30,000
Attachment 1

CITY OF CARMEL-BY-THE-SEA

HISTORIC RESOURCES BOARD

HISTORIC RESOURCES BOARD RESOLUTION NO. 2022-001-HRB

A RESOLUTION OF THE HISTORIC RESOURCES BOARD OF THE CITY OF CARMEL-BY-THE-SEA

RECOMMENDING THAT THE CITY COUNCIL ENTER INTO A MILLS ACT CONTRACT WITH ESPERANZA CARMEL COMMERCIAL, LLC FOR THE PROPERTY LOCATED ON MONTE VERDE 2 NORTHEAST OF 7TH AVENUE ALSO KNOWN AS L’AUBERGE CARMEL
APN 010-191-005

WHEREAS, David Fink (“Applicant”) submitted an application on behalf of Esperanza Carmel Commercial, LLC requesting to enter into a Mills Act contract (MA 21-238, L’Auberge Carmel) described herein as (“Application”); and
WHEREAS, the Application has been submitted for the property located on Monte Verde 2 northeast of 7th Avenue Residential and Limited Commercial (R-C) District (Block 74, Lots 18 & 20); and
WHEREAS, the Applicant is requesting to enter into a Mills Act contract with the City and in accordance with Carmel Municipal Code (CMC) Section 17.32.100.B.6 (Review Process), the HRB shall consider the application and make recommendations to the City Council to approve, approve with conditions, or deny the application; and
WHEREAS, the agenda for the Historic Resources Board Meeting was posted in three locations on January 21, 2022 in compliance with State law indicating the date and time of the public hearing; and
WHEREAS, on January 24, 2022, the Historic Resources Board held a public meeting to consider the application for a Mills Act contract, including without limitation, information provided to the Historic Resources Board by City staff and through public testimony; and WHEREAS, this Resolution and its findings are made based upon evidence presented to the Board at the January 24, 2022 meeting including, without limitation, the staff report and attachments submitted by the Community Planning and Building Department; and WHEREAS, the Historic Resources Board did hear and consider all said reports, attachments, recommendations and testimony herein above set forth and used their independent judgement to evaluate the project; and
WHEREAS, the facts set forth in the recitals are true and correct and are incorporated herein by reference.

Attachment 2
Resolution No. 2022-001-HRB

Page 2 of 3 ends

NOW, THEREFORE, BE IT RESOLVED, that the Historic Resources Board of the City of CarmelBy-The-Sea does hereby make the following findings and determinations regarding the Mills Act Contract:

FINDINGS REQUIRED FOR A MILLS ACT CONTRACT
For each of the required findings listed below, staff has indicated whether the application supports adoption of the findings. For all findings checked "no" the staff report discusses the issues to facilitate the Historic Resources Board decision-making. Findings checked "yes" may or may not be discussed in the report depending on the issues.

CMC 17.32.100.B.6.c YES NO
i. The building is designated as an historic resource by the City and is listed on the Carmel Register.
✔
ii. The proposed rehabilitation/restoration and maintenance plan is appropriate in scope and sufficient in detail to guide long-term rehabilitation/restoration and maintenance. Required maintenance and rehabilitation should be more significant than just routine maintenance that would be expected for any property. ✔
iii. 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 (B) Do not significantly alter, damage or diminish any primary elevation or character-defining feature; and
(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
(D) Do not result in any second-story addition to a single-story historic resource.
✔
iv. The Mills Act contract will aid in offsetting the costs of rehabilitating and maintaining the historic resource..
✔
v. 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.
✔

BE IT FURTHER RESOLVED that the Historic Resources Board of the City of Carmel-by-theSea does hereby recommend that the City Council approve a Mills Act Contract (MA 21-238, L’Auberge Carmel) for the property located on Monte Verde 2 northeast of 7th Avenue (APN 010- 191-005).

PASSED, APPROVED AND ADOPTED BY THE HISTORIC RESOURCES BOARD OF THE CITY OF CARMEL-BY-THE-SEA this 24TH day of January, 2022, by the following vote:

Attachment 2
Resolution No. 2022-001-HRB

Page 3 of 3 ends

AYES: CHROMAN, DYAR, GUALTIERI, HALL, POMEROY
NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
_________________________ _________________________
Erik Dyar Margi Perotti
Chair Historic Resources Board Secretary

Attachment 2
June 2, 2005
BETTY T. YEE
Acting Member
First District, San Francisco

BILL LEONARD
econd District, Sacramento/Ontario

CLAUDE PARRISH
Third District, Long Beach

JOHN CHIANG
Fourth District, Los Angeles

STEVE WESTLY
State Controller, Sacramento
RAMON J. HIRSIG
Executive Director
No. 2005/035
O COUNTY ASSESSORS AND INTERESTED PARTIES:

NOTICE OF BOARD ACTION

GUIDELINES FOR THE ASSESSMENT OF

ENFORCEABLY RESTRICTED HISTORICALPROPERTY
On May 25, 2005, the Board of Equalization approved the following guidelines pertaining to the assessment of enforceably restricted historical property. These guidelines supersede Letter To Assessors No. 77/174 (dated December 19, 1977).

On June 8, 1976, the voters of California approved Proposition 7 which amended section 8 of article XIII of the California Constitution. This amendment requires that enforceably restricted historical property be valued on a basis that is consistent with its restrictions and uses. Sections 439 through 439.4 were added to the Revenue and Taxation Code to implement Proposition 7.

These statutes, in particular section 439.2, prohibit a valuation of enforceably restricted historical property based on sales data and instead require that such property be valued by a prescribed income capitalization method.

Staff drafted these guidelines in consultation with interested parties and, after discussions, no issues remained unresolved. The guidelines discuss the enforceably restricted historical property requirements, the income to be capitalized, the capitalization rate, the effect of Proposition 13 upon enforceably restricted historical properties that undergo change in ownership or new construction, and the valuation of property under notice of nonrenewal.

The guidelines are posted on the Board's website at www.boe.ca.gov/proptaxes/guideproc.htm.

We hope this information proves useful and promotes uniformity of assessment for these properties. If you have any questions, please contact our Real Property Technical Services Unit at 916-445-4982.

Sincerely,
/s/ David J. Gau
David J. Gau
Deputy Director
Property and Special Taxes Department
DJG:grs
Enclosure

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

PROPERTY AND SPECIAL TAXES DEPARTMENT
450 N STREET, SACRAMENTO, CALIFORNIA
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0064
916 445-4982  FAX 916 323-8765
www.boe.ca.gov
Attachment 3
1 GUIDELINES FOR THE ASSESSMENT OF

ENFORCEABLY RESTRICTED HISTORICAL PROPERTY

HISTORY
Effective March 7, 1973, Chapter 1442 of the Statutes of 1972 (also known as the Mills Act) added sections 50280 through 50289 to the Government Code to allow an owner of qualified historical property to enter into a preservation contract with local government. When property is placed under such a contract, the owner agrees to restore the property if necessary, maintain its historic character, and use it in a manner compatible with its historic characteristics.

Prior to the passage of Proposition 7 in 1976, these agreements (i.e., Mills Act contracts) constituted enforceable restrictions on the use of land within the meaning of Revenue and Taxation Code section 402.11 (Property Tax Rule 60, repealed January 10, 1978). However, Proposition 7 added the second paragraph to section 8 of article XIII of the California Constitution:

To promote the preservation of property of historical significance, the Legislature may define such property and shall provide that when it is enforceably restricted, in a manner specified by the Legislature, it shall be valued for property tax purposes only on a basis that is consistent with its restrictions and uses.

To implement Proposition 7, Chapter 1040 of the Statutes of 1977 (Senate Bill 380) added sections 439 through 439.4 to the Revenue and Taxation Code. These statutes, in particular section 439.2, prohibit a valuation of enforceably restricted historical property based on sales data and instead require that such property be valued by a prescribed income capitalization method.

ENFORCEABLY RESTRICTED HISTORICAL PROPERTY
Under section 439, historical property is "enforceably restricted" if it meets the definition of a "qualified historical property" as defined in Government Code section 50280.1 and is subject to a historical property contract executed pursuant to Government Code section 50280 and following.

A qualified historical property includes qualified historical improvements and the land on which the improvements are situated, as specified in the historical property contract. If the contract does not specify the land to be included, the qualified historical property includes only a land area of reasonable size to situate the improvements.

A qualified historical property is privately-owned property that is not exempt from property taxation and that also meets either of the following criteria:
• The property is listed in the National Register of Historic Places, or is located within a registered historic district; or
1 Unless otherwise noted, all statutory references are to the Revenue and Taxation Code.

Attachment 3
2 • The property is listed in any official state, county, city, or city and county official register of historical or architecturally significant sites, places or landmarks, including the California Register of Historical Resources, California Historical Landmarks, State Points of Historical Interest, local landmarks, and local survey listings of historical properties.

The historical property contract must have a minimum term of ten years, and, as applicable, must contain certain other elements, including the following:
• A provision relating to the preservation of the qualified historical property and, when necessary, the restoration and rehabilitation of the property in conformance with state historic preservation guidelines;
• A requirement for the periodic examination of the property to ensure compliance with the agreement;
• A requirement that the historical property agreement be binding upon successor owners of the qualified historical property; and
• A provision for an automatic one-year extension of the contract, with an additional year added to the initial contract term on each anniversary of the contract, unless either party provides notice of nonrenewal. If a notice of nonrenewal is given, the contract runs for its remaining term.

Once a contract is signed, accepted, and recorded, the property subject to the contract must be assessed under section 439.2 on the ensuing lien date. For example, if a contract were recorded in August 2004, the property should have been valued pursuant to section 439.2 for lien date January 1, 2005.

Local authorities may cancel a historical property agreement for breach of contract or failure to protect the historical property. Alternatively, the local entity may take legal action to enforce the contract.

ASSESSMENT
The assessment of an enforceably restricted historical property involves the following aspects:
(1) valuing the restricted historical property; (2) properly applying certain assessment provisions relating to article XIII A of the California Constitution (Prop 13); (3) valuing the restricted historical property following a notice of nonrenewal; and (4) valuing the restricted historical property following cancellation of the contract.

Valuing the Restricted Historical Property
Section 439.2 prohibits the assessor from using sales data relating to similar properties, whether or not enforceably restricted, to value an enforceably restricted historical property. Instead, the assessor must annually value a restricted historical property using an income approach that Attachment 3
3 follows the specific provisions of section 439.2. These provisions explicitly address (1) the determination of the income to be capitalized, (2) the development of the capitalization rate, (3) the capitalization technique to be used, and (4) the determination of the restricted historical property's taxable value on each lien date.

Income to be Capitalized
As provided in section 439.2(a), the income to be capitalized when valuing a restricted historical property is the property's fair rent less allowed expenditures, or allowed expenses. In general, section 439.2(a) follows Property Tax Rule 8(c), with fair rent in section 439.2 corresponding to gross return in Rule 8(c); allowed expenditures, or allowed expenses, in section 439.2 corresponding to gross outgo in Rule 8(c); and the income to be capitalized in section 439.2 corresponding to net return in Rule 8(c). In addition, for the purposes here, "gross income" is synonymous with fair rent, and "net operating income" is synonymous with the income to be capitalized.

The parties to a historical property agreement may stipulate a minimum annual income to be capitalized, in which case the income to be capitalized may not be less than the stipulated amount.

Fair rent, or gross income. The gross income of a restricted historical property is the fair rent for the property considering the restrictions on the property's use. When establishing the fair rent for a restricted historical property, the appraiser should consider the actual rent and typical rents in the area for similar properties in similar use, where the owner pays the property taxes.

The actual rent received by the owner of the subject restricted historical property is relevant to an estimate of fair market rent only if the actual rent is the same rent that would be expected if the existing lease were renegotiated in light of current market conditions, including the subject property's enforceable restrictions on use. With respect to rents from similar, or comparable, properties, if such rents are from properties outside the geographic or market area of the subject property, or from properties that are otherwise dissimilar to the subject property, the rents may not be relevant to an estimate of the subject property's fair rent.

Comparable rental data for single-family residences can be obtained from real estate brokers, rental agencies, and newspaper ads. Many assessors offices maintain rental data for commercial properties, and this data may be helpful when establishing the fair rent for restricted historical property when the contract allows a commercial use. Rental data for commercial property also can be obtained from commercial real estate brokers. For the purpose of estimating anticipated market fair rent and expenditures for use in calculating the subject property's value, rental and expense data for existing restricted historical properties, including the subject historical property, can be obtained through an annual questionnaire sent to property owners.

If sufficient rental data are not available, or such data are unreliable, the appraiser must impute a gross income for the subject restricted historical property. The imputed income should be based on what an informed investor would reasonably expect the property to yield under prudent management, given the provisions under which the property is enforceably restricted.

Attachment 3
4 Allowed expenditures. Section 439.2(a)(3) defines allowed expenditures, or allowed expenses, as expenses necessary for the maintenance of the property's income. Allowed expenses are the same as those permitted in Property Tax Rule 8(c).

Typical expenses include the cost of utilities, maintenance and repair, insurance and property management. Allowed expenses also may include amounts owing for special assessments and special taxes. Expenses related to debt service, general property taxes, and depreciation should not be deducted.

In general, to arrive at the net income to be capitalized, allowed expenses are subtracted from the estimated rental income. However, in order to properly process the income, the appraiser must be aware of the structure of the lease with regard to how expenses are shared between the landlord-owner and the tenant.

The proper perspective from which to view the processing of income and expenses is that of the landlord-owner. The objective is to estimate the net income to the landlord-owner—this is the amount that should be capitalized—and the correct question to ask is the following: What, if any, allowed expenses must the landlord-owner pay out of the rental income that he or she receives?
In a gross lease, almost all of the allowed expenses must be paid out of the gross rent and, therefore, must be subtracted from the gross rent to arrive at the net income to be capitalized. In a net lease, relatively few allowed expenses must be paid by the landlord-owner out of the net rent (because the tenant pays most expenses) and only these expenses should be subtracted from the net rent to arrive at the net income to be capitalized. Frequently, there is a hybrid arrangement—some expenses are paid by the landlord-owner and some by the tenant. How expenses are shared often depends upon the property type together with local conventions.

Income to be capitalized, or net operating income. The income to be capitalized, or net operating income, is simply the fair rent, or gross income, described above less the allowed expenditures described above.

Capitalization Rate
The method of developing the capitalization rate to be used when valuing restricted historical property is prescribed by statute; a capitalization rate derived from sales data or the band of investment is not permitted.

Section 439.2 prescribes two types of capitalization rates for restricted historical property: (1) a capitalization rate to be used when valuing restricted historical property that is an owneroccupied single-family residence and (2) a capitalization rate to be used when valuing all other restricted historical property. Both types of capitalization rates include components for interest (i.e., yield), risk, property taxes, and amortization of improvements; in fact, the two rates are identical except for the amount of the risk component. The capitalization rate contains the following components:

Attachment 3
5 • An interest component annually determined by the State Board of Equalization and based on the effective rate on conventional mortgages as determined by the Federal Housing Finance Board. The interest component is announced annually, in a Letter To Assessors, by October 1 of the preceding assessment year.
• A historical property risk component determined by property type. For owner-occupied single-family residences, the rate is 4 percent; for all other types of restricted historical property, the rate is 2 percent.
• An amortization component for improvements defined as a percentage equal to the reciprocal of the remaining life of the improvements (e.g., if the remaining economic life of the improvements were 20 years, the amortization component would be 5 percent). Since the amortization component applies only to improvements, not to land, which is a nondepreciating asset, it is necessary to adjust the amortization component described in the statute. We recommend the following method of adjustment:

1. Based upon market data, estimate the percentage of total property value attributable to improvements.

2. Multiply this percentage by the amortization component described in the statute (i.e., by the reciprocal of the remaining life of the improvements). For example, if the remaining life of the improvements was 20 years, yielding a reciprocal percentage of 5 percent, and if 70 percent of the total property value was attributable to the improvements, the adjusted amortization factor would be 3.5 percent (0.05 x 0.70 =

0.035).

3. Add the adjusted amortization component to the other capitalization rate components to arrive at the total capitalization rate.
• A property taxes component equal to the percentage of the estimated total tax rate applicable to the property for the assessment year multiplied by the assessment ratio. Typically, the property tax component includes the basic tax rate of 1 percent plus an additional ad valorem rate related to any bonded indebtedness pertaining to the tax rate area in which the property is located. Special district assessments and special taxes are not included in the property tax component. As noted above, they should be treated as allowed expenses.

Capitalization Technique
The capitalization technique to be used when valuing a restricted historical property is prescribed by statute and is formulaic. Section 439.2(e) provides that the restricted value shall be the income to be capitalized, or net operating income, developed as prescribed by statute, divided by one of the two types of capitalization rates prescribed by statute. In other words, the restricted value is the simple quotient of the prescribed income to be capitalized and the prescribed capitalization rate.

Attachment 3
6 Determination of Taxable Value on Each Lien Date
Section 439.2(d) provides that a historical property's restricted value may not be enrolled if it exceeds either (1) the value of the subject property as determined under section 110 (i.e., current market value) or (2) the value of the subject property as determined under section 110.1 (i.e., factored base year value). In other words, section 439.2 states that the taxable value of a restricted historical property on each lien date shall be the lowest of its restricted value, current market value, or factored base year value. The factored base year value for an enforceably restricted historical property is the value that was established for the 1975 lien date2 or as of the date of the most recent change in ownership, whichever is later, adjusted by the annual inflation factor.

Article XIII A (Prop 13) Considerations
This section discusses how three important elements relating to implementation of article XIII A—change in ownership, new construction, and supplemental assessment—relate to the assessment of restricted historical property. Also discussed is the case in which only a portion of a property is subject to the historical property agreement—that is, the case in which a single property unit contains both restricted and unrestricted portions.

Change in Ownership
When a property subject to a historical property contract undergoes a change in ownership, a new base year value should be established for the property as of the date of change in ownership, as provided in section 110.1. Typically, a restricted historical property's base year value will be greater than its restricted value determined under section 439.2 and hence will not be enrolled as the property's taxable value. However, the establishment of a new base year value enables the assessor to perform the three-way value comparison prescribed by section 439.2(d) and described above. The establishment of a base year value is also necessary in order to calculate the assessed values of historical property should the historical property agreement enter nonrenewal status.

New Construction
Section IV of National Register Bulletin #15 defines a "building" as follows:

A building, such as a house, barn, church, hotel, or similar construction, is created principally to shelter any form of human activity. "Building" may also be used to refer to a historically and functionally related unit, such as a courthouse and jail or a house and barn.

Section IV further specifies that "[b]uildings eligible for the National Register must include all of their basic structural elements. Parts of buildings, such as interiors, facades, or wings, are not eligible independent of the rest of the existing building. The whole building must be considered, 2 Sections 110.1(d) and 405.5 do not apply to historical properties under contract as of lien date 1975 because the constitutional amendment which placed the valuation of historical property under article XIII rather than article XIII A had not yet been passed and, thus, was not in effect for the 1975 lien date.

Attachment 3
7 and its significant features must be identified." Thus, eligibility for the National Register is determined by the extent to which the basic structural elements of an existing building are intact.

In general, a newly constructed building would not be eligible because it is not an existing building with basic structural elements.3
Also, a newly constructed building is not a historic resource, and, thus, is not a qualified historical property within the meaning of Government Code section 50280.1. For example, a newly constructed detached garage (assuming it is not a reconstruction of a historical garage) clearly would not be eligible because it has no significance in American history or architecture, nor does it meet any of the other requisite criteria.

Bulletin 15, however, does list one type of newly constructed property that may be eligible for inclusion under the Mills Act. A reconstructed historic building is eligible for the National Register if the reconstruction is "accurately executed in a suitable environment and presented in a dignified manner as part of a restoration master plan, and when no other building or structure with the same association has survived."
The historical property contract typically specifies the scope and type of any work to be performed on the historical improvements. Improvements existing as of the date of the contract would be subject to the provisions of section 439.2 unless specifically excluded by the contract.

Any new construction made to the historical structure after the issuing date of the contract would not be subject to the provisions of section 439.2 unless specifically included in the contract or an amendment to the contract. Any questions regarding new construction to enforceably restricted historical structures should be directed to the counsel of the legislative body of the city, county, or city and county that contracted with the property owner.

Assuming that the newly constructed property is subject to the historical property contract, a base year value should be established for the newly constructed portion and this value added to the factored base year value of the existing restricted property.

In some cases, an existing historical property may include a portion that is restricted (i.e., subject to a historical property contract) and a portion that is unrestricted. In this case, separate factored base year values should be maintained for the restricted and unrestricted portions and the base year value of any newly constructed property added to the appropriate portion. The assessment treatment of this type of property is discussed further below.

Supplemental Assessment
Although the assessor is required to establish a new base year value upon a change in ownership or completed new construction involving restricted historical property, such property is not subject to supplemental assessment. As provided in Revenue and Taxation Code section 75.14:

Supplemental assessment; limitation. A supplemental assessment pursuant to this chapter shall not be made for any property not subject to the assessment 3 National Register Bulletin 15, "How to Apply the National Register Criteria for Evaluation," U.S. Department of the Interior, National Park Service (www.cr.nps.gov/nr/publications/).

Attachment 3
8 limitations of Article XIII A of the California Constitution. All property subject to the assessment limitations of Article XIII A of the California Constitution shall be subject to the provisions of this chapter, except as otherwise provided in this article.

As discussed above, the assessment of enforceably restricted historical property is subject to the provisions of article XIII, section 8 of the California Constitution, not article XIII A. Thus, section 75.14 precludes the assessor from enrolling supplemental assessments for enforceably restricted historical property.

Historical property not yet under contract that undergoes a change in ownership or new construction is subject to supplemental assessment, even if the property owner later executes a historical property contract in the same fiscal year. Also, any new construction involving a historical property that does not come under the existing historical property contract (e.g., a detached garage added to a restricted historical property) would be subject to supplemental assessment.

When a Property Contains Both Restricted and Unrestricted Portions When only a portion of a property that would normally be considered a single appraisal unit is restricted by a historical property contract, the assessed value should be determined by making a comparison of three values, determined as follows. First, the portion under contract should be valued using the capitalization method prescribed by section 439.2. Added to this figure should be the lower of the unrestricted portion's fair market value or factored base year value. The resulting sum should be compared to both the fair market value and the factored base year value of the entire property (i.e., both restricted and unrestricted portions) and the lowest of the three figures should be enrolled.

Valuing Property Under Notice of Nonrenewal
As provided in Government Code section 50282, either the owner of a restricted historical property or the local government entity may serve notice that it does not intend to renew the historical property contract. If such notice is not given, another year is automatically added to the term of the initial contract, thus creating a "rolling" contract term that is always equal to the initial contract term.

Section 439.3 prescribes the valuation method for a restricted historical property in nonrenewal status; this valuation method applies until the end of the restricted period (i.e., until the existing contract expires). In essence, the method results in a restricted value that gradually approaches the historical property's factored base year value as the remaining term under the contract decreases. For a property in nonrenewal status, the assessor must annually value the property as follows:

1. Determine the full cash value (i.e., factored base year value) of the property in accordance with section 110.1. (Alternatively, if the property will not be subject to section 110.1 when the historical property agreement expires, determine its fair market value in accordance with Attachment 3
9 section 110, as if the property were free of the agreement's restrictions; or, if the property will be subject to another type of restricted value standard when the historical property agreement expires, determine the property's value as if it were subject to the new restrictions.)

2. Determine the restricted value of the property by the capitalization of income method provided in section 439.2.

3. Subtract the restricted value determined in Step 2 from the factored base year (or other) value determined in Step 1.

4. Using the amount for the interest rate component (section 439.2(b)(1)) announced by the Board, discount the amount obtained in Step 3 for the number of years remaining until the termination of the contract.

5. Determine the restricted value of the property in nonrenewal status by adding the value determined in Step 2 to the amount obtained in Step 4.

The historical property's restricted value in nonrenewal status—that is, the value determined above, in accordance with section 439.3—should be compared with the historical property's factor base year and current market values, and the lowest of these three values should be enrolled as the property's taxable value.

Cancellation of Contract
The government entity party to a historical property contract may cancel the contract, after notice and a public hearing, if it determines that either the owner has breached the agreement or the property has deteriorated to the extent that it no longer meets the standards of a historical property. If the contract is cancelled, the property owner must pay a cancellation fee equal to 12½ percent of the property's current fair market value as though free of the contractual restriction, such value to be determined by the county assessor. After a contract is cancelled, the lower of the property's factored base year value or current market value should be enrolled for the ensuing lien date.

SUMMARY
The key points contained in these guidelines can be summarized as follows:

1. An owner of qualified historical property may enter into a preservation contract with local government. When property is placed under such a contract, the owner agrees to restore the property if necessary, maintain its historic character, and use it in a manner compatible with its historic characteristics. Such property receives the special valuation treatment prescribed under Revenue and Taxation Code sections 439 through 439.4.

2. Enforceably restricted historical property is to be annually valued by the income capitalization method prescribed in section 439.2, which contains specific instructions with Attachment 3
10 regard to the income to be capitalized, the capitalization rate, and the capitalization technique to be used. The restricted value must be compared to the property's current market value and factored base year value, with the lowest of these three values enrolled as the property's taxable value.

3. When assessing restricted historical property, the appraiser should consider how three important elements of article XIII A—change in ownership, new construction, and supplemental assessment—relate to the assessment. The appraiser should consider how a property should be assessed when only a portion of it is subject to a historical property agreement.

4. Restricted historical property under a notice of nonrenewal should be valued in accordance with section 439.3.

5. The government entity party to a historical property contract may cancel the contract. The cancellation fee is 12½ percent of the property's current fair market value as though free of the contractual restriction, with such value to be determined by the local assessor.

Additional information about Mills Act contracts may be obtained from the state Office of Historic Preservation, either by telephone at 916-653-6624, or from their website (www.ohp.parks.ca.gov).
(Note: Please see the assessment examples following.)
Attachment 3
Historical Property Valuation Examples Page 1
EXAMPLE 1 (OWNER-OCCUPIED SINGLE-FAMILY RESIDENCE)
Subject Restricted Historical Property
Restored, 105-year-old, Victorian single-family residence. Excellent condition. Under Mills Act contract since 1985 and not in nonrenewal status. Owner-occupied.

Determination of Restricted Value (current lien date)
Gross income (Fair rent)
$1,500 per month x 12 months = $18,000
Less: Anticipated vacancy and collection loss
$18,000 x 5% - 900
Effective gross income $17,100
Less: Anticipated operating expenses
Grounds maintenance $600
Fire insurance 400
Management Fee 360
Water and garbage 240
Building maintenance + 500 - 2,100
Net Operating Income $15,000
Restricted Capitalization Rate
Rate Components:

Interest rate .080
Risk (owner-occupied SFR) .040
Property tax (ad valorem) .015
Amortization (50-year remaining life; improvements
constitute 70% of total property market value;

0.02 x 0.70 – 0.014) + .014 .149
Restricted Value
$15,000 ÷ .149 = $100,671
Taxable Value—Three-Way Value Comparison
Restricted value $100,671
Factored base year value (based on prior change in ownership) $357,000 Current market value (based on comparable sales) $450,000 The lowest of the three possible values is the restricted value. Thus, the net taxable value would be $93,671 ($100,671 restricted value less the homeowners' exemption of $7,000).

Note 1: If this property had been a non-owner-occupied SFR, the only difference in the determination of the restricted value would have been the use of a risk rate component of 2% rather than 4% in the capitalization rate.

Note 2: In this and the following examples, the gross income, or fair rent, is presented on a gross rent basis, that is, under the assumption that the landlord-owner pays all operating expenses out of the gross income.

Attachment 3
Historical Property Valuation Examples Page 2
EXAMPLE 2 (OFFICE USE)
Subject Restricted Historical Property
Multi-tenant, restored historical office building in a downtown commercial district. Under Mills Act contract since 1985 and not in nonrenewal status.

Determination of Restricted Value (current lien date)
Gross Income (Fair rent):

Offices 140,000 sf @ $1.75/sf = $245,000
x 12 months = $2,940,000
Less: Anticipated vacancy and collection loss
$2,940,000 x 5% - 147,000
Effective gross income $2,793,000
Less: Anticipated operating expenses
Management $290,000
Maintenance 95,000
Insurance 75,000
Utilities 360,000
Janitorial + 140,000 - 960,000
Net Operating Income $1,833,000
Restricted Capitalization Rate
Rate Components:

Interest component .08
Risk .02
Property tax (ad valorem) .011
Amortization (50-year remaining life; improvements
constitute 75% of total property market value

0.02 x 0.75 = 0.015) + .015 .126
Restricted Value
($1,833,000 ÷ .126) = $14,547,619
Taxable Value—Three-Way Value Comparison
Restricted value $14,547,619
Factored base year value (based on prior change in ownership) $18,191,077 Current market value (based on comparable sales) $21,000,000 The lowest of the three possible values is the restricted value. Thus, the taxable value would be $14,547,619
Attachment 3
Historical Property Valuation Examples Page 3
EXAMPLE 3 (MIXED USE—RESIDENTIAL AND OFFICE)
Subject Restricted Historical Property
Two-story, restored historical property in a downtown district. Upper level is residential unit occupied by owner. Lower level contains three office spaces subject to short-term rental agreements. The income stream for the upstairs unit must be calculated separately from the downstairs unit because the risk rate is different for the owner-occupied unit.

Determination of Restricted Value
Separate restricted values for the upper-level residence and the lower-level office space must be determined, because the risk components are different for restricted value is sum of these two values.

Upper-Level Unit
Gross income (Fair rent) based upon comparable rent data the two types of use. The total
$975 per month x 12 months = $11,700
Less: Anticipated vacancy and collection loss
$11,700 x 5% - 585
Effective gross income
Less: Anticipated operating expenses
Grounds maintenance $300
$11,115
Fire insurance 200
Management Fee 180
Water and garbage 120
Building maintenance + 250 - 1,050
Upper-Level Net Operating Income $10,065
Restricted Capitalization Rate (owner-occupied SFR)
Rate components:

Interest rate .080
Risk .040
Property tax .010
Amortization ( 50-year remaining life; improvements
constitute 70% of total property market value;

0.02 x 0.70 = 0.014) + .014 .144
Upper-level Restricted Value ($10,065 ÷ .144) = $69,895 Lower-Level Offices
Gross income (Fair rent)
1000 sf @ $1.60/sf = $1,600 x 12 months $19,200
Less: Anticipated vacancy and collection loss
$19,200 x 5% - 960
Effective gross income $18,240
Attachment 3
Historical Property Valuation Examples Page 4
Less: Anticipated operating expenses
Grounds maintenance $300
Fire insurance 200
Management Fee 180
Water and garbage 120
Building maintenance + 250 - 1,050
Lower-Level Net Operating Income $17,190
Restricted Capitalization Rate
Rate components:

Interest component .080
Risk .020
Property tax .010
Amortization (50-year remaining life; improvements
constitute 70% of total property market value;

0.02 x 0.70 = 0.014) + .014 .124
Lower Level Restricted Value ($17,190 ÷ .124) $138,629
Add: Upper Level Restricted Value + $69,895
Total Restricted Value $208,524
Taxable Value—Three-Way Value Comparison
Restricted Value $208,524
Factored base year value (based upon prior change in ownership) $364,140 Current market value (based upon comparable sales data) $400,000 The lowest of the three possible values is the restricted value. Thus, the net taxable value would be $201,524 ($208,524 less the homeowners' exemption of $7,000).

Attachment 3
Historical Property Valuation Examples Page 5
EXAMPLE 4 (MIXED VALUATION—PART RESTRICTED AND PARTUNRESTRICTED) Description of Subject Property (Comprises Both Restricted and UnrestrictedPortions) The subject property is a 10-acre parcel with a farmhouse and barn situated on 2 acres; the remaining 8 acres are farmland. The farmhouse and barn are used as an owner-occupied singlefamily residence; this portion of the property is restricted remaining 8 acres of farmland are unrestricted.

Value of Restricted Portion (current lien date)
Gross income (Fair rent) for farmhouse and barn
under a Mills Act contract. The
$2,000 per month x 12 months = $24,000
Less: Anticipated vacancy and collection loss
$24,000 x 5% - 1,200
Effective gross income $22,800
Less: Anticipated operating expenses
Grounds maintenance $600
Fire insurance 400
Management Fee 360
Water and garbage 240
Building maintenance + 500 - 2,100
Net Operating Income = $20,700
Restricted Capitalization Rate
Rate components:

Interest component .080
Risk (owner-occupied) .040
Property tax (ad valorem) .010
Amortization (50-year remaining life; improvements
constitute 70% of total property market value

0.02 x 0.70 = 0.014) + .014 .144
Restricted Value ($20,700 ÷ .144) = $143,750
Taxable Value—Three-Way Comparison
Total Property Restricted Value (sum of restricted value above and lower of FBYV or current market value of unrestricted portion)
Restricted Value (portion under contract) $143,750
FBYV (unrestricted portion) + $102,000
Restricted Value (total property) $245,750
Factored base year values (based upon a prior change in ownership of the entire property, allocated between restricted and unrestricted portions):

Farmhouse, barn, and 2 acres (restricted portion) $204,000 8 acres (unrestricted portion) + $102,000
Total FBYV (total property) $306,000
Attachment 3
Historical Property Valuation Examples Page 6
Current market values (based upon comparable sales data):

Farmhouse, barn, and 2 acres (restricted portion) $230,000 8 acres (unrestricted portion) + $120,000
Total Current Market Value (total property) $350,000
The lowest of the three values is the Restricted Value (total property), $245,750. Thus, the net taxable value would be $238,750 ($245,750 less $7,000 homeowners' exemption).

Attachment 3
Historical Property Valuation Examples Page 7
EXAMPLE 5 (PROPERTY IN NONRENEWALSTATUS)
Description of Subject Restricted Historical Property
The same property as in Example 2, except the property owner has served notice of nonrenewal.

The Mills Act contract covering the property was originally executed in September 1995, and the owner served notice of nonrenewal in June 2004. Value the property for the 2005 lien date, reflecting its nonrenewal status. Assume that the property's restricted, current market, and factored base year values from Example 2, provided below, also refer to January 1, 2005.

Restricted value $14,547,619
Current market value $21,000,000
Factored base year value $18,191,077
Restricted Value in Nonrenewal Status
Value as if unrestricted (factored base year value) $18,191,077 Restricted value - 14,547,619
Difference $ 3,643,458
Present worth of difference
PW1 @ 6.00 %, 9 years (interest component for lien date 2005) x .591898 Plus restricted value
= $ 2,156,555
+ $14,547,619
Restricted value in nonrenewal status—lien date January 1, 2005 $16,704,174 Taxable Value
Since the restricted value in nonrenewal status, $16,704,174, is less than either the property's current market value or its factored base year value, this is the taxable value.

Attachment 3
L’AUBERGE CARMEL
1 Monte Verde Street at Seventh Ave.

Photos by Jenna Tyndall from Wald, Ruhnke and Dost Architects (June 28, 2021) Photo #1, Main façade looking South along Monte Verde
Photo #2, Main façade looking North along Monte Verde
Attachment 4
Photo #3, North elevation looking from City Hall parking lot Photo #4, Partial South elevation looking from Seventh Avenue Attachment 4
Photo #5, radial plaster cracking at Southwest building corner Photo #6, holes in foundation, plaster and tile at Southwest corner Attachment 4
Photo #7, hairline cracking in plaster above double windows by main entry Photo #8, radial cracking in plaster above main entry doors.

Attachment 4
Photo #9, holes in foundation near Northwest building corner Photo #10, cracked step/foundation at Northwest building corner Attachment 4
Photo #11 window sill at North side of building
Photo #12, bent/damaged flashing at second level opening Attachment 4
Photo #10, weathered/oxidized roofing at central courtyard Photo #11, damaged rafter tails at roof as seen from courtyard Attachment 4
Photo #12, rotted supports at exterior planter box
Photo #13, damaged downspout (typical condition at perimeter) Attachment 4
Photo 14, Water damage at upper-level balcony
Attachment 4
Photo 15, Existing retaining wall
Attachment 4
Photo 16, temporary surfact drainage at courtyard
Attachment 4

Carmel-by-the-Sea City CouncilApril 4, 2023

Carmel-by-the-Sea City Council
April 4, 2023