RESOLUTION NO. 11720
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ORANGE APPROVING MILLS
ACT PROGRAM GUIDELINES
WHEREAS, the State of California established the Mills Act Program in 1972 as contained in Government Code Sections 50280 -50290 as a historic preservation incentive, granting participating cities and counties the authority to enter into contracts with owners of qualified historic properties for property tax relief as provided for in Article 1.9, Sections 439 through 439.4, of the California Revenue and Taxation Code; and
WHEREAS, the Mills Act Program implements the Cultural Resources and Historic Preservation Element of the General Plan, which establishes the City’s goal to offer incentives that support historic preservation by providing a financial incentive to encourage the maintenance and rehabilitation of historic properties; and
WHEREAS, the Mills Act Program is identified as a Preservation Incentive offered by the City in Chapter 17.17 of the Orange Municipal Code to promote the preservation and continued use of Historical Resources by reducing the financial burden associated with property taxes in order to encourage owners to pursue maintenance and rehabilitation activities; and
WHEREAS, the Mills Act Program Guidelines are intended to provide the City with procedures for application, selection, and awarding of Mills Act Contracts and associated program administration; and
WHEREAS, the Planning Commission conducted a duly advertised public hearing on August 17, 2026, at which time interested persons had an opportunity to testify either in support of or in opposition to the proposed Mills Act Program Guidelines and recommends approval thereof.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange approve the subject Mills Act Program Guidelines, shown as Attachment 1, attached hereto, based on the following finding:
SECTION 1- FINDING
The Mills Act Program Guidelines are consistent with the goals and policies stated within the City’s General Plan Cultural Resources and Historic Preservation Element and General Plan Implementation Plan in that they establish a process through which property owners may participate in the Mills Act Program as identified in Chapter 17.17 of the Orange Municipal Code and receive a financial incentive in the form of property tax reduction that promotes the preservation, rehabilitation, and long‑term stewardship of historic resources, enabling the savings to be put toward maintenance activities.
2 SECTION 2-ENVIRONMENTAL REVIEW
The proposed Mills Act Program Guidelines are categorically exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15378 (Common Sense Exemption) because it serves to protect historic resources by providing a financial incentive for building rehabilitation and repair, thus protecting historic resources, thus avoiding a direct or reasonably foreseeable indirect physical change in the environment. For this reason, no further CEQA documentation is required.
ADOPTED this day of , 2026
Daniel R. Slater, Mayor, City of Orange
ATTEST:
Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:
Nathalie Adourian, City Attorney, City of Orange
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the day of , 202 6 by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
Pamela Coleman, City Clerk, City of Orange
CITY COUNCIL RESOLUTION NO. 11720
ATTACHMENT 1
MILLS ACT PROGRAM GUIDELINES
Adopted __________, 2026
The City of Orange Heritage Commission shall be responsible for reviewing Mills Act applications and recommending to the City Council those applications that best meet the criteria and priorities established in this Chapter. The Commission shall prepare and transmit a written report to the City Council summarizing its evaluation and recommendations. Each application shall be accompanied by the following items:
1. City of Orange Mills Act Application Form
2. Application fee established in the City’s Master Fee Schedule
3. Legal description of property
4. Mills Act Workplan identifying the preservation, rehabilitation, restoration, and/or maintenance tasks proposed for the property. The workplan shall include a description of each task, estimated costs for each work item, an anticipated timeline for completion, and overview of the recommended treatment plan to facilitate compliance with the Secretary’s Standards and applicable City design guidelines and standards.
5. Financial Analysis showing that the total estimated cost of the workplan is reasonably proportional to the projected property tax savings over the initial ten -year term of the contract.
6. Photographic overview of the property, documenting existing conditions, character - defining features, and those areas slated for inclusion on the Mills Act Workplan.
I. Steps and Schedule for Review of Applications
To ensure orderly processing, adequate staff review, and timely Council consideration, the Mills Act application cycle shall proceed according to the following phased process:
2 Step 1, Letter of Intent and Pre-Application Inspection (Ongoing) Prior to submitting the full Mills Act application, the property owner shall provide a brief Letter of Intent describing the property’s designation status, the owner’s interest in pursuing a Mills Act Contract, and a general outline of the proposed workpla n items and need for the Mills Act. On the basis of this Letter of Intent, the City shall complete a preliminary eligibility screening to confirm that the property meets the basic eligibility requirements of this subsection. Following submittal of the Letter of Intent, the City shall conduct an initial inspection as part of the eligibility screening. The applicant or authorized representative must be present for the inspection. Preliminary eligibility screening may occur on an ongoing basis prior to application submittal.
Step 2, Application Intake Period (January 1 – April 30) The City shall accept Mills Act applications annually between January 1 and April 30.
Applications submitted after April 30 shall be deferred to the next year’s cycle.
Step 3, Staff Review Period (May 1 – June 30)
Between May 1 and June 30, staff shall review applications for completeness and eligibility; conduct site inspections as needed; apply the adopted evaluation criteria; and prepare staff summaries and scoring sheets for Commission review.
Step 4, Commission Review and Recommendation (July 1 – August 31) Between July 1 and August 31, the Commission shall: Review eligible applications and staff evaluations; Apply the adopted scoring and ranking criteria; Hold one or more public meetings to consider applications; Forward a ranked list of recommended applicat ions to the City Council. The number of recommended applications shall not exceed the annual cap established by the City Council.
Step 5, City Council Consideration (September 1 – October 31) Between September 1 and October 31, the City Council shall: Consider the Commission’s recommendations; Approve, modify, or deny applications; Authorize execution of Mills Act contracts.
Step 6, Contract Execution and Recording (November 1 - December 31) All Mills Act contracts approved by the City Council must be executed and recorded no later than December 31 of the same calendar year. Following City Council approval, the property owner shall be responsible for executing, notarizing, and recording the Mills Act contract with the County Recorder. The City shall provide the owner with the final contract for signature within ten (10) business days of Council approval. The owner shall obtain all required signatures and notarizations and shall record the fully executed contract with the County Recorder no later than December 31 of the same calendar year. The owner shall provide the City with a copy of the recorded contract within ten (10) business days of recordation. Failure to record the contract by December 31 may result in deferral of the contract to the following year’s cycle.
3 II. Criteria for Evaluating Applications
In evaluating the merits of each application for a Mills Act Contract, the City shall apply the following criteria. These criteria are intended to prioritize applications that yield the highest preservation benefit, address the most urgent needs, and ensu re that tax savings are reinvested in the long-term protection of the Historical Resource.
A. Balance of Tax Savings and Investment
The estimated property tax benefit over the initial ten (10) years of the Contract should be reasonably balanced by the applicant’s proposed financial investment in the Historical Resource during the same period. Applications clearly demonstrating a commitment to reinvesting tax savings into substantial preservation work shall receive priority consideration.
B. Public Benefit
The proposed Mills Act Workplan should demonstrate a public benefit by addressing the preservation, rehabilitation, or exceptional maintenance needs of the property. Applications will be assessed and prioritized to the extent that they would:
(1) Rehabilitate, preserve, or restore character‑defining features, including features that have been altered or deteriorated over time; (2) Provide a comprehensive, prioritized scope of work that addresses the property as a whole rather than isolated improvements; (3) Include necessary structural reinforcement, seismic upgrades, or stabilization measures that protect the long‑term viability of the resource; (4) Include systems upgrades (electrical, plumbing, mechanical, life‑safety) necessary to ensure the viable continued use and preservation of the property; and (5) Address urgent preservation needs, including deterioration, deferred maintenance, or conditions that threaten the integrity of the resource.
C. Preservation Need
In determining the relative merit of applications, the City and Commission shall consider: (1) The extent of rehabilitation or restoration needed, with priority given to properties requiring significant work to preserve historic integrity; (2) The vulnerability of the resource, including structural deficiencies, seismic risks, or threatened character‑defining features; (3) The historic significance of the property; (4) Whether the proposed work will result in a substantial enhancement of a surrounding histo ric district or neighborhood; and (5) Whether the applicant proposes to use qualified preservation professionals to prepare or implement the Mills Act Workplan.
III. Limitations on Eligibility
The following limitations apply to all applications for Mills Act Contracts. These provisions are intended to ensure that tax benefits are directed toward meaningful preservation outcomes and that the program is administered equitably and efficiently:
4 A. Cap on Approvals
To ensure that the program remains fiscally sustainable and administratively manageable, the number of new Mills Act Contracts approved each year may be limited. Unless otherwise established by resolution of the City Council, no more than eight (8) new Con tracts shall be approved in any calendar year. The City Council may award fewer than the maximum number based on the relative merit of applications and available staff resources. The Director shall have the discretion to allow additional applications beyond the cap for properties requiring urgent and/or exceptional interventions to stabilize the property.
B. Limits on the Inclusion of Retroactive Workplan Items A Mills Act contract shall not apply to maintenance or alteration work that was completed or started prior to contract approval, unless the applicant demonstrates that: the completed work was necessary to address an immediate threat to public health or safety; or the work was required due to involuntary damage or destruction caused by fire, natural disaster, or other casualty; and the work was performed in a manner consistent with the Secretary’s Standards, on the basis of substantial evidence and the expert opinion of a qualified historic preservation professional as defined by this Chapter.
C. Routine Maintenance
Routine maintenance including, but not limited to, fence repair, trimming of trees or shrubs for purposes other than eliminating a threat to the historic structure, HVAC repair, and minor plumbing repairs shall not qualify as eligible work under a Mills Act Contract, except in cases where: (1) the property is a Historical Resource of exceptional or unique significance; and (2) the maintenance requirements are unusually extensive or financially burdensome du e to the property’s age, materials, or construction; and (3) the work is necessary to preserve character‑defining features and/or to prevent further deterioration.
D. Interior Work
Interior work may be included in a Mills Act Contract only when it meets either of the following conditions: (1) The work involves character‑defining interior features identified and documented in the property’s landmark designation or (2) Subsequent research and expert opinion has identified interior character -defining features wort hy of inclusion in the Mills Act Workplan; Interior remodeling unrelated to historic features, cosmetic upgrades, or alterations that diminish historic integrity shall not be eligible.
5 IV. Required Contract Provisions
Each Mills Act Historic Property Contract shall include the provisions required by California Government Code Sections 50281 and 50282, together with the following terms necessary to ensure compliance with state law and the preservation objectives of this Chapter.
A. Contract Terms
The contract shall have a minimum term of ten (10) years. On each anniversary date of the Contract, or on such other annual date as specified in the Contract, one (1) additional year shall automatically be added to the term unless a Notice of Non‑Renewal has been filed in accordance with state law and this Chapter. The contract rights and obligations are binding upon all successive owners of the property during the life of the contract.
B. Preservation Standards
The contract shall require that all preservation, restoration, rehabilitation, and maintenance work performed under the contract conform to the: (1) Secretary’s Standards; (2) State Historical Building Code; (3) Applicable guidance of the California Office of Historic Preservation; and (4) Applicable City of Orange Historic Preservation Design Standards and design guidelines.
C. Inspections
The property owner shall permit periodic examination of the premises by the City, as necessary, to verify compliance with the Mills Act Workplan and contract. Prior to approval of a new contract, the City shall conduct an inspection of the property.
The City shall conduct inspections at least once every five (5) years to determine continued compliance with the contract and the approved Mills Act Workplan. The property owner shall provide any information requested by the City to verify compliance. Inspection costs shall be borne by the property owner.
V. Reporting Requirements. The property owner shall submit reports to the City in accordance with the reporting schedule specified in the Mills Act Workplan and contract, on an annual basis, to demonstrate compliance with the Mills Act Workplan and progress toward completion of the preservation, rehabilitation, and maintenance tasks. The City may require more frequent reporting as necessary to ensure compliance.
VI. Notice to State Agencies . The City shall provide written notice of the Contract to the California Office of Historic Preservation within one hundred eighty (180) days of execution, as required by state law.