Administrative
Report
H.17., File # 25-0240 Meeting Date: 2/18/2025
To: MAYOR AND CITY COUNCIL
From: MARC WIENER, COMMUNITY DEVELOPMENT DIRECTOR
TITLE
APPROVE HISTORIC PROPERTY PRESERVATION AGREEMENTS FOR THE RESIDENTIAL STRUCTURES LOCATED AT 216 AND 218 NORTH CATALINA AVENUE WITHIN A DESIGNATED
HISTORIC DISTRICT FOR THE TERM OF TEN YEARS WITH AUTOMATIC RENEWAL EVERY
YEAR THEREAFTER
EXECUTIVE SUMMARY
The Mills Act is a state law that enables cities to enter into agreements with the owners of officially designated historical buildings. In exchange for assuring continued preservation, property owners qualify for a property tax reduction. Proposed are agreements for the rehabilitation of residential structures within a designated historic district located at 216 to 218 North Catalina Avenue. Each property was designated as a landmark by the Preservation Commission. As such, these properties qualify for consideration of a Historic Property Preservation Agreement (aka Mills Act Agreement).
BACKGROUND
Since October 1992, the City Council has supported the approval of Historic Property Preservation Agreements with owners of properties designated as Local Historic Landmarks. This program has become a major incentive for property owners to apply for Local Historic Landmark designation under the City's Preservation Ordinance, and the number of Redondo Beach property owners interested in the Mills Act program has increased each year as more have become aware of its availability and attractiveness. This item allows for consideration of Historic Preservation Agreements for properties located at 216 and 218 North Catalina Avenue.
The property at 216 N. Catalina Avenue includes a Craftsman two-story apartment building at the front of the site, and two detached one-story cottages located at the rear (east) of the site. The property at 218 N. Catalina Avenue includes a one-story Queen Anne style duplex at the front of the site and a two-story apartment building at the rear (east) of the site. The Preservation Commission designated the North Catalina Historic District on September 6, 1995. The properties were identified as including pre-1895 structures and part of the early development of the City. The properties are located within the original downtown corridor and were within walking distance of the original wharves. Please note that the two-story apartment building located at the rear of the 218 property was built around 1959 and is not historically designated. The staff report prepared for the November 13, 2024 Public Amenities Commission meeting includes additional information on the two properties and the proposed scope of work.
H.17., File # 25-0240 Meeting Date: 2/18/2025
Historic Property Preservation Agreement
The proposed Historic Property Preservation Agreement is identical to other agreements previously approved by the City Council. The following is a description of the most pertinent provisions of the Agreement.
The Mills Act requires that the initial term of the Agreement be ten years. On the anniversary date of the Agreement, it is automatically renewed for an additional year so that it has a continual ten-year time horizon. The City, or the owner, may call for the Agreement to not be renewed prior to the anniversary date. If this happens, the Agreement continues in effect until its current term expires, but the property will gradually be assessed more each year, incrementally raising the assessed value to match the market value until the Agreement expires.
The Agreement requires that the subject building be maintained and preserved in keeping with its historic character for the life of the Agreement. As a designated landmark, exterior alterations will be subject to review and approval by the Public Amenities Commission. The Mills Act requires the Agreement to "run with the property," and is binding upon subsequent property owners. The City may cancel the contract immediately (different from non-renewal) if it is found that the owner has failed to comply with the Agreement's terms, or if the structure has been allowed to deteriorate to the point where it is no longer a qualified historical structure. Cancellation carries with it a penalty equivalent to 12.5 percent of the property's full market value.
The primary benefit of the Agreement to the owners is the reassessment of the historical property by the County Assessor's Office based on a special formula within the Mills Act. The County Assessor, however, will not determine the actual reduction in assessed value until after the Agreement is recorded.
Since the City's historic preservation program is completely voluntary, it is dependent upon providing tangible incentives to property owners. The Mills Act is proving to be the primary incentive that is encouraging owners to list their homes as landmarks and fulfill the program's objective of preserving Redondo Beach's historic character and identity. Since older homes are often in need of more upkeep, the tax benefits of the Mills Act provide owners with additional resources toward this objective.
COORDINATION
The preparation of the Agreement has been coordinated with the City Attorney’s Office.
FISCAL IMPACT
Based on reassessments which have been made for other properties in Redondo Beach with Mills Act agreements, a typical residence would be reassessed at approximately 60% of its current market value. This would reduce the owners' annual property taxes by approximately 40%. The actual amount of the tax reduction is dependent upon the property's current assessed value. For example, if the property is currently valued at $1,000,000, the reduced property assessment would be in the range of $600,000.
The City currently receives 16.6 percent of the total property taxes collected on a given property.
Based on the above, the annual loss in property tax revenue to the City would be approximately $660 for a $1,000,000 property reassessed at $600,000. The total for the two properties would be
H.17., File # 25-0240 Meeting Date: 2/18/2025
approximately $1,200.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Applications for Certificate of Appropriateness
· Agmt - Mills Act for 216 North Catalina Ave.
· Agmt - Mills Act for 218 North Catalina Ave.
· Administrative Report - Public Amenities Commission, November 13, 2024