City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: NOVEMBER 15, 2022 FROM: COMMUNITY & ECONOMIC DEVELOPMENT WARDS: 1 AND 3
DEPARTMENT
SUBJECT: APPROVAL OF NINETEEN (19) MILLS ACT HISTORIC PROPERTY PRESERVATION AGREEMENTS FOR PROPERTY TAX REDUCTION AND CORRESPONDING PROPERTY IMPROVEMENTS FOR A MINIMUM TERM OF TEN YEARS WITH ANNUAL AUTOMATIC RENEWALS ISSUE:
Approve nineteen (19) Mills Act Historic Property Preservation Agreements for property tax reduction and corresponding property improvements for a minimum term of ten years with annual automatic renewals for the following: 1) Geoffrey and Christina Starns; 2) Jarod and Stephanie DeAnda; 3) Michael and Beth Castro, Trustees of the Castro Family Living Trust, 4) Kendra Tracy and Jon Roper; 5) Brad Curry and Cory Lynne Curry; 6) Kristel Espinosa and Noel Espinosa; 7) Red Bamboo, LLC; 8) Ginko Lueder and Yoneko Lueder; 9) Jennifer Ankele; 10) Troy Kurz and Lauren Kurz; 11) Teodor Dumitrescu and Pauline Marquez-Dumitrescu; 12) Elizabeth Przybylski and Erin Edwards; 13) Riverside Packing House, LLC; 14) Brieanna Dolmage; 15) Sharon Bourne-Tennell; 16) Cody Norris and Erin Richardson; 17) Sallie Griffin and Nicholas Jacobs; 18) Michael Carey; 19) Erica Melendrez and Aurelio Melendrez.
RECOMMENDATIONS:
That the City Council approve nineteen (19) Mills Act Historic Property Preservation Agreements for property tax reduction and corresponding property improvements for a minimum term of ten years with annual automatic renewals for the following:
Geoffrey and Christina Starns (Attachment 1);
Jarod and Stephanie DeAnda (Attachment 2);
Michael and Beth Castro, Trustees of the Castro Family Living Trust (Attachment 3); Kendra Tracy and Jon Roper (Attachment 4);
Brad and Cory Lynne Curry (Attachment 5);
Kristel and Noel Espinosa (Attachment 6);
Red Bamboo, LLC (Attachment 7);
Ginko Lueder and Yoneko Lueder (Attachment 8);
Jennifer Ankele (Attachment 9);
Troy Kurz and Lauren Kurz (Attachment 10);
Teodor Dumitrescu and Pauline Marquez-Dumitrescu (Attachment 11); Elizabeth Przybylski and Erin Edwards (Attachment 12);
Riverside Packing House, LLC (Attachment 13);
Brieanna Dolmage (Attachment 14);
Sharon Bourne-Tennell (Attachment 15);
Cody Norris and Erin Richardson (Attachment 16);
Sallie Griffin and Nicholas Jacobs (Attachment 17);
Michael Carey (Attachment 18);
Erica Melendrez and Aurelio Melendrez (Attachment 19)
BACKGROUND:
Enacted by the State of California in 1976, the Mills Act grants local governments the ability to provide property tax abatements to the owners of qualified historical properties. To receive the property tax abatement, property owners must enter into an agreement that commits them to making capital improvements to rehabilitate, restore, preserve, or maintain their qualified historical property.
In 2004, City Council adopted Resolution No. 20825 (2004 Resolution - Attachment 20) to implement the Mills Act Program (Program) in Riverside. The Program encourages preservation of designated historic districts and individual properties throughout the City. This, in turn, preserves property values and ensures preservation of the City’s tangible links to the past for future generations. The 2004 Resolution limited the number of agreements in Riverside to seven per calendar year, to limit the fiscal impact of the Program. In 2007, a lottery was held as more than seven applications were received.
In December 2010, Resolution No. 22139 (2010 Resolution - Attachment 21) revised the Program to allow flexibility in the number of agreements that the City could enter into each year. The 2010 Resolution sets an average of seven agreements per year, from inception of the Program, but limits the agreements to no more than ten in any given year. While not required by the 2004 or 2010 Resolutions, staff requests information on the type of application (residential or commercial) for tracking purposes. The average seven agreements generally include five residential properties and two commercial properties. The 2004 and 2010 Resolutions do not put a limit on the specific number of residential or commercial agreements as long as the total number of Agreements does not exceed ten.
On June 7, 2022, the City Council approved a temporary change to the Program for 2022 only. Via minute order, the Program was amended to: 1) extend the application period through July 2022; and 2) allow a maximum of twenty applications be accepted. City Council also directed staff to amend the Program moving forward to: 1) extend the application period to allow applications to be accepted between January 1 and May 31 of each calendar year (five months); and 2) allow City Council to enter into up to fifteen agreements per calendar year, but if the number in any one year falls below fifteen, up to twenty may be awarded in any subsequent year to make up the deficiency, provided that the overall average does not exceed fifteen since implementation.
On September 20, 2022, the Cultural Heritage Board (CHB) reviewed proposed amendments to Title 20 (Cultural Resources) that would modify the application period as directed by City Council. The proposed amendments to the 2004 Resolution were also presented to the CHB for information only as they do not require CHB review and recommendation. The CHB voted unanimously (8 ayes and 0 noes) to recommend that the City Council approve Planning Case PR-2022-0014422 to amend Chapter 20.30 of the Riverside Municipal Code (Attachments 4 and 5). As a matter of information, City Council considered the proposed amendments to the 2004 Resolution and Title 20 Amendments on November 1, 2022.
DISCUSSION:
For 2022, 19 Mills Act applications were received, deemed complete, and met the City’s requirements. The applications include 17 residential properties and two commercial properties. The 19 applications include ten-year plans that total approximately $2,458,805 in property maintenance and improvements.
Since 2004, the City Council has approved 91 Mills Act Agreements (Agreements) for an average of 5.3 per year. The 19 Agreements submitted this year will bring the total number of Agreements to 110.
Owners of two properties chose not to renew the Agreements and both will phase out of the Program in 2022. In 2019, three properties were not compliant with the requirements of the Program and the City will phase them out, meaning their property taxes will increase to full taxation by 2028.
A summary of the proposed 2022 Mills Act properties and estimated tax impacts to the City are listed below:
No.
Case #
Applicant
Property Address
Ward
Estimated Annual Tax Savings
Estimated Annual City Tax Impact
1 DP-2022-00772
Geoffrey and Christina Starns
3611 Mt. Rubidoux Dr.
1 $7,148.31
$857.80
2 DP-2022-00840
Jarod and Stephanie DeAnda
5050 Myrtle Av.
3 $2,922.01
$350.64
3 DP-2022-00879
Michael and Beth Castro, Trustees of the Castro Family Living Trust 4496 5th St.
1 $5,652.00
$678.24
4 DP-2022-00924
Kendra Tracy and Jon Roper
3092 Lime St.
1 $4,282.58
$513.91
5 DP-2022-00927
Brad and Cory Lynne Curry
4450 Third St.
1 $6,738.67
$808.64
6 DP-2022-00954
Kristel and Noel Espinosa
4415 Mission Inn Av.
1 $4,383.03
$525.96
7 DP-2022-00982
Red Bamboo, LLC
7179 Magnolia Av.
3 $3,771.00
$452.52
8 DP-2022-00991
Ginko Lueder and Yoneko Lueder
6550 Palm Av.
3 $3,155.56
$378.67
9 DP-2022-00999
Jennifer Ankele
4190 Highland Pl.
1 $1,980.07
$237.61
10 DP-2022-01020
Troy Kurz and Lauren Kurz
4475 Houghton Av.
1 $3,534.00
$424.08
11 DP-2022-01038
Teodor Dumitrescu and Pauline Marquez-Dumitrescu
3141 Lime St.
1 $871.57
$104.59
12 DP-2022-01055
Elizabeth Przybylski and Erin Edwards
3227 Orange St.
1 $7,359.20
$883.10
13 DP-2022-01095
Riverside Packing House, LLC
3280 Vine St.
1 $8,790.62
$1,054.87
14 DP-2022-01096
Brieanna Dolmage
4373 Rosewood Pl.
1 $2,723.49
$326.82
15 DP-2022-01157
Sharon Bourne-Tennell
3208 Mulberry St.
1 $1,539.32
$184.72
16 DP-2022-01192
Cody Norris and Erin Richardson
4425 11th St.
1 $1,869.41
$224.33
17 DP-2022-01269
Sallie Griffin and Nicholas Jacobs
6744 Oleander Ct.
3 $8,478.38
$1,017.41
18 DP-2022-01287
Michael Carey
4480 Mission Inn Av.
1 $2,920.55
$350.47
19 DP-2022-1293
Erica Melendrez and Aurelio Melendrez
4347 Mission Inn Av.
1 $3,756.00
$450.72
Total Estimated Annual City Tax Impact
$9,825.09
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority 1 – Arts, Culture and Recreation (Goal 2.3 – Strengthen Riverside’s portfolio of arts, culture, recreation, senior, and lifelong learning programs and amenities through expanded community partnerships, shared use opportunities, and fund development) and Strategic Priority 2 – Community Well Being (Goal 2.3 – Strengthen neighborhood identities and improve community health and the physical environment through amenities and programs that foster an increased sense of community and enhanced feelings of pride and belonging citywide).
The item aligns with the following Cross-Cutting Threads:
Community Trust – The Mills Act Program aligns with the Community Trust Cross-Cutting Thread as the annual contracts are reviewed at a public meeting by the City Council, allowing for public comment.
Equity – The Mills Act Program aligns with the Equity Cross-Cutting Thread as it is available to all historically designated properties throughout the City.
Fiscal Responsibility – The Mills Act Program aligns with the Fiscal Responsibility Cross-Cutting Thread as it provides an opportunity for property owners to reinvest back into the community through rehabilitation of the historic property.
Innovation – The Mills Act Program aligns with the Innovation Cross-Cutting Thread as it responds to the high financial demands of historic property maintenance and helps the property owners through reduced property taxes.
Sustainability & Resiliency – The Mills Act Program aligns with the Sustainability & Resiliency Cross-Cutting Thread as it assists with the rehabilitation and maintenance of historic properties so that they can continue to contribute to the character of the City for generations to come.
FISCAL IMPACT:
The estimated fiscal impact on the new property tax reductions is approximately $9,825 for Fiscal Year (FY) 2023/24. The Mills Act Program results in reduced property tax revenue to the City. Because staff administer and maintain the Program, the City does not incur any direct costs for administration of the Program. To offset staff costs, all applicants pay a $404 application fee and a $3,274 contract maintenance fee as established by City Council.
The City receives approximately 12% of the property tax collected annually by the County. For FY2022/23, the estimated reduction in the City’s property tax revenue from the current 91 properties that are part of the Program is approximately $40,634, for an average of $447 per property. Adding the 19 properties would bring the total Mills Act reduction in property taxes to approximately $50,459 per year starting in FY 2023/24. This is an estimate only as the reduction is dependent on tax rates and the number of properties in the Program.
Prepared by: Chris Christopoulos, Interim Community & Economic Development Director Certified as to
availability of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer
Approved by: Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
Mills Act Agreement with Geoffrey and Christina Starns
Mills Act Agreement with Jarod and Stephanie DeAnda
Mills Act Agreement with Michael and Beth Castro, Trustees of the Castro Family Living Trust Mills Act Agreement with Kendra Tracy and Jon Roper
Mills Act Agreement with Brad Curry and Cory Lynne Curry Mills Act Agreement with Kristel Espinosa and Noel Espinosa Mills Act Agreement with Red Bamboo, LLC
Mills Act Agreement with Ginko Lueder and Yoneko Lueder Mills Act Agreement with Jennifer Ankele
Mills Act Agreement with Troy Kurz and Lauren Kurz
Mills Act Agreement with Teodor Dumitrescu and Pauline Marquez-Dumitrescu Mills Act Agreement with Elizabeth Przybylski and Erin Edwards Mills Act Agreement with Riverside Packing House, LLC
Mills Act Agreement with Brieanna Dolmage
Mills Act Agreement with Sharon Bourne-Tennell
Mills Act Agreement with Cody Norris and Erin Richardson Mills Act Agreement with Sallie Griffin and Nicholas Jacobs Mills Act Agreement with Michael Carey
Mills Act Agreement with Erica Melendrez and Aurelio Melendrez Resolution No. 20825
Resolution No. 22139
Mils Act Contracts – 2022 ● Page 2