CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
PLANNING DIVISION
(310) 458-8341
MILLS ACT CONTRACT APPLICATION INSTRUCTIONS
WHAT IS THE MILLS ACT?
The Mills Act is a California State law that enables cities to enter into contracts with property owners of qualified historic structures. Mills Act contracts can provide tax benefits for both owner-occupied and income producing properties. In the case of owner-occupied property, the income projection is based on comparable rents for similar property in the area or, if insufficient rental information is available, the income that it could reasonably be expected to produce. For income producing property, the income amount is based on rent actually received and on typical rents received for similar property in similar use.
The owner of any building that is either a designated local landmark or a contributing building in a designated historic district may file a Mills Act Contract Application. Once approved, a Mills Act contract requires the County Tax Assessor's office to determine the value of the historic property based upon its current income, rather than future development potential.
In exchange for this reduction in property taxes, the contract requires the property owner to undertake specific restoration tasks, if necessary, and to properly maintain the historic structure. The proposed restoration and maintenance items are included in a work plan that is submitted by the applicant and, if approved, becomes attached to the contract as an exhibit.
More details about the State enacting law are available at www.ohp.parks.ca.gov.
CONTRACT TERM
Mills Act contracts are for a ten-year term and are renewed automatically each year on the contract's anniversary. As a result, unless either the property owner or the City submits a notice of non-renewal, the owner is always ten years away from the contract termination. The effect of a non-renewal notice is contract termination at the end of the then current ten-year term. The owner may also petition the City to initiate an immediate cancellation. If cancelled, a penalty equal to 12 1/2 percent of the property's assessed market value is imposed. The City may also cancel the contract in the case of breach of the contract conditions. The rights and obligations to the contract are also binding upon successive property owners during the contract term. Although new contracts can take place at any time, new valuations will not be effective until March of any given year.
APPLICATION PROCESS
The deadline for filing an application for a Mills Act Contract is May 31st annually.
Applications must be filed by appointment at the City Planning Division’s public information counter.
Appointments are available weekly on Tuesdays and Thursdays. Please contact the City Planning Division at (310) 458-8341 at least one week in advance to schedule an appointment to file your application.
Staff will review your Mills Act Contract application upon receipt and will contact you and/or your representative to schedule a site visit. Following a site visit, staff will prepare a report to present to the Landmarks Commission for their recommendation (tentatively scheduled for the August or September Landmarks Commission meeting). It is important for you and/or your representative (architect) to be present at this meeting to answer any questions the Commission may have regarding the property.
After the Landmarks Commission has made a recommendation on the Contract application, staff will then take it to the City Council for their review and approval. Once City Council approves the Contract, notarized signatures of both the property owner and City officials must be obtained no later than earlyDecember. The City will endeavor to submit the signed document to the Los Angeles County Recorder for recordation no later than December 28 for benefits to begin the following tax year.
Upon receipt of the fully executed and recorded document, the City will then forward it to the Los Angeles County Tax Assessor, who will recalculate the property owner's tax payment (usually mid April). Staff will provide you a copy of the fully executed Contract after it has been sent to the County Tax Assessor.
CHECKLIST
Please review the attached application form for more information about submittal requirements. If you have any other questions, please contact Steve Mizokami, Senior Planner, Landmarks Commission Liaison, at (310) 458-8341 or by email at [email protected].
Before submitting your application, please check that you have included the following items:
Completed application form.
Restoration/Rehabilitation and/or Maintenance Plan.
An Architectural Report identifying the status of all character-defining features of the building prepared by a certified architect.
Financial Analysis form with information required (two highlighted boxes only). Photographs of all building elevations and character-defining features of the structure(s). Copy of the Grant Deed for the property.
Copy of latest property tax bill.
City of Santa Monica
Planning and Community Development Department
City Planning Division
(310) 458-8341
MILLS ACT CONTRACT APPLICATION
Application Number (s)_____________________________ Date Filed:
Fee:
Receipt #
Received by:
PROJECT ADDRESS ___________________________________________________ Land Use Element District ________________ Zoning District __________________ Legal Description (Lot, Block, Tract) ____________________ Legal Description (Book, Page, Parcel #) __________________ APPLICANT:
CONTACT PERSON OTHER THAN APPLICANT (optional):
Name: _________________________________________
Address: _________________________________________
Phone: _________________ Fax: ___________________ e-mail: _____________________ ARCHITECT/DESIGNER:
PROPERTY OWNER (if other than applicant):
ATTORNEY (optional):
Name: _________________________________________
Address: _________________________________________
Phone: _________________ Fax: ___________________ e-mail: _____________________ Santa Monica Business License No. __________
Jason Vogel
160 Newport Center Drive, Suite 250, Newport Beach, CA 92660 310-770-801 N/A [email protected]
N/A
Sunset Beach District
1401 Palisades Beach Re. [now PCH] & 1401 Ocean Front Walk, Santa Moniica 90401 Lots 12 & 13, Block , Sunset Beach Tract
Book 4291, Page 31, APN 4291-031-008
Name: Michael _________________________________________ Meyer Address: 160 _________________________________________ Newport Center Dr. Ste 250,Newport Beaach, CA 92660 Phone: _________________ 949-338-6378 Fax: ___________________ N/A e-mail: _____________________ [email protected] Name: _________________________________________ Ocean Front Guest House LLC Address: _________________________________________ 160 Newport Center Dr. Ste 250, Newport Beach, C 92660 P_____________________ hone: _________________
949-338-6378 Fax: ___________________N/A e-mail: [email protected] Name: _____________ Michele McDonou_g___________________________ h Address:2424 5th Avenue,Los Angeles90018_________________________________________ Phone: _____________
323-731-8377 ____ Fax: ___________________ N/A e-mail: _____________________ [email protected]
Santa Monica Business License No. ____
Archi_te_____ ct C-25320
Existing Use of Property: ____________________________________ Date of Local Designation: __________________________________ Please give a brief summary of the general condition of the Landmark Structure:
Is rehabilitation or maintenance needed? (Select one)
_____ Rehabilitation _____Maintenance
Is the property designated as part of an historic district? Yes ____ No ____ If so, what district? ______________________________
Is the property listed on the National Register of Historic Places? Yes ____ No ____ If so, date of designation: _________________
APPLICATION MATERIALS
The following materials must be submitted to the Planning Division along with this application form in order to process a Mills Act Contract application:
An Architectural Report and a Restoration/Rehabilitation plan are required for the designated historic property. If the building is already restored and in good condition, a maintenance list must be submitted to support the need for tax relief.
Please submit one (1) unbound, single-sided copy of each of the following items:
1. An Architectural Report identifying the status and condition of all character-defining features of the building and site prepared by a certified architect.
2. A ten (10) year Restoration/Rehabilitation Plan with estimate cost and schedule prepared by a certified architect.
Please note that a Mills Act Contract only regulates exterior restoration/rehabilitation and general maintenance of your property. If you are also planning interior work, please include a description of this work in a separate section (please see attached sample plan).
3. A ten (10) year Maintenance Plan with estimate cost and schedule. Please describe all periodic/ongoing maintenance needs of the structure including plumbing, electrical, roofing and structural systems. This information must be submitted as a section of the Restoration/Rehabilitation Plan.
4. Photographs (35 mm or digital) of all building elevations and character defining features.
5. Information required for the Financial Analysis (fill in the two highlighted boxes on the attached form). Staff will use this form to calculate an estimate of the Mills Act tax assessment with the information provided. Please note that this forthcoming analysis is only an estimate. The Los Angeles County Office of the Assessor will make a revised tax assessment that will be applicable for the next tax year.
x
x
X
Auguat 14, 2006
Vacant.
Undergoing historic rehabiitation..
Proposed: Sunset Beach Tract District
1401 Palisades Beach Rd/1401 Ocean Front Walk Santa Monica, CA 90401
YEAR DESCRIPTION OF WORK ESTIMATE PAID TO COMPLETE NOTES 2023 Scrape and Repair Cedar Shingles $14,500 $14,500 $0 Historic Rehabilitation Repair termite foundation members $20,000 $20,000 $0 Historic Rehabilitation Exterior Wood Siding Repair $17,650 $17,650 $0 Historic Rehabilitation Repair brick masonry foundation $8,000 $8,000 $0 Historic Rehabilitation Remove Abandoned wire from façade $3,000 $3,000 $0 Historic Rehabilitation Remove Abandoned wire from foundation $1,500 $1,500 $0 Historic Rehabilitation Remove Abandoned plumbing components $4,700 $4,700 $0 Historic Rehabilitation Remove abandoned chimneys $12,000 $12,000 $0 Historic Rehabilitation Project site supervision $25,000 $19,800 $5,200 Historic Rehabilitation Construction Administration $19,943 $9,943 $10,000 Admin Incidental Labor and Material $10,000 $7,500 $2,500 General Conditions Site Maintenance $5,000 $1,155 $3,845 Historic Rehabilitation Blueprinting $750 $339 $411 General Conditions
Construction Photographs $1,500 $0 $1,500 General Conditions Telephone/Fax/Internet Service $1,200 $200 $1,000 General Conditions Temporary Water/Power Usage Fee $2,000 $500 $1,500 General Conditions Temporary Toilets $1,300 $1,300 $0 General Conditions
Security $40,000 $25,000 $15,000 General Conditions
Temporary Fences and Gates $5,000 $5,000 $0 General Conditions Construction Materials $24,768 $15,768 $9,000 Historic Rehabilitation Small Tools & Equipment $5,000 $3,000 $2,000 General Conditions Scaffolding $10,000 $8,000 $2,000 General Conditions
Final Clean-Up $15,000 $0 $15,000 General Conditions
Architectural Fees $40,000 $21,300 $18,700 Historic Rehabilitation Landscape Design $6,500 $3,500 $3,000 Historic Rehabilitation Permit Fees $25,000 $14,876 $10,124 Historic Rehabilitation Structural Engineer fee $2,400 $1,400 $1,000 Historic Rehabilitation Soils and structural site observation $3,000 $0 $3,000 Historic Rehabilitation Dumpster $40,000 $30,000 $10,000 Historic Rehabilitation Storm Sewer $4,500 $4,000 $500 Historic Rehabilitation
2024 Painting Exterior $25,000 $15,000 $10,000 Historic Rehabilitation Replace Damaged cedar Shingles $20,000 $2,500 $17,500 Historic Rehabilitation Improve Landscape Drainage $7,500 $0 $7,500 Historic Rehabilitation Replace window HVAC with MiniSplits $102,000 $80,000 $22,000 Historic Rehabilitation Grade & Remove sand away from foundation $12,000 $12,000 $0 Historic Rehabilitation Legal and Permitting $25,000 $12,000 $13,000 Historic Rehabilitation Replace PCH Entrance-Handicapped $25,000 $0 $25,000 Historic Rehabilitation Step Repair $15,000 $0 $15,000 Historic Rehabilitation
Repair Raised deck, fumigate $25,000 $17,000 $8,000 Historic Rehabilitation Firepit installation $5,000 $0 $5,000 Historic Rehabilitation Planters $15,000 $0 $15,000 Historic Rehabilitation
Historic Brick Deck repair $35,000 $0 $35,000 Historic Rehabilitation Historic fence Repair $25,000 $0 $25,000 Historic Rehabilitation Gutters & Downspouts $50,000 $0 $50,000 Historic Rehabilitation Landcaping $10,000 $0 $10,000 Historic Rehabilitation
Site Drainage $5,000 $0 $5,000 Historic Rehabilitation
Exterior furniture $12,000 $0 $12,000 Historic Rehabilitation Irrigation system $2,000.00 $0 $2,000 Historic Rehabilitation Gardening $10,000.00 $0 $10,000 Historic Rehabilitation Tree Removal $5,000 $5,000 Historic Rehabilitation
Stairs handrail $20,000 $0 $20,000 Historic Rehabilitation Stairs treads $10,000 $4,529 $5,471 Historic Rehabilitation Balcony Guardrails $18,000 $0 $18,000 Historic Rehabilitation Exterior kitchen $25,000 $0 $25,000 Historic Rehabilitation Roof Repair $8,500 $6,500 $2,000 Historic Rehabilitation 2025 Landscape Maintenance $3,000 $0 $3,000 Historic Maintenance Remove brick chimney. Replace with faux $5,000 $0 $5,000 Historic Rehabilitation 2026 Landscape Maintenance $3,150 $0 $3,150 Historic Rehabilitation New Roof $50,000 $50,000 Historic Maintenance
2027 Painting Exterior $28,750 $0 $28,750 Historic Maintenance Landscape Maintenance $3,308 $0 $3,308 Historic Maintenance 2028 Landscape Maintenance $3,473 $0 $3,473 Historic Maintenance 2029 Landscape Maintenance $3,647 $0 $3,647 Historic Maintenance 2030 Landscape Maintenance $3,829 $0 $0 Historic Maintenance Painting Exterior $33,063 $0 $33,063 Historic Maintenance Replace framing on Exterior Windows $20,000 $0 $20,000 Historic Rehabilitation 2031 Landscape Maintenance $4,020 $0 $4,020 Historic Maintenance 2032 Landscape Maintenance $4,221 $0 $3,647 Historic Maintenance 2033 Painting Exterior $38,022 $0 $38,022 Historic Maintenance Replace Non Original Windows PCH Bldg $21,000 $0 $21,000 Historic Rehabilitation 2034 Landscape & Irrigation Renovation $8,865 $0 $3,647 Historic Maintenance Historic Molding Repair & Painting $21,000 $0 $21,000 Historic Rehabilitation TOTAL $1,123,557 $408,461 $717,475
FINANCIAL ANALYSIS FOR MILLS ACT CONTRACT AT 1401 Palisades Beach Rd. Santa Monica, CA 90401
REVENUES
1) Montly Rental Income 3.0% $38,500.00
2) Annual Rental Income $462,000.00
ANNUAL EXPENSES
Gen Expenses: 30.0% $138,600.00
Vacancy 3.0% $13,860.00
8) Total Expenses $152,460.00
NET OPERATING INCOME $309,540.00
CAPITALIZATION RATE
9) Interest Component 5.5%
10) Historic Property Risk 2.0%
11) Property Tax Component 1.0%
12) Amortization Component 0.5%
13) Sum lines 9-12) Capitalization Rate 9.0%
TAXES
14) Mills Act Assessmemt
(NOI/Line 13) $3,439,333.33
15) Tax Under Mills Act
(Line 14 x 0.01035146 $35,602.12
16) Current Tax $74,970.00
17) Tax Savings
(Line 15-Line 15) $39,367.88
18) Annual Cost to City
Line 17*16% 16.0% $6,298.86