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<br />6.1E <br />Page 5 <br /> <br />preserve the subject historic resource. Should they decide to cancel their agreement, <br />property owners must wait for a minimum of 10 years in order to be able to remove a <br />contract from a property's title. Moreover, "premature" contract cancellation requests are <br />met with very stiff tax penalties which are applied by the Tax Assessor's Office; staff is not <br />aware of any processing of contract cancellations ever having occurred in the State. <br /> <br />From the City's side, there is a yearly loss of property tax revenue with each contract; <br />however, this loss of revenue is considered relatively insignificant in light of the very limited <br />number of properties that are eligible for such contracts (approximately 100 properties out <br />of an estimated 10,000 parcels which have residential buildings which are over 50 years <br />old-a general State criterion for historic eligibility). In addition, cities only collect a fraction <br />of the yearly property tax revenues from residential parcels (approximately 12%). With <br />each contract, the City gains insurances that the contracted historic resources are well <br />maintained over the long term. By their nature, historic resources are older, relatively fragile <br />and more architecturally detailed and therefore more difficult to preserve than new <br />construction. By having well maintained properties in older neighborhoods, the community <br />benefit includes an upholding/ increase in property values as well as a long term <br />preservation role model. <br /> <br />From the property owner's side, there is extra funding available to maintain aging <br />properties in need of careful attention. Because it is transferable from one property owner <br />to the next, the property tax benefit is frequently used to promote the sale of a property <br />which is already in, or eligible for such contracts. In addition, owners benefit from special <br />technical support by the City, such as design recommendations from the HRAC who <br />monitor yearly all Mills Act Contracts. There are currently 11 such approved contracts in <br />place. (Mills Act Contracts - Scheduled work; Attachment 2:). <br /> <br />General Plan and Zoning Compliance <br />One of the primary goals of the Historic Resource Element of the General Plan is to insure <br />the long term preservation of the community's historic resources according to high <br />standards of quality; Mills Act Contracts are an essentially designed to meet that objective. <br />Historic resources are generally non-conforming with respect to zoning requirements <br />(setbacks, lot coverage, height, parking etc...) and Mills Act tend to insure that these non- <br />conformances are protected as character-defining features of the subject resources. <br /> <br />Environmental Review <br />The adoption of individual Mills Act Contracts is categorically exempt under Section 15331 <br />(Class 31) of the CEQA guidelines. <br /> <br />Public Notification <br />No public notification is required at this stage, other than to notify the applicable property <br />owners because the only action involved is to decide whether to approve long term <br />preservation agreements for the subject properties, which are already designated and <br />recognized historic resources. <br /> <br />Next Steps <br />As outlined in Section 40.7 of the Municipal Code, relating to the approval of Historic <br />Preservation Agreements (Mills Act Contracts), following a recommendation from the <br />HRAC, the Planning Commission shall make a recommendation to the City Council <br />