Council approves three Mills Act contracts amid public objections over tax impact

The South Pasadena City Council on Oct. 15 approved three Mills Act historic preservation contract items on the consent calendar after public comment raised objections about the revenue impacts and the scope of the contracts.

Members approved each Mills Act item by 4–1 roll call votes. Council member Ferguson recorded the lone dissent for all three votes; the other council members voted to approve. Staff confirmed that one of the properties in the package is listed on the California Register and another is listed on the National Register (staff identified which items correspond to those designations in the meeting packet). City staff said the contracts must comply with state Mills Act requirements and noted the city’s current monitoring program, which includes periodic check‑ins.

Public commenters strongly criticized the program’s fiscal effect, saying Mills Act contracts reduce property tax revenue for the South Pasadena Unified School District and other taxing agencies. One speaker said the particular properties under consideration appear to be recent purchases by high‑value investors and that the contracts included requests for items such as new HVAC systems, roofs and window replacement that the speaker said are “normal” building maintenance and should not be subsidized through tax breaks. Another commenter urged stricter enforcement and asked the city to ensure contracts are not automatically renewing without review.

Planning staff and the city attorney explained the state statutory framework: Mills Act contracts run for an initial 10‑year term and, under state law, automatically renew annually thereafter unless the council issues a timely notice of non‑renewal. Staff told the council they would implement a “tickler” monitoring system to identify approaching anniversaries and return to council with status updates for contracts approaching the ten‑year anniversary so the council could consider a notice of non‑renewal if appropriate.

Council members and staff discussed enforcement and monitoring. Staff reported, based on a July check, that Mills Act contracts fall into three groups: contracts outside their initial 10‑year term that have outstanding work (four properties), contracts in partial compliance within the initial term (16 properties), and contracts that have completed required work but remain active with rolling renewals (three properties). Staff said they are contacting property owners in the non‑compliant group and are preparing a follow‑up report for council consideration.

The council approved the consent calendar items with recorded roll calls rather than full separate hearings. Minutes and staff reports list eligible property designations; where the packet or the transcript did not specify a property address or dollar amounts for a particular item, staff confirmed that information is available in the project file and the council packet provided to members in advance.