The Anderson City Council gave first reading to an ordinance that would establish a special tax assessment to encourage rehabilitation of historic properties in the city.

The proposed ordinance would freeze a property's assessed value at its pre-rehabilitation level for a tiered period depending on the scale of investment: five years for investments under $2 million, 10 years for investments of $2 million to less than $5 million, and 15 years for investments of $5 million or more. Presenters said owner-occupied residential projects must spend at least 50% of the property's fair market value on rehabilitation to qualify; income-producing (commercial) properties must meet or exceed 100% of fair market value.

Mike Burns of Vergormen, who presented for the proposal, said the program is intended to simplify incentives for historic renovation projects and allow both owner-occupied and income-producing properties to take advantage of the special assessment. He described a certification process beginning with a city council resolution and preliminary certification by the Board of Architectural Review (BAR), followed by construction and a final BAR inspection and certification. "If it is in fact confirmed, then that frozen assessment continues to apply beyond that initial 2 year period to the end of either the 5 year, 10 year, or 15 total amount period," Burns said.

The BAR would inform applicants within 30 days whether preliminary certification is approved. If preliminary approval is granted, a two-year period would begin during which construction should commence. If approved projects diverge from approved plans, they must return to the BAR for review. If the BAR later determines work did not comply with the approved plan, the frozen assessment would be removed and any foregone taxes for the prior two years would be collected, presenters said.

Councilmember Steele asked whether a recent administrative law decision removed the previous expectation that both the municipality and the county must pass the assessment to affect all taxing districts. An unnamed assistant city manager said the court decision indicated the city's determination of assessed value applies to taxing districts, and that new information made staff comfortable advancing the ordinance now.

Councilmember Stewart asked about the qualifying threshold for income-producing properties; presenters confirmed qualifying work must meet or exceed 100% of fair market value (the speaker called a prior line a typo and clarified it "must meet or exceed"). Councilmember Cortinez and others expressed support for the program and asked staff to consider the certification time window and tier structure to keep the program attractive to developers while protecting the city's interests.

Councilmember May moved to approve the ordinance on first reading; Stewart made the first second and Dr. Thompson seconded. The motion passed unanimously on first reading.

Presenters noted that sale of a rehabilitated property does not end the special assessment: the frozen assessment carries to subsequent owners until the end of the applicable tiered period. Presenters also said that the special tax assessment does not preclude using other incentives, such as abandoned building credits, and incentives can be layered if developers choose to use them.

The ordinance will return for a subsequent reading before final adoption and may require additional steps for implementation, including detailed BAR procedures and guidance for staff processing of preliminary and final certifications.