Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Mills Act topic
No spam. Unsubscribe anytime.
Supervisors question perpetuity of Mills Act tax breaks as three Mills Act contracts advance
Summary
Committee reviewed three Mills Act historic-property contracts (450 Pacific Ave, 1355 Waller St, 59 Potomac St), heard staff estimates of rehabilitation costs and tax savings, and debated whether Mills Act benefits should default to nonrenewal to limit perpetual tax reductions for private owners.
The committee heard a detailed presentation on three proposed Mills Act contracts, which create local 10-year rolling agreements that reduce property taxes for owners who pledge rehabilitation and maintenance of qualified historic properties.
Planning Department preservation planner Alexandra Kirby said the three properties before the committee met program criteria after pre-approval inspections and described proposed rehabilitation scopes and 10-year cost estimates: 450 Pacific Ave (contributing building to Jackson Square Historic District) estimated rehabilitation $782,655 and annual maintenance $14,725, with projected property-tax savings in the first year of $99,225 (approximately 26.46% reduction from the factored base year). 1355 Waller St (Queen Anne single-family) estimated rehabilitation $416,635 and annual maintenance $9,920, with estimated tax savings $20,467. 59 Potomac St (contributing building to DeBose Park Historic District) estimated rehabilitation $296,500 and maintenance roughly $2,000/year, with estimated tax savings $23,165.
Vice Chair Aaron Peskin questioned the public-policy tradeoffs: he observed that a $99,000 annual tax savings for 450 Pacific could exceed the first-decade rehab budget and asked whether the Board should adopt a policy to make Mills Act contracts nonrenewing at the outset so the taxpayer benefit phases down after a single term. Assessor's Office staff (Michael Jain) explained the difference between nonrenewal contracts (which phase down the tax reduction to zero over the nonrenewal period) and indefinite rolling contracts (which continue until nonrenewal is filed). Deputy City Attorney Anne Pearson said she would review whether a nonrenewal notice or term could be placed into the original contract consistent with state Mills Act rules.
Supervisors requested staff modeling of the total 10-year value to the owner if a nonrenewal notice were issued at contract inception to inform policy choices. The committee voted to forward the contracts to the Board with positive recommendation.
