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Committee advances six Mills Act historic-property contracts to full Board
Summary
The Government Audit and Oversight Committee voted without objection to forward six resolutions approving Mills Act contracts for historic properties across San Francisco, with staff and the Assessor explaining rehabilitation plans, estimated restoration costs and tax-valuation methods.
The Government Audit and Oversight Committee on Jan. 7 voted to forward six resolutions approving Mills Act historical property contracts for privately owned buildings across the City and County of San Francisco.
Chair Jane Kim said the committee would call items 1 through 6 together and moved them forward with recommendation to the full Board of Supervisors without objection.
Shannon Ferguson of the Planning Department summarized the Mills Act program, which permits local governments to enter into 10-year rolling contracts that reduce property taxes for owners of qualifying historic properties in exchange for preserving and maintaining architectural character. "This agreement provides property tax reductions to owners of those historic properties who can then allocate the savings towards an appropriate maintenance and restoration plan," Ferguson said. She noted the department currently holds 31 Mills Act contracts and that eligibility includes local landmarks and properties on the California or National registers.
Ferguson gave item-level details for each property: 2253 Webster Street (Italianate single-family; proposed rehabilitation items include flashing, roof repair and dry-rot work; rehabilitation estimated over $87,000; annual maintenance about $3,500), 353 Kearney Street (five-story brick commercial building; structural report submitted; rehabilitation estimated over $1,000,000; annual maintenance about $23,000), 465–467 Oak Street (two-family Italianate; seismic upgrades and roof work estimated over $300,000; annual maintenance about $2,000), 587 Waller Street (Queen Anne single-family; seismic, foundation and façade work estimated over $337,000; annual maintenance about $1,300), 354–356 San Carlos Street (two-family Italianate; prior rehabilitation reported; roof replacement estimated $50,000 over 10 years; annual maintenance about $1,600), and 811 Treat Avenue (Italianate main residence designed by a noted local architect; repairs estimated over $67,000; annual maintenance about $2,100).
Michael Jain of the Assessor'Recorder's Office explained valuation under Mills Act contracts: assessors compare a factored base-year value, a restricted income-based value and a market value, and enroll the lowest of the three as the taxable value. "Once we come up with these three value tests, we enroll what's called the lower of the three comparisons, which becomes a taxable value," Jain said. He clarified that 811 Treat shows a smaller assessed-value reduction because only the front portion of the property is subject to the contract while the rear portion is valued at market rates.
Amy Beinart, representing Supervisor Hillary Ronen's office, offered support for the two District 9 properties. Supervisor Veil Brown spoke in favor of the Oak Street property, noting the owners committed to invest over $350,000.
The committee noted the Historic Preservation Commission had unanimously recommended all six contracts at its Oct. 3, 2018 hearing, and staff recommended approval. With no public comment, the committee forwarded items 1–6 to the full Board with a positive recommendation.
The Board of Supervisors will consider the items at a later meeting; the Mills Act values would become effective for 2019 if the Board approves the contracts.
