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Committee conditionally backs Mills Act contract for landmark 1818 California St., trims tax benefit

Budget and Finance Committee, City and County of San Francisco · November 10, 2010

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Summary

The committee forwarded a Mills Act historical‑property contract for 1818 California St. (Lilienthal/Orville Pratt House) to the Board but amended the property‑tax reduction to reflect an annual reduction amount of $22,667 rather than the higher tax reduction initially calculated; staff said the work requires $250,000+ in seismic repairs and annual maintenance is estimated at $22,667.

The Budget and Finance Committee recommended that the Board approve a Mills Act contract for 1818 California Street, landmark #55 (the Lilienthal/Orville Pratt House), but the committee amended the fiscal terms to limit the owner’s annual tax benefit to $22,667 rather than the larger first‑year reduction originally calculated in the assessor’s preliminary numbers.

Planning staff told the committee the property qualifies as an individual landmark and that the Historic Preservation Commission recommended the Mills Act contract 5‑0. Tara Sullivan of the Planning Department noted that the property was assessed at more than Planning’s $3,000,000 guideline (transcript said assessed over $3,600,000) but the HPC used an established exception for landmark properties.

Structural engineer Tom Lutke described the work as a safety‑oriented seismic retrofit: "It's really just a safety retrofit at this point in time," he said, explaining that the ground floor has unreinforced masonry and that new steel frames would provide lateral and vertical load resistance so the building does not collapse in a quake.

Budget analysis indicated the first‑year tax reduction calculation would total roughly $31,006 and reduce taxes paid to the city in that year to about $10,692; the analysis projected a ten‑year reduction around $316,170. Planning and budget staff also described an annual maintenance estimate of $22,667. Several supervisors argued the Board should align the tax benefit more closely to maintenance liabilities and the one‑time retrofit need; the committee voted to amend the reduction to $22,667 and forwarded the contract to the Board with that recommendation.

Property owners and public supporters said they needed the contract to finance the upfront $250,000+ retrofit and to ensure long‑term preservation of the landmark. Planning staff confirmed the city will inspect annually and may terminate the contract if the owner fails to meet maintenance obligations.