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Committee backs three Mills Act contracts, BLA flags long'term revenue impact
Summary
The committee recommended approval of Mills Act contracts for 530 Jackson St., 1035 Howard St. and 331 Pennsylvania Ave., with the Budget and Legislative Analyst noting multi-year property tax reductions and advising policy consideration including notices of nonrenewal to prevent automatic 10-year renewals.
The Government Audit and Oversight Committee on Dec. 4 voted to forward three Mills Act historical property contracts to the full Board of Supervisors with positive recommendations after presentations by Planning Department staff and the Budget and Legislative Analyst (BLA).
Shannon Ferguson, senior preservation planner in the Planning Department, described each application and the rehabilitation and maintenance plans intended to comply with the Secretary of the Interior's standards. For 530 Jackson Street (a contributor to the Jackson Square Historic District) Ferguson said rehabilitation work (fire escape, basement waterproofing, cornices, roof, windows and storefront) is estimated at about $804,000, with annual maintenance at about $19,000. She said the property is valued by the Assessor at over $5 million and met the criteria for an exemption from limitations on eligibility.
For 1035 Howard Street (an Article 11 category 2 Art Deco industrial building), Ferguson described proposed seismic upgrades, roof replacement, terracotta and Art Deco feature restoration, and an estimated renovation cost in the millions; she said the owner has applied for federal rehabilitation tax credits. For 331 Pennsylvania Avenue (a former hospital and National Register'listed resource converted into seven rental units), Ferguson said the rehabilitation plan includes roof replacement and exterior painting with estimated costs of about $400,000 and annual maintenance near $15,000.
Nicholas Menard of the Budget and Legislative Analyst's office placed the fiscal impact in context: the 331 Pennsylvania property would reduce city property tax revenue by about $30,000 a year (below the office's reporting threshold), while two of the contracts would reduce taxes by roughly $260,000 each per year; he estimated the city would forego about $2.6 million on 530 Jackson over the initial 10'year contract term. Menard noted both properties exceed the $5 million cap in Administrative Code Chapter 71 and recommended the Board consider placing notices of nonrenewal so the contracts do not automatically renew without Board preapproval.
Property owners, preservation advocates and neighborhood representatives spoke in favor during public comment. John Sweeney (Turbineau Real Estate Partners), owner of 1035 Howard, said the project will stabilize and preserve a rare Art Deco industrial building and will use union labor. Larry Nibi, owner of 331 Pennsylvania, described seismic upgrades and adaptive reuse to seven rental units. David Wu of Soma Filipinas urged approval, citing cultural and community benefits of the 1035 Howard project. Justin Appold, a nearby homeowner, offered conditional support for 1035 Howard with requests that ground'floor retail and internal corridors reduce neighborhood impacts from storage use.
After discussion, the committee voted 3'0'to''0'0 (Vice Chair Sauter, Member Sheryl, and Chair Fielder voting aye) to forward items 2'4 to the full Board with positive recommendations and indicated intent to work with staff to add a notice of nonrenewal to require Board review beyond the initial 10'year contract period.
