Proposed changes to the Mills Act spark opposition
Recently released recommendations for proposed changes to Mills Act contracts have sparked opposition throughout the preservation community and beneficiaries of Los Angeles’ premier economic incentive program for historic preservation.
A recent review of the Mills Act Program by the City of Los Angeles resulted in a series of recommendations, including the controversial proposal of non-renewal of current Mills Act contracts more than 10 years old.
If such a change were enacted it would financially affect many members of our historic communities in Greater Wilshire who are provided with a generous tax abatement in exchange for the preservation and maintenance of their historic properties.
Enabled by state legislation in 1972 and established in Los Angeles in 1996, the program has been an enormous success. Single and multifamily residential as well as commercial properties qualify if they are designated as a Los Angeles Historic-Cultural Monument (HCM) or a contributor to an Historic Preservation Overlay Zone (HPOZ). A Mills Act contract is an annually-renewing 10-year contract between a property owner and the city, transferrable to a new owner upon the sale of a property. Contract holders save over $20 million in property taxes annually, a savings that many use to reinvest through the necessary upkeep and maintenance of their historic properties.
On July 19, the Cultural Heritage Commission (CHC) heard the first report on the city’s assessment of the Mills Act Program, conducted by Robert Chattel and Associates. According to the assessment’s Executive Summary, this review examined staffing, program revenue streams, and “the allocation of property tax savings among existing contracts to inform a more equitable distribution of program participation across the city.”
THIS HOUSE in the Wilton Historic District was preserved through the Mills Act.Growth, equity challenges
Growth, equity challenges
They found that although the program had been a success, its growth had surpassed the capacity of city planning to administer it effectively. Also, changing city priorities such as issues of equity and housing affordability presented further challenges to ensure that properties in areas with “high barriers to opportunity” could also benefit from the program.
While there has been a great deal of support for the report’s addressing of the equity issue through suggested strategic outreach targeting high priority areas and prioritizing at least half of new applications to those areas(including the greater inclusion of affordable multi-family housing), other recommendations focusing on the program’s financial sustainability were not as well received. The greatest opposition came to the proposed revision of contract terms to be limited to 20 years for new contracts and the non-renewal of existing contracts older than 10 years old.
More than 100 members of the public called in to the CHC’s July meeting and an even greater number to the Aug. 8 evening presentation, the vast majority of comments focusing on opposition to this particular recommendation. Condo owners in historic downtown and Hollywood buildings were particularly represented in opposing the suggestion for non-renewal.
According to Ken Bernstein of the Office of Historic Resources, this is only the beginning of the process to refine the Mills Act Program. Feedback continues to be gathered for a draft ordinance to be crafted — a step which will occur before Neighborhood Councils will have time to weigh in.
In the meantime, for those who own Mills Act properties and wish to review the 2022 Mills Act Assessment Report as well as provide comments, go to tinyurl.com/2h5kn88w to find links, contact details and a feedback form.
Category: Real Estate
