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CITY OF COLTON AGENDA REPORT FOR CITY COUNCIL MEETING OF April 4, 2000 To: Honorable Mayor Pro Tern an Members of the City Council M Approval: Henry T. Garcia, City Manage C! From: Kathy A. Kivley, Assistant to t VeCity Managef Subject: Mill Act Agreement for 1249 North Ninth Street,101 I fornia Date: March 28, 2000 BACKGROUND On June 21, 1994, by Resolution No. R-73-94, the City Council designated the residence located at 1249 North Ninth Street, Colton, California as Historic Landmark No. 42. The resolution stated the "structure is historically significant and should be designated as a permanent historic property in the City of Colton". As a qualified historical structure, the owners of the property may enter into an historical property agreement. A residential building may be eligible as a qualified historical property if it is privately owned and is not exempt from property taxation, and is: a) Listed in the National Register of Historic Places, or located in a National Register Historic District; or b) Listed in any state, city, county, or city and county official register of historical or architecturally significant sites, places or landmarks. The Mills Act, a California state law, enables the City of Colton to enter into a contract for a minimum of ten years or penalties apply. At the end of the ten-year period, the contracts automatically renew each year unless either party elects not to renew. The name commonly given to this property agreement is the Mills Act Agreement. The City of Colton currently has eight qualified historic property Mills Act Agreements recorded. DISCUSSION/ANALYSIS The Mills Act allows property owners to voluntarily enter into historic property contracts with local governments pursuant to Section 50280-90 of the California Government Code. These properties then qualify for the property tax incentives contained in Section 439.2 of the California Revenue and Taxation Code. The incentive is a reduction in the property's assessed value, hence a lower property tax. The intent is for the respective owner to redirect the property savings into the preservation of the property, employment of local contractors and purchase of restoration materials. The property owner agrees to preserve the historic property in conformance with the Secretary of the Interior's Standards for Rehabilitation and the State Historic Building Code. The community benefits from the improvement in the quality of this historic structure. Lafayette Fero and Elizabeth T. Fero, owners of the residential property at 1249 North Ninth Street, desire to improve their property. Realizing there are tax advantages associated with entering into an historic property agreement (Mills Act Agreement) before initiating the restoration of the property, are requesting the City's assistance by entering into this agreement. The Fero's reviewed, approved and executed the attached agreement. The Historic Preservation Commission, at their meeting on March 8, 2000, unanimously supported the Fero's application for a Mills Act Agreement. The attached agreement was review by the Dean Derleth, Best Best & Krieger, City Attorney. FINANCIAL IMPA According to A[ Holliman, Finance Director, the financial impact to the City of Colton is immaterial. Item #3