On Tuesday, Sept. 29, about 20 people turned out to hear County Historic Preservation Officer Keith Herron discuss a state program to provide tax rebates to owners of historic properties.
The Mills Act, enacted in 1972, provides up to 50 percent annual tax credits to owners of designated historic properties as part of a contractual agreement with property owners to remediate and maintain the upkeep and historic character of their properties. It is in effect in many jurisdictions throughout the state. Contracts are for renewable 10-year periods. Once entered into, Mills Act contractual obligations pass to new owners, with consequent benefits and restrictions, upon sale of the property. Mills Act contracts still in effect must be disclosed to potential buyers.
Herron explained that the Riverside County Board of Supervisors must pass an ordinance to participate in the Mills Act for use in unincorporated areas of the county such as Idyllwild. Currently Riverside County cities of Riverside, Corona and Palm Springs have Mills Act programs in place, as do many other cities such as Los Angeles, Redlands, Santa Ana and San Francisco.
Questions at the Sept. 29 meeting revolved around if and how the County Board of Supervisors might be moved to incorporate the program. Herron noted there are a number of avenues for Idyllwild Historic Preservation District property owners to petition the BOS for Mills Act adoption – through the local historic district review board, through the county historical commission, through the county planning department or directly to Third District Supervisor Chuck Washington’s office. “I have made [Supervisor] Washington aware there is some interest,” said Herron. “One property owner can start the ball rolling, that’s really the first step.”
There are around 50 properties within the IHPD designated as contributing resources of the district, having been judged to have historic significance and value. For properties to qualify for Mills Act contracts, they must be listed on any federal, state, county or city register. Both owner-occupied historic residences and income-producing properties can qualify for Mills Act contracts. Even if an Idyllwild property is outside the historic district and has not been categorized as historic, owners can petition for stand-alone certification.
Herron suggested more Idyllwild historic district property owners who express interest in Mills Act adoption, the more likely the BOS would consider approving a resolution establishing the program.
Warren Monroe, local historic district board chair, suggested the BOS, in authorizing the Idyllwild Historic Preservation District, has already shown political willingness to protect Idyllwild’s historical character.
Herron suggested that since Mills Act contracts are essentially an exchange (fewer tax dollars to the county in exchange for historic property maintenance by owners), it is likely few Mills Act contracts would be issued annually in Idyllwild even if the BOS adopts the program. Herron noted that in the large city of Riverside, only seven to ten new Mills Act contracts are approved annually. He posited the annual number in Idyllwild would likely be fewer, perhaps no more than five.
In the city of Riverside, the steps to enroll are: File an application with a non-refundable application fee. Once approved and the contract is recorded, a contract “initiation fee” is required. Accepted owners then must submit photos of the structure’s current condition and file a 10-year rehabilitation plan.
Owners submit receipts for completion of projected plan rehabilitation phases. Significant financial penalties could accrue to Mills Act property owners if they default on their agreed maintenance plans and contractual obligations. Applicable California Government Codes stipulate cancellation fees of 12.5 percent of the current fair market value of the property, as determined by the county assessor, could be levied in the event of contract breach. Not all Mills Act programs are identical. An Idyllwild Mills Act program would adhere to basic state authorizing legislation but could differ in specific terms.
In response to one questioner who was already ready to remodel, Herron stressed the Mills Act is not yet in place and no tax credits for maintenance or remediation of Idyllwild historic properties would be issued unless and until the Act is adopted by the BOS. When asked how long it could take to get the Act in place once property owners express interest and the BOS decides to move forward, Herron estimated six months to a year.
Herron provided handouts from other Mills Act districts and advised interested Idyllwild historic property owners to research the benefits and responsibilities under the Mills Act legislation adopted by California in 1972 and currently in effect in many state jurisdictions.
Property owners can address additional questions to Herron at [email protected] or at (951) 955-4558.