Laguna Beach : City OKs Property Preservation Plan

Property owners with structures considered to be of excellent historical value may have the opportunity to reduce their property taxes in exchange for agreeing to preserve the “historic integrity” of the buildings.

Under a program approved by the City Council last week, residents can take advantage of benefits based on the Mills Act adopted by the state Legislature in 1976.

The program allows the city to enter into a 10-year contract with people who own property that the city wants to preserve. The properties would be reassessed at a lower value and the owners would be expected to use the money saved from the lower tax bill to maintain or rehabilitate the historical structures.

“It looks to me as though the homeowner is winning all around,” Mayor Lida Lenney said in voting for the program. “And certainly the community is winning.”

Community Development Director Kyle Butterwick said property owners could save up to 40% on their annual tax bill, depending in part on when the building was purchased. A penalty is imposed on participants who choose to revoke their contracts.

The city has about 122 structures listed on its Historic Register, but only 29 of those are in the excellent category. The Planning Commission had recommended that all Historic Register properties be eligible to take advantage of the Mills Act.

However, the council agreed with the city staff’s recommendation that, for now at least, only the owners of the most historically important buildings in the city may take part in the program.

To help offset the costs for the staff time required to handle such a program, participants will have to pay a $165 fee. The program will cost the city an unknown amount in lost property tax revenues.