Heisler Building gets a tax break

Property taxes for the renovated Heisler Building will be reduced thanks to the City Council’s approval Tuesday of an owner’s application for a Mills Act Historic Preservation agreement.

Laguna Beach participates in the Mills Act agreements with the state to encourage the preservation of historic structures by the reduction of property taxes and the granting of other benefits. The property owner is expected to use the money saved on taxes over the 10-year life of the agreement to maintain and/or rehabilitate the historic structure.

“My concern has more to do with the process than this particular application and more to do with the appropriateness of a Mills Act Agreement for a new building,” said Councilwoman Verna Rollinger, who cast the lone vote against the agreement. “When a building is replicated, it is essentially a new building and it should last for a long time without special maintenance techniques.”

The city’s Heritage Committee voted 5 to 1 in favor of the agreement, with Mollie Bing dissenting, because, she said, nothing was left of the original building.

Committee Chairman Jon Madison supported the application because of its position and prominence in town and said the renovation should be rewarded and was worthy of an agreement.

The building has E for Excellent rating on the City Historical Register.

Under Laguna’s historical ordinance, property owners can restore or replicate buildings to certain standards while receiving benefits, including reduced taxes and parking requirements, variances and height limitations and setbacks can be waived, along with fees, Rollinger said.

Restoration differs from replication, which is not as true to the original structure, as used by Rollinger.

Property owners are asked to describe what rehabilitation or maintenance is to be funded by reduced taxes over the next 10 years.

The application, signed by Heisler Building owner Sam Goldstein, listed total structural upgrades on floors, walls, roof and exterior, as approved by the Heritage Committee in 2007 and now completed.

“I believe the Mills Act should be reserved for structures that are preserved and preservation should be valued more over replication,” Rollinger said. “We are all glad that we still have the Heisler Building and look forward to the new businesses opening, but it is nearly all, or all, new materials. The windows and doors are a different style [from the original] in different locations and dormers have been added to the roof.

“Is it beautiful? Absolutely. But I don’t think it deserves a Mills Act Agreement.”

Laguna has participated in Mills Act Agreements since 1993. In 2006, the city began accepting lesser rated structures for agreements.

Thirty-one homes have made the grade. City staff is expected to make periodic checks on the properties to verify compliance with the contracts

In another action related to the Heisler Building, the council voted 4 to 1 to ask the Arts Commission and the Heritage Committee to comment on a proposal to exempt historic structures from Art in Public Places requirements if the immediate past use is continued, Rollinger opposed.

The exemption would eliminate the now required cost of providing art at the project site or paying an in-lieu fee for art on another site.

Another alternative would be to expand the definition of artwork to include historic structure renovation, or the council could just exempt historic buildings from the Art in Public Places requirements, Pearson suggested.

Pearson expects to hear back from the commission and the committee by the Nov. 16 meeting.