City readies preservation ordinance

Under consideration for more than a year, the La Cañada City Council approved 3-0 the city’s first historical preservation law Monday night.

Councilman Steve Del Guercio recused himself from the vote, citing a business relationship with resident Brad Schwartz, the owner of a historic Flintridge property who originally proposed the city adopt such an ordinance. Also absent from the vote was Councilman Michael Davitt, who did not attend the council meeting. The ordinance will become law if approved following a second reading, scheduled for Feb. 21.

The Mills Act-based ordinance, which is expected to go into effect at the end of March, allows owners of a historic property to apply for a property tax reduction, contingent on their agreement to restore and preserve the property. But, according to Los Angeles County Assessor John Noguez, homeowners might not get the reduction they’re expecting.

Noguez, on hand in City Hall Monday to answer questions about the law’s implementation, told the council the Assessor’s Office uses a complex formula to determine any potential property tax break under the Mills Act.

“It is a very complicated calculation, and there is no such thing as a guaranteed reduction,” Noguez said. “If you bought [a property] for $100,000 and now its assessed value is $200,000 and its market value is $1 million , you’re probably not going to get a reduction.”

Noguez said that the Assessor’s Office takes the theoretical rental value of a historic home and runs it through a complex formula that accounts for upkeep expenses and other variables to determine what, if any, Mills Act tax savings the owner will receive.

Even if a homeowner does receive a tax break, they can’t use their savings for a Caribbean vacation, Noguez said.

“That money that the property owner saves is…to go back into that property,” he said. “You do have a fiduciary responsibility as a steward to take care of that property.”

Last month the council directed city staff to incorporate into the new law wording that would enable retroactive application of the ordinance. As approved this week, the law establishes Jan. 1, 2000 as the cut-off date for restoration or preservation work to qualify retroactively.

City Planner Patrick Clarke said the ordinance will have a May 15 deadline for applications in 2012, and a March 31 deadline in subsequent years. Applications received after the deadline will be rolled over into the next year’s group.

“We’re working to get the applications through the City Council by the end of the year, so they can work with county to make changes with the tax roll for the next year,” he said.

Clarke said applicants should contact him directly at City Hall to establish a timeline and budget for their planned restoration work, and then obtain a value assessment. A finished application would then be reviewed by the Planning Commission and ultimately approved by the City Council, which has placed a $10,000 cap on the city’s annual expenditure on the program.

Noguez said that the Assessor’s Office would make itself available to field questions from residents, so that homeowners could make an informed decision before applying to the city.

“We are definitely here to talk to those participants before they sign up for this, as it’s a 10-year guarantee and that’s a major component,” he said. “If they opt out of the contract, there is a severe penalty.”

Carol Quan, supervising special assistant at the Assessor’s Office, said Wednesday that the penalty for leaving the program before the 10 years is up is a one-time cancellation fee equal to 12.5% of the property’s current fair market value.

La Cañada Flintridge resident Alan Cade asked that the city specify who was qualified to determine if a property was historically significant.

“Historic preservation architect in not an actual licensed category,” Cade said. “What, if any, credentials should someone who’s proclaiming to be knowledgeable in the field actually have to qualify?”

Clarke said that the city has compiled a list of 18 businesses and individuals used by South Pasadena for their historical preservation ordinance, but City Manager Mark Alexander said city staff would determine a set of qualifications so that the list could be augmented in the future.

After the meeting Cade said that he would definitely consider applying once the ordinance is in place.