Owners of historic buildings in Carlsbad could get a property tax break of 40 percent to 60 percent annually as a preservation incentive under a widely used state program.
Dozens of older properties could be eligible if the city adopts the Mills Act program, which is based on a law the state Legislature enacted in 1972. However, Carlsbad has one particular site in mind, the Culver-Myers-Capp house at the corner of Highland Drive and Oak Avenue, built in 1887.
The two-story Queen Anne-style Victorian has been vacant for years, and the family that owns it has offered it for sale. The city’s Historic Preservation Commission and the City Council have discussed ways to prevent the property from going to a developer that would demolish the historic structure and build multiple homes on the large lot.
One possibility is the Mills Act, which has been used by 90 local governments across the state, including eight in San Diego County. About 370 properties in San Diego County have used the program for property tax benefits, according to the County Recorder’s Office.
In return for the tax benefit, property owners agree to do what’s necessary to preserve or protect the property. A Mills Act program can be adapted to meet the needs of individual cities, and each contract with a property owner is unique, based on the goals for the individual site.
“It’s an awesome program,” Carlsbad Councilmember Peder Norby said during the council’s Oct. 19 discussion. “It’s a carrot approach, rather than a stick” for preserving historic properties.
Encinitas adopted its Mills Act program in 2003 and first used it in 2005 to approve a contract protecting a Tudor Revival house built in 1926 on Sunset Drive by Anthony and Katherine Berhalter. The Berhalters were leading figures in the area’s early development.
Coronado, a small, wealthy community with many older homes, had more than 150 Mills Act agreements as of June, according to a list on the city’s website. Chula Vista, Escondido, La Mesa, National City and the city and county of San Diego also have adopted programs.
Structures eligible for the Mills Act benefits must be at least 50 years old and be listed by the city or state as an historic resource.
The Culver-Myers-Capp house is one of 19 properties the Carlsbad City Council designated as sites of historical interest in 1986.
Council members agreed this month that city staffers should work out details of the Mills Act program and bring a recommendation to the council for consideration. Approval of the program could take a year or longer. Relatively few applicants are expected.
“I don’t see us having a big rush on this,” said Councilmember Teresa Acosta, who added that the program would be an inexpensive way to encourage the preservation of historic structures throughout the city.
Participation would be voluntary, although there could be penalties for withdrawal once a contract is signed. The contract runs with the land and remains valid if the property is sold, so the tax break could be a benefit to the buyer.
To obtain a contract, the property owner would have to pay for a pre-approval inspection and hire a consultant to develop a preservation plan at a cost of $7,000 to $10,000 per site, according to a staff report. The owner also would have to pay all restoration costs, which would vary.
The city’s cost would be less than $3,000 to review each application and about $500 every five years for an inspection to monitor the condition of the property. A typical contract for the program would last a minimum of 10 years.
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Owners of historic homes in Carlsbad could get tax break - The San Diego Union-Tribune
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