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					City of Brea                                                         Agenda Item:
COUNCIL COMMUNICATION                                                Date: May 19, 2009


To:           Honorable Mayor and City Council

From:         City Manager

Subject:      APPROVAL OF A MILLS ACT CONTRACT FOR A HISTORIC
              PROPERTY LOCATED AT 335 SOUTH FLOWER AVENUE

RECOMMENDATION

Approve contract


BACKGROUND

In order to implement the General Plan policy of providing incentives to preserve historic

properties, the City Council approved a program for “Mills Act” contracts through

Resolution No. 99-85. The Mills Act program provides for the City and the owner of an

eligible historical property to enter into an agreement for reduced property taxes in

return for the owner reinvesting the money for the continued maintenance and

preservation of the historical property for a minimum of 10 years.


DISCUSSION

The property owner at 335 South Flower Avenue has applied for a Mills Act contract.

335 South Flower Avenue

The subject property is a French Provincial Revival residence constructed in 1929 and

is identified with an early time period associated with Brea’s local history. It is further

found that the subject property is a valuable example of the craftsmanship associated

with early construction techniques. This French Provincial Revival home features the

original siding, clipped gables, and a high pitched roof-line. The house features an “L”
APPROVAL OF A MILLS ACT CONTRACT A HISTORIC PROPERTY LOCATED AT 335
SOUTH FLOWER AVENUE

plan design with two side-by-side front facing gables. The high-pitched roofs are

covered with shingles and all the gables except the small front-facing one are clipped.




COMMITTEE/COMMISSION RECOMMENDATION

The Planning Commission approved the addition of 335 South Flower Avenue to the

Brea Historic Resources Register in 2005, thereby making it eligible for a Mills Act

contract. The Finance Committee reviewed this item on May 11, 2009 and

recommended its approval.


FISCAL IMPACT

In order to assess the potential loss of revenue to the City as a result of the proposed

Mills Act contract, staff has analyzed the reduction in property taxes for the City of Brea.

According to the Orange County Assessor, the following is an estimate of the Mills Act

Contract Assessment for the property under consideration:

Brea’s share of the property tax    Before Mills Act    After Mills Act      Tax Reduction
                                    (estimate)          (estimate)            (estimate)

  335 South Flower                 $742.77              $371.39               $371.39


                                                                                           2
APPROVAL OF A MILLS ACT CONTRACT A HISTORIC PROPERTY LOCATED AT 335
SOUTH FLOWER AVENUE



Using the Assessor’s estimate, the City will receive approximately $371.39 less per year

in property taxes for 10 years as a result of this contract. The benefit of implementing

the Council policy of providing incentives to preserve this historic structure outweighs

the loss of revenue as created by the Mills Act contract. Presently, the City has nine

Mills Act contracts in place equating to an estimated revenue reduction of $2,475.48

annually. Staff estimates that the number of properties that could potentially participate

in this program is small and requires that the property be listed on the Brea Historic

Register, which is strictly voluntary. Additional Mills Act contracts may be received in

the future as more property owners become aware of the benefits of the program and

as additional historical buildings and districts are preserved. It should be noted that the

City Council has the discretion to limit the total number of Mills Act contracts if the

program begins to significantly impact Brea’s overall level of property tax revenues.

                                                  Respectfully submitted,


                                                  ________________________________
                                                  Tim O’Donnell, City Manager
Prepared by:


_______________________
Shaveta Sharma
Assistant Planner

Concurrence:


_______________________                           ________________________
David M. Crabtree, AICP                           Charles View
City Planner                                      Development Services Director


Attachment: Proposed Mills Act Contract for 335 South Flower Avenue

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