Queue of property owners urge support for program

Benicia City Council heard a queue of Mills Act contract property owners loud and clear Tuesday night and told city staff to forego any consideration of ending those contracts, even when they come up for renewal.

The panel told employees to leave the program as-is for the moment, to make it part of budget discussions and to return with other recommendations about how the Council should update the program.

No formal vote was taken on the matter.

The topic of how to modify the city’s Mills Act contracts — which reduce property taxes by as much as half for historic buildings in exchange for completion of a work plan and subsequent maintenance of the site in historically appropriate ways — arose Nov. 18, 2014.

That’s when the Council approved the latest of the city’s 37 Mills Act contracts, causing the program to reach the Council-established threshold of $35,000 in lost revenue and staff time.

At that meeting, the Council asked city employees to formulate options for continuing the program.

An assessment of the program and three modification proposals were presented to the Historic Preservation Review Commission on March 26, a meeting that also was well attended by those with Mills Act contracts.

One proposal would change the threshold from a dollar amount to a maximum number of contracts, because that is a “hard number” — easy to define. Property tax lost revenues, on the other hand, vary from year to year, presenting a more difficult target to pin down, Principal Planner Amy Million told both the HPRC last month and the Council on Tuesday.

Another option was to choose not to renew existing contracts, which would let them end during a 10-year period, then opening the program to new applicants or those who sought to apply again.

Million also suggested reexamining or modifying the standards for applications to the program.

But the program’s tax savings don’t cover the added expense of rehabilitating, restoring or maintaining a home built in the early 1900s or mid-to-late 1800s, property owners told the Council.

Karen Hamilton, who owns one of Benicia’s landmark homes, the Frisbee-Walsh House across the street from City Hall, said the historic building was collapsing when she bought it. Stairs didn’t reach the floor, dead animals were on the second floor, bricks from the chimney were scattered from collapsed mortar, and the home’s foundation was minimal.

Under the Mills Act, she said, she’s been able to afford the extensive repairs that should help the house last another 160 years.

Several others said they bought their homes with the thought that they would live the rest of their lives in the historic houses, despite the added costs of maintenance. Without Mills Act contracts, they said, repairs would be unaffordable as the residents age and would depend on outside contractors for the work.

They noted that as they retired to a fixed income, repairs would be more expensive to complete.

Others described how they have hired local contractors and bought supplies from Benicia businesses.

Patrick Ward, who has a Mills Act contract and who Councilmember Tom Campbell said was instrumental in bringing the program to the Council’s attention, said he hired Benicia architect Rae Lynn Fiscalini for designs, Benicia house mover and restorer Phil Joy for seismic retrofitting and many others for foundation work, plumbing, central heat and air conditioning, electrical wiring and other tasks.

Ward said he’s spent tens of thousands of dollars with local businesses, far more than his tax break. And when he’s had to hire workers from outside the city, they too have spent money here.

Owners of the other 36 Mills Act properties “have put a lot of money into the local economy,” he told the Council.

Karen Burns, whose mother was instrumental in getting some of Benicia’s historic assets recognized, doesn’t own a Mills Act home — hers is too young — but pointed out the program’s importance by comparing some of the restored private homes to the condition of the Fischer-Hanlon House in the Benicia Capitol State Historic Park.

She lamented that the state of California doesn’t participate in Mills contracts, and said the home on state park land is in “one of the worst” conditions of the city’s historic houses.

“Our home was built in 1910,” said Brandon Lane, who said he bought his home at 125 East I St. despite its lack of central heat because he wanted to live close to the city’s downtown area.

“We take pride in its craftsmanship,” he said.

Lane said the Mills Act program gives owners of older homes an incentive to keep them restored according to historic preservation standards, and that has led “to part of Benicia’s charm” — one of the reasons he moved his family here.

“This is not a good time to think about losing what we’re trying to build up here,” said Toni Haughey, owner of a historic house, local real estate agent and member of the city’s Historic Preservation Review Commission.

Haughey reminded the Council that five Mills Act homes are featured on the city’s website, and that the city’s historic charm brings visitors to Benicia’s downtown shopping district.

“We could be a little Charleston,” she said of the South Carolina city that buys old homes that have fallen into disrepair, restores and sells them to maintain its own picturesque atmosphere.

“We don’t have room to grow,” she told the Council, referring to the city’s built-out status, “but we do have room to impress.”

However, “We’ve maxed it out,” City Manager Brad Kilger said of the program, telling the Council no new applications could be considered. “If you want to expand the program, you must add money.”

He said city employees who looked at alternatives also were trying to keep an eye on the city’s dwindling finances that keep putting the budget into deficit territory. “We beat into their heads there is no money,” Kilger said.

Though Mayor Elizabeth Patterson hoped to convince the panel to arrange a workshop, in part to gain more information about the benefits of the program, other members thought that unnecessary in the wake of Tuesday’s testimony.

Vice Mayor Mark Hughes opposed limiting contracts to the current 37 and disagreed with issuing any notices of non-renewal, though he also didn’t want the program to be unlimited in participants — or dollars lost to the city.

Instead, he said, applications should be decided on merit and within the city’s budget constraints.

Councilmember Christina Strawbridge, saying she always looked for the bottom line in city projects, said, “I think the Mills Act is a wonderful program” that brings value to the city through encouragement of historic preservation.

After hearing property owners explain how complying with their work plans and the city’s agreement to automatically renewed contracts had encouraged them to invest in expenditures they could pay over time, Strawbridge said, “We need to keep our word.”

Councilmember Alan Schwartzman agreed that some benefits are hard to quantify, but added that the program “definitely has a benefit to the district.” He urged the Council “to see how we can make it work prudently. … Improving the properties improves downtown.”

He disagreed with a suggestion to generate money to compensate for revenue loss through additional fees on new construction, and suggested the city increase the number of contracts to 40.

Councilmember Tom Campbell suggested increasing the number by more, five or 10, and said once that limit is reached the Council should consider leaving the program as-is or vote on another increase.

The Mills Act allows residents the privilege of “aging in place,” Patterson said.

She said the proposal for a new fee “had some merit.” Other suggestions, such as revising work plans and stricter compliance enforcement, already have been addressed, she said, agreeing that the program’s expansion should be tied to the city’s budget.

Patterson recommended that additional reports from employees on the matter be reviewed by the HPRC, then sent to the Council for consideration.