HomeMy WebLinkAbout2025-01-23; Historic Preservation Commission; 02; Mills Act Implementation Review and FeedbackMeeting Date: Jan. 23, 2025
To: Historic Preservation Commission
Staff Contact: Mike Strong, Assistant Director, Community Development
442-339-2721, mike.strong@carlsbadca.gov
Subject: Mills Act Implementation Review and Feedback
Location: Citywide
Commission Action: ☐Decision ☒ Recommendation to City Council ☐ Informational (No Action)
Recommended Actions
Continue discussion about the Mills Act Program and provide recommendations to enable new Mills Act
Program applications and the continued expansion of the Program.
Project Description
Enacted by the State of California in 1976, and adopted in the Carlsbad Municipal Code on Nov. 3, 2022, the
Mills Act is state-sponsored legislation that grants local governments the ability to directly participate in an
historic preservation and economic incentive program. The city’s Mills Act Program allows and grants
participating cities and counties the authority to enter into contracts with owners of qualified historic properties
who actively participate in the rehabilitation, restoration, preservation, and maintenance of their historic
properties. The focus of the program is preserving, maintaining, and/or restoring the significant features that
define the historical character of the property (such as structural and architectural elements). The property
owner promises to make improvements that will not detrimentally affect the architectural, historical, or
aesthetic integrity of the property. Since the costs of doing so can be high, property tax relief can offset these
costs. A formal agreement, generally known as a Mills Act or Historical Property Contract, is executed between
the local government and the property owner for a minimum ten-year term. Contracts are automatically
renewed each year and are transferred to new owners when the property is sold. With the advice of the Historic
Preservation Commission, the City Council approves all final contracts. For more information about the Mills Act
Program and the historic designation process, please review the city’s informational bulletin (IB-161) attached to
this staff report (Exhibit 2).
The Mills Act Program is single most important economic incentive program available in California for use by
private property owners of qualified historic buildings. Currently there are 99 agencies across the state
participating in a Mills Act Program1. Eight agencies listed in the Office of Historic Preservation inventory are in
the San Diego region. The City of Carlsbad should be added to the Office of Historic Preservation inventory
(resulting in nine agencies participating in the San Diego region). Some of the agencies listed in the statewide
inventory are large, so they naturally have many contracts in their jurisdiction. For example, the City of San
Diego has 901 Mills Act contracts and the City of Los Angeles has 948 contracts. Some agencies are smaller in
size but still are successful in enrolling properties. In Dana Point, the city’s inventory identifies a total 73 historic
resources, 37 of which are participating in their Mills Act Program. And there are 180 contracts in the City of
Coronado.
After two years of implementation, no Carlsbad properties are enrolled in the Mills Act Program. Since its
adoption, several homeowners have expressed interest in the program. Two households applied for the
program in its inaugural year (2023 calendar year). Both applications were later withdrawn due to processing 1
Office of Historic Preservation. Mills Act Contracts. https://ohp.parks.ca.gov/?page_id=30346
Jan. 23, 2025 Item #2 1 of 15
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HISTORIC PRESERVATION COMMISSION
Staff Report
costs, improvement costs, and/or restoration requirements. No applications were received for the 2024
calendar year.
As a measure to track the Program success and balance its use with an annual loss of tax revenue, the City
Council directed staff to work with the Historic Preservation Commission regarding the status of the city’s Mils
Act Program. This work effort is also reflected in the Historic Preservation Commissions 2024-2025 Annual Work
Plan. At its July 8, 2024 meeting, the Historic Preservation Commission provided initial feedback about the Mills
Act Program and provided guidance to staff on ways to strengthen the program. At its Jan. 23, 2025 meeting,
city staff will provide a presentation on the Program’s assessment and identify operational strengths and
challenges, as well as other goals, strategies, and recommendations for the Mills Act Program.
The following provide a summary of the feedback received so far:
•Updating the website with helpful information regarding the program, including a pre-screening
process for homeowners to evaluate their probability of success with the program.
•Education and marketing to homeowners about the program is sufficient to promote the program.
•Maintaining historic buildings helps promote preservation, and therefore related incentives.
•Subsidizing the program may stimulate interest.
•Reduce the type of documentation required to substantiate eligibility.
•See what other agencies are doing to promote participation.
Based on this initial feedback and in an effort to strengthen and potentially expand the Program, city staff is
recommending the Commission review and consider the attached Resolution (Exhibit 1) to make a formal
recommendation to the City Council. City staff believes that improving accessibility to the Mills Act Program will
increase the interest and participation rate in Carlsbad. To maximize its benefits, city staff recommends that
policy direct the Program’s focus on outreach, education, and temporarily reducing the costs to enroll in the
Program. Currently, the Mills Act Program application fees are $4,211. Most property owners find that the fees
are too high for an incentive that may or may not be granted. In comparison, fees charged by many other local
governments range from no fee at all, or around $2,000 (Exhibit 3). It is important to note that the attached
Resolution does not recommend proposed amendments to the types of properties that may be eligible
(“Qualified Historical Property”) for the Mills Act Program.
Fiscal Analysis
There are no significant fiscal impacts that would result from adoption of the attached Resolution. The
recommendations to City Council requests a pilot program to be considered that incorporates some of the
approaches utilized by other agencies.
The Community Development Department oversees all Mills Act Program applications and would monitors Mills
Act Contract properties. Currently, the city charges a fee of $4,211 to process a Mills Act Program Agreement
and another $1,964 for a Local Register application. It is estimated that the user fee adjustments recommended
in the Resolution would be temporary in nature, necessary to jump start the program. Reducing the costs to
process applications during a two-year term would temporarily waive the processing fees related to a Mills Act
Program application. This would mean that the majority of the costs to process Mills Act applications and
historical designation nominations would be absorbed by the General Fund with in-kind services (an anticipated
impact of less than $4,000 for each property). The applicant would still be required to pay the Local Register
application fee ($1,934). While this provides an incentive to all property owners that may qualify for the
Program, it provides a greater incentive for sites already designated as Qualified Historical Properties (e.g.,
properties already listed in the Local Register).
Because a Mills Act Contract results in a tax relief incentive for the property owner, it also results in a reduction
in the annual revenue for the Carlsbad Unified School District and a small reduction in city General Fund
revenue. However, as suggested in the attached Resolution, the recommendations will jump start the Program (for two years) to improve access to the Mills Act Program, and facilitate broader use in future years, specifically,Jan. 23, 2025 Item #2 2 of 15
by small-scale residential and commercial properties. Still, the proposed reforms would expect to yield only one
or two applications per year, so that staff would still be able to effectively manage the Program’s
implementation. The Mills Act Program has demonstrated in other municipalities a positive impact on
reinvestment in historic properties and providing financial assistance, especially to single-family homes, small-
scale residential and commercial properties.
Next Steps
The proposed Resolution is before the Commission so that it may recommend adoption, rejection, or adoption
with modifications to the City Council. The Commission’s recommendations will be presented to the City Council
for consideration at a meeting in the spring. The Chair or Vice Chair will be responsible for representing the
Historic Preservation Commission at this City Council meeting and for speaking in support of the Commission’s
recommendations.
Environmental Evaluation (CEQA)
The California Environmental Quality Act (CEQA) requires analysis of agency approvals of discretionary
“projects.” A “project” under CEQA, is defined as “an activity which may cause either a direct physical change in
the environment, or a reasonably foreseeable indirect physical change in the environment” (Public Resource
Code section 21065). The proposed action does not constitute a “project” within the meaning of CEQA in
accordance with Public Resources Code section 21065 or CEQA Guidelines section 15378.
Exhibits
1.Resolution adopting recommendations to enable new Mills Act Program applications and the continued
expansion of the program
2.Historic Preservation IB-161
3.Cost recovery survey
Jan. 23, 2025 Item #2 3 of 15
RESOLUTION NO.2025-002
A RESOLUTION OF THE HISTORIC PRESERVATION COMMISSION OF THE CITY
OF CARLSBAD, CALIFORNIA, ADOPTING RECOMMENDATIONS TO ENABLE
NEW MILLS ACT PROGRAM APPLICATIONS AND THE CONTINUED
EXPANSION OF THE PROGRAM
WHEREAS, the Mills Act Program provides cities with a mechanism to encourage the
preservation of historic buildings; and
WHEREAS, the city adopted its own local Mills Act Program on Nov. 3, 2022; and
WHEREAS, the Historic Preservation Commission desires to make recommendations to entice
property owners to utilize the Mills Act Program and enable new Program applications.
NOW, THEREFORE, BE IT RESOLVED by the Historic Preservation Commission of the City of
Carlsbad, California, as follows:
1.That the above recitations are true and correct.
2.The Historic Preservation Commission supports and recommends the following
measures to be considered by the City Council:
A.Expand awareness of the Program. Direct staff to identify residential and
commercial properties that meet the qualifications and coordinate another
round of direct marketing to ensure that properties with the greatest needs will
receive the most benefit of targeted outreach.
B.Pre-application workshop. With the overall cost, number of hearings, length of
processing time, and potential scope of preservation or restoration efforts to be
undertaken, there is a perceived barrier to participate, especially for a single
family homeowner and small commercial property owner to navigate. Although
city staff already created an informational bulletin to increase awareness about
the Program, direct staff to conduct and record (for distribution) a virtual pre
application workshop to supplement existing educational materials.
C.Amend existing Program fee structure. The city has established a series of fees
to cover a portion of the city's expenses associated with processing individually
submitted historical nominations and Mills Contract Program applications. As of
this writing, a majority of the cost associated with the designation of individually
submitted historical resources is paid for by General Fund revenue (adopted fees
recover only a portion of the total cost). From FY 2025-2026 through FY 2026-
Exhibit 1
Jan. 23, 2025 Item #2 4 of 15
2027, waive the Mills Act Contract processing fee so that no fee is charged for
submitting a Mills Act Contract application. Waiving the fee during a two-year
period would encourage property owners to participate in the program. The cost
recovery fee would be re-instituted during the FY 2027-2028 budget hearings in
June 2027. The applicant would still be responsible for paying other applicable
processing fees. Moreover, the applicant would be responsible for ensuring that
any documents are properly recorded by the County Recorder's Office.
D.Simplify Permit Materials. Review and develop standardized rehabilitation and
maintenance plan (10-year work plan) templates and create a template for
historical assessment reports, thereby reducing overall costs to applicants.
E.Monitor the Program. As a measure to track the Program and balance its use
with an annual loss of tax revenue, the Community Development Department
must submit a report and schedule a meeting before the Historic Preservation
Commission every two years regarding the status of the Mils Act Program. This
will help provide oversight of the program where no monitoring mechanism is
currently required.
F.Eligible expenses. The Mills Act Agreement, after being recorded with the
county, usually provides substantial property tax reduction to the property
owner. The Mills Act is not intended to be a subsidy for those seeking to remodel
their property or a tool to assist with mortgage payments. The purpose of the
program is for the funds saved in property taxes to be utilized for the
rehabilitation and maintenance of the property and all work must conform to
the Federal Guidelines developed for the treatment of historic properties,
known as the Secretary of the Interior's Standards for Rehabilitation. In general,
the total cost estimated in a 10-year work plan should equal the approximate
amount of property tax savings over the first ten-year term of a Mills Act
Contract. Future Mills Act Contracts should acknowledge that any qualified
rehabilitation and restoration work that commenced up to two years before the
establishment of the Contract may be indicated on the ten-year work plan.
Examples of eligible work should be expanded to include consulting and
Jan. 23, 2025 Item #2 5 of 15
professional fees. Moreover, any new addition or structure completed on the
property shall be excluded from the Mils Act valuations.
3.The city greatly values the preservation of its historical resources and neighborhood
character which occurs as a result of the designation of historical properties. The city
wishes to comply with the requirements of the Mills Act by providing a framework for
local interpretation and application of the provisions of the Mils Act, as a means of
maximizing local control of, and confidence in, the Program. They should be
interpreted to supplement, rather than supersede, statutory requirements and Mils
Act Contract obligations.
PASSED, APPROVED AND ADOPTED at a Special Meeting of the Historic Preservation Commission of
the City of Carlsbad on the 23rd day of Jan., 2025, by the following vote, to wit:
AYES: Majer, Diaz, Jacobs, May
NAYS: None.
ABSTAIN: None.
ABSENT: Patty Schreibman
MIKE STRONG, Assistant Director of Community
Development
Jan. 23, 2025 Item #2 6 of 15
Community Development Department | 1635 Faraday Ave. | Carlsbad, CA 92008 | www.carlsbadca.gov
Historic Preservation
IB-161
The City of Carlsbad has a long and rich built
environment history with its origins dating back to
the late 19th century as a “whistle stop” on the new
California Railroad. The city’s namesake dates back
to the 1880s when John Frazier, a former sailor, dug
a well in the area and sold the water to train
passengers. It was found that the fresh water was
like that found in some of the most renowned spas
in the world, so the town was named after the
famed spa in the Bohemian town of Karlsbad.
As the area grew over the decades, many of the
historical structures and landmarks built in those
earlier years and later still remain. The city
recognizes the importance of restoring, preserving,
and protecting these older buildings in order to help
give people a sense of place and connection with the
past.
This Info-Bulletin provides an overview of the
historic designation process and various incentive
programs that are available to owners of these
historical structures. Through these programs, we
can help protect and maintain the city’s rich cultural
history for generations to come.
Designated Historic Resources
A potential historic resource can be more than just a
building or structure; it may be a landmark, site,
landscape features, or artifact.
However, in order for a potential historic resource to
be considered a designated “Historic Resource” that
is subject to the benefits prescribed under the city’s
historic preservation code, the property owner must
provide reason and justification supporting why the
resource is significant and should be protected.
Documents Referenced
CA Mills Act - Contract; §50280-50290
CA Mills Act - Tax Code; §439
Secretary of the Interior’s Standards; website
State Historical Building Code; §18950
Carlsbad Historic Preservation Code; Title 22
Land Use Review Application; P-1
Historic Preservation Permit Form; P-40
Mills Act Supplemental Checklist; P-40(a)
Exhibit 2
Jan. 23, 2025 Item #2 7 of 15
{city of
Carlsbad
Informational Bulletin
Page 2 of 7 IB-161_Historic Preservation
Step one in this process is to determine whether the
resource meets initial historic qualifications. The
property owner must show that the potential
historic resource is at least 50 years old and meets
at least one of the following criteria:
o It is associated with significant events that
contribute to our city’s, state’s or nation’s
history;
o It is identified with a person or persons who
significantly contributed to the culture and/or
development of the city, state, or nation;
o It is an excellent example of an architectural
style/period or work of known professionals
who significantly influenced local, state, or
national heritage; or
o It yields information important to the
prehistory or history of the area, state or
nation.
The potential historic resource must also retain
enough of its historic, cultural or architectural
character or appearance to be recognizable as a
historic resource and to convey the reasons for its
significance. Resources meeting this initial
qualification step can then proceed to Step 2:
Application Submittal. Under this step, the property
owner must file a Historic Resource Designation
application to add the property to the Carlsbad
Historic Resource Register (Register), along with
documentation showing how the resource meets
the criteria selected in Step 1 above. Such
supporting documentation may include site records,
reports and surveys prepared by qualified
professionals, or other similar documented evidence
showing the historical importance of the property.
Once filed and reviewed by the city’s 3rd party
historical consultant, the application and findings
are presented before the Historic Preservation
Commission (Commission) for consideration.
Following their review, the Commission makes a
recommendation to the City Council whether the
potential historic resource should be included in the
Register. Only those properties included in the
Register are eligible to participate in the historic
preservation incentives discussed in this bulletin.
Removal from the Register
Because this is a voluntary program, property
owners may request their property to be removed
from the Register. The Commission and City Council
consider the de-designation application.
Properties that are removed from the Register will
no longer be eligible for the incentives listed below.
HISTORIC PRESERVATION INCENTIVES
The city offers a number of incentives designed to
encourage property owners to enhance and
preserve important historic resources.
Bed & Breakfast Establishments
Although most residential zones only allow
residential use of property, city code §21.04.046 &
§21.42.140 allow some historic resources in some
multi-family and mixed-use zones to operate a
business that accommodates overnight guests,
commonly referred to as a bed & breakfast.
Jan. 23, 2025 Item #2 8 of 15
IB-161_Historic Preservation Page 3 of 7
The specific zones that offer this incentive are
Multiple-Family Residential (R-3), Residential
Density-Multiple (RD-M), Residential Professional (R-
P), Residential Tourist (R-T) and Commercial Tourist
(C-T).
A discretionary permit (specifically, a Conditional
Use Permit, or CUP) is required, which may require
conditions be added by the city to ensure
compatibility with surrounding properties. For more
information on the city’s discretionary permit review
process, please see the Community Development
Department Permit & Service Delivery Guide.
State Historical Building Code
This alternative building code seeks to preserve
historic buildings by providing equivalent life safety
standards for repairs, alterations, and additions to
historic buildings.
The equivalent measures permitted by the code are
more sensitive to the historic conditions of a
building than standard building codes and allow
flexibility (often resulting in cost savings) in meeting
building code requirements for restored and
rehabilitated structures. The City of Carlsbad has
adopted the State Historical Building Code in the
city’s code (Chapter 18.08). General information
about the State Historical Building Code may also be
found at the California Office of Historic
Preservation’s website.
Federal Tax Credits
The Federal Historic Preservation Tax Incentives
program, and the 20% Rehabilitation Tax Credit,
may be available for buildings that are listed
landmarks in the National Register of Historic Places,
or that contribute to National Register Historic
Districts or certain local historic districts.
To qualify, properties must be income-producing
(i.e., commercial, industrial, agricultural, or rental
residential purposes, but not properties used
exclusively as the owner’s private residence) and
substantially rehabilitated according to the
Secretary of the Interior’s Standards for
Rehabilitation.
The historic building, the rehabilitation project
plans, and the completed project must all be
certified by the Secretary of the Interior. The
program is jointly administered by the National Park
Service and the Internal Revenue Service in
partnership with the State Historic Preservation
Office. More information about the Federal 20%
Rehabilitation Tax Credit may be found at the
California Office of Historic Preservation’s website.
THE MILLS ACT
The Mills Act is often recognized in the state as
probably the single most important economic
incentive program offered to private property
owners for the restoration and preservation of
historic buildings, which is why this section provides
more attention to this city incentive.
Mills Act Origins
In 1971, the City of Coronado was pursuing a rezone
of the Hotel Del Coronado, which would have had
significant property tax implications if approved. In
response, State Senator James Mills from San Diego
Jan. 23, 2025 Item #2 9 of 15
Page 4 of 7 IB-161_Historic Preservation
introduced in 1976 the Mills Act legislation, which
established an economic incentive program that
allows local jurisdictions to enter into contracts with
property owners who agree to preserve, restore,
and maintain their historic property in exchange for
a potential reduction in local property taxes.
Since its adoption, local Mills Act programs have
helped preserve thousands of historic structures
throughout California. The program’s regulatory
authority is described under state Government Code
(§50280-50290) as well as the Revenue and Taxation
Code (§439-439.4).
Program Eligibility
The city’s historic preservation code (Chapter 22.10)
establishes a voluntary program that incentivizes
owners to preserve their historic structures by
providing potential fiscal benefits and relief from
certain development standards and taxes. To
qualify, the owner of the historic resource must
agree to participate in the program, and the historic
resource being considered must meet certain
requirements, as summarized below.
Carlsbad Mills Act Program – Highlights
In 2022, the city established a voluntary Mills Act
program (Chapter 22.10). Application processing
steps for a Mills Act contract are provided later in
this info-bulletin, but some important program
highlights are provided below.
• According to the County Tax Assessor’s website,
properties under a Mills Act contract can
experience a reduction in property taxes for
most owners of between 40% and 60%
compared to what the property tax would be
without the Mills Act.
• The city and the property owner enter into a
Mills Act contract that is recorded on the
property’s title.
• Contract term is for 10 years that automatically
renews each year. Either party can file a notice
not to renew the contract after 10 years.
Financial penalties are imposed for a breach of
the contract, including a state-mandated
penalty fee of 12.5% of the full market value at
the time of cancellation.
• Only privately-owned properties that meet
the definition of a “Qualified Historical
Property” (§22.02.040) are eligible to apply
for a Mills Act contract.
• Following submittal, the property will be
assessed by the city to confirm historic
significance and determine if any alterations are
in compliance with the Secretary of the
Interior’s Standards for the Treatment of
Historic Properties, in particular the Standards
and Guidelines for Preservation, Restoration &
Rehabilitation.
• The contract includes a work plan describing the
improvements or modifications required, if any,
for preserving, restoring, and maintaining the
historic property during the term of the
contract. Failure to timely complete the work
plan may result in cancellation of the contract.
• Improvements to the historic property under
the work plan must follow the aforementioned
Secretary of the Interior’s Standards.
• While under contact, the property owner may
build an addition to their property, so long as it
complies with the Secretary of the Interior’s
Standards for the Treatment of Historic
Properties with Guidelines for Rehabilitation. It
should be noted that the new construction
Jan. 23, 2025 Item #2 10 of 15
IB-161_Historic Preservation Page 5 of 7
receives no property tax reduction. Please
contact the County Assessor's office for
information.
• The deadline for owners to apply for a Contract
is June 1. This deadline has been set to ensure
that contract applications can be approved,
executed, and recorded before the County Tax
Assessor’s lien date (December 31).
• State law requires the city to inspect the
property before the contract is approved and
recorded, and every five years afterward to
ensure contract requirements are being met.
Pre-Application Meeting
Owners interested in pursuing a Mills Act contract
must first contact the Planning Division to schedule
a meeting to go over program and application
requirements. This mandatory meeting must occur
before a contract application can be submitted.
Approved Mills Act contracts must be recorded by
the end of the year in order for the property tax
reductions to take place the next tax year. As such,
it is recommended that the pre-application meeting
occur within January through March of each year.
Refer to the calendar located on the next page for a
listing of critical deliverable dates.
Please note that the City of Carlsbad does not have
any role in the eventual valuation of the property
under a Mills Act contract. The County Tax
Assessor’s office is solely responsible for valuations
to determine property tax bills. Property owners are
encouraged to contact the County Tax Assessor’s
office regarding potential savings under the Mills Act
as well as their tax professional prior to filing their
application with city.
Application Submittal
The following is a summary of the submittal
requirements required to request a Mills Act
contract. All required forms and supplemental
requirements need to be submitted by the June 1
deadline before the city will begin processing the
Mills Act contract application.
Failure to supply timely sufficient information during
the processing of the Mills Act contract application is
reasonable grounds for processing delays or the
withdrawal or disapproval of the application.
• Land Use Review Application (P-1)
• Historic Preservation Permit Application (P-40)
• Mills Act Supplemental Checklist (P-40(a))
• Verification of historical status from the
National Register, California Register or city
Register. If not available, a historical report
prepared by a qualified professional for a
concurrent city historic designation request. A
qualified professional is someone who meets
one or more of the applicable “Secretary of the
Interior’s Historic Preservation Professional
Qualification Standards” to the satisfaction of
the City Planner.
• A proposed 10-year work plan report, which
details the preservation, maintenance, repair,
restoration, and rehabilitation improvements
the owner anticipates completing within the
first 10 years of the contract. The work plan
shall either be prepared by, or submitted with a
statement of concurrence provided by, a
qualified professional as referenced in the
preceding bullet.
Jan. 23, 2025 Item #2 11 of 15
Page 6 of 7 IB-161_Historic Preservation
• Copy of Title Report, which must be current
within the six months prior to application
submittal. If the property has changed
ownership within those six months, it must be
supplemented by a copy of the current deed.
Please note that historical reports and work plans
can take time to prepare. It is strongly suggested
that owners begin the process of hiring these
professionals during the year before you intend to
apply for the Mills Act.
Critical Dates Calendar
Below is an overview of the critical dates that must
be met in order to timely process a Mills Act contract
application.
Application Review Process
The following are processing steps the city will likely
take during its review of a Mills Act application and
supporting documentation.
• During review, the city may approximate the
amount of reduced property taxes. This is only
used to estimate the potential impact on city
revenues. Actual tax savings will be determined
by the County Tax Assessor.
• A site inspection will be conducted to assess the
physical condition and historic condition, known
as “integrity.”
• Once deemed complete, the application will be
scheduled for review by the Historic
Preservation Commission (typically in
September) followed by a final decision by the
City Council (typically in November).
• Once City Council approves the contract, the
city will execute and forward it to the county for
recordation within 20 days after approval.
Recordation must occur by December 31 in
order for the contract to take effect in the next
full property tax year.
• Once recorded, the city will notify the property
owner, the County Tax Assessor, and the State
Office of Historic Preservation.
• If all deadlines are met, the property owner will
see any property tax reduction in the next full
property tax year. Questions about the property
tax bill and valuation should be directed to the
County Tax Assessor’s office at (619) 531-5002.
Jan. 23, 2025 Item #2 12 of 15
Latest date pre-app lication request
accepted by city
Latest date M ills Act Cont ract
applicatio n accepted by city
Latest date M ills Act Contract
applicatio n d eemed complete by
city
Historiic Prese rvat io n Commission
makes re,commendat ion o n
applicatio n
City Council decides on the Mills
Act Contract
Mills Act Cont ract recorded with
Ass,essor's Offioe for tax ro ll change
IB-161_Historic Preservation Page 7 of 7
Contract Monitoring
After the Contract is recorded, state law requires
the city to monitor the owner’s compliance through
inspections. The owner will need to provide a signed
affidavit to the city prior to each inspection stating
the owner is complying with the terms of the
contract and written consent authorizing city staff
or designated third party to enter the premises.
Inspections occur every five years during the life of
the contract. The purpose is to verify that the
property owner is maintaining their building per
historic standards and is making progress on the
contract’s work plan in a timely manner.
Contract Nonrenewal or Cancellation
Every year on the anniversary date, a Contract is
automatically renewed for another year. This means
the Contract has a rolling, or perpetual, 10-year
term. However, state law provides two ways to end
a Mills Act Contract term.
•The first way is that either party to the contract
(city or owner) may file a “notice of
nonrenewal,” which is recorded with the county
and signals the tax assessor to value the
property that gradually increases the property
valuation while the years left decrease for the
remainder of the contract.
•The second way is for a local government to
cancel the contract. Cancellation could be
because of an owner’s breach of the contract
terms such as not maintaining and repairing the
property or making inappropriate alterations to
the property that do not follow required
guidelines.
Such a cancellation would follow due process
through a public hearing, but the city would
typically pursue administrative and legal remedies
to try to obtain the owner’s compliance before
cancelling the contract.
Cancellation could also be the result of an owner’s
request to cancel the contract, typically for reasons
of site development.
Unlike nonrenewal, cancellation is immediate and
state law requires the owner to pay a penalty fee
of 12.5% of the property’s full market value at the
time of cancellation.
YOUR OPTIONS FOR SERVICE
To schedule an appointment or to learn more about
the Mills Act Contract process, please contact the
Planning Division at (442) 339-2610 or via email at
Planning@carlsbadca.gov.
Jan. 23, 2025 Item #2 13 of 15
EXHIBIT 3 – COST RECOVERY SURVEY
Agency (in Region) Contract Register Inspection Self-Certification
Coronado $116 $1,061 --- N/A
Chula Vista $8,725 $4,800 --- N/A
Encinitas *unknown – removed from agency master fee schedule.
Escondido $2,640 $2,320 --- N/A
La Mesa $2,746 $704 --- N/A
National City $2,265 $1,600 --- N/A
San Diego (city) $1,305 $3,366 $870 N/A
San Diego (county) $1,575 --- --- N/A
Agency (out of Region)* Contract Register Inspection Self-Certification
Arcata $1,867 --- --- N/A
Benecia $6,063 --- $376 N/A
Berkeley $4,675 $105 $2,750 N/A
Calabasas $1,535 --- --- N/A
Chico $2,510 --- --- N/A
Claremont $2,500 $726 $294 N/A
County of Ventura $610 --- $552 $137
Dana Point --- --- --- N/A
Fresno $1,448 --- --- N/A
Glendale $2,826 --- --- N/A
Huntington Beach $607 --- $212 N/A
Los Altos $6,579 $4,275 --- N/A
Laguna Beach $3,201 $1,503 --- N/A
Monrovia $1,100 $600 --- N/A
Palm Springs $1,355 --- --- N/A
Oxnard $1,575 --- $341 N/A
Rancho Cucamonga --- --- --- N/A
Redondo Beach --- --- --- N/A
San Mateo $4,000 --- --- N/A
*random selection
Exhibit 3
Jan. 23, 2025 Item #2 14 of 15
Item 2:
Mills Act Program Implementation
Review
Feedback
Jan. 23, 2025 Item #2 15 of 15