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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 (i) . - p 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