HomeMy WebLinkAbout2024-05-13; Historic Preservation Commission; ; Additional Historic Preservation Benefits and Incentives Meeting Date: May 13, 2024
To: Historic Preservation Commission
From: Mike Strong, Assistant Director of Community Development
Staff Contact: Mike Strong, Assistant Director of Community Development
Mike.strong@carlsbadca.gov, 442-339-2721
Subject: Additional Historic Preservation Benefits and Incentives
Recommended Action
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Executive Summary
Historic preservation can solidify a community's past and can help strengthen a community's
future. At its Jan. 8, 2024, meeting, the Historic Preservation Commission adopted a work
program to work through and evaluate incentives and benefits to historic preservation. On
March 11, 2024, the Historic Preservation Commission reviewed ways to expand the use of a
historic property to allow more home-based businesses; and to provide development standard
flexibility. The agenda of the May 13, 2024 meeting is devoted to potential façade
improvement easements and official recognition and awards. The study session is scheduled to
conclude on July 8, 2024.
Discussion
The City Council approved a local Mills Act program on Nov. 3, 2022, when it approved various
amendments to the city’s historical preservation ordinance (Ordinance No. CS-438, which
amended Carlsbad Municipal Code Title 22). California’s Mills Act provides cities with a
mechanism to encourage the preservation of their historic buildings. It allows the city to give
owners of qualified historic properties who actively participate in the restoration and
maintenance of their properties a reduction in their property tax. During the course of
developing the ordinance, the Historic Preservation Commission also recommended that the City
Council direct staff to further investigate additional benefits and incentives, including: 1)
expanded home based businesses, 2) development standard flexibility, 3) façade improvement
easements, and 4) official recognition and awards.
The study session format will provide the Historic Preservation Commission with an opportunity
to learn more about the benefits and incentives, hear from various residents and stakeholders,
and to discuss preliminary issues/concerns. Furthermore, study sessions in advance of a final
recommendation will allow the Historic Preservation Commission to methodically work through
benefits and incentives.
HISTORIC PRESERVATION COMMISSION
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Staff Report
As mentioned in previous meetings with the Historic Preservation Commission relative to the
study sessions, attachments to the staff reports will be used for the basis of the discussion and
will be provided to facilitate each meeting. The first meeting helped establish the study session
scope and format. This second meeting on March 11, 2024 introduced ways to explore
expanding home-based businesses in historic homes; and adding development standard
flexibility to encourage historic preservation. The May meeting is devoted to the evaluation of
façade improvement easement programs, and official recognition and awards to help support
local historic preservation efforts.
At the conclusion of the work program, city staff will present the recommendations to the City
Council and seek authorization to initiate formal code amendments or policy changes. 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.
Fiscal Analysis
There is no direct fiscal impact associated with receiving this informational report.
Environmental Evaluation (CEQA)
The action before the Historic Preservation Commission is to review potential historic
preservation benefits and incentives and to provide feedback that may be considered formally
at a separate meeting date. Any direction received shall be construed as general direction and
does not have a legally binding effect on any possible future discretionary action. Pursuant to
Public Resources Code Section 21065, this action does not constitute a “project” within the
meaning of the California Environmental Quality Act (CEQA) in that it has no potential to cause
either a direct physical change in the environment, or a reasonably foreseeable indirect physical
change in the environment, and therefore does not require environmental review.
Exhibits
1. Historic Preservation Commission Study Session Material
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Exhibit 1
Historic Preservation Commission Study Session Material
Research on façade improvement easements and official recognition and awards
Sometimes, efforts to preserve and revitalize historic buildings run up against financial
obstacles that create challenges. There are several incentives available which can make
preservation more economically feasible. Financial incentives can provide income and property
tax reductions. Other construction-based incentives offer additional flexibility in meeting
building code requirements, which can make potential projects significantly more affordable.
Another option is providing recognition or rewards to encourage the maintenance and
restoration of historic resources. Below is a brief summary of the major incentives that will be
discussed at the May 13, 2024 Historic Preservation Commission meeting.
•Façade improvement easements: A “preservation” or “facade” easement is a legal
agreement in which a property owner formally conveys the right to control the exterior
of a property to a qualified organization. This type of easement is commonly required to
receive grant funding or financial assistance from state or local governments or
nonprofit organizations. Local conservancy groups often ensure preservation of the
character of the land via property maintenance and inspections. Easements are usually
donated by landowners although they can also be purchased by easement holding
entities. Once in place, most easements are perpetual and bind both current and
future owners. From that time on, the organization monitors the parts of the property
governed by the easement agreement and has the legal ability to require that changes
conform. For the owner, the donation of an easement can result in a financial incentive
in the form of a charitable tax deduction.
•Official recognition and awards: A city may recognize and honors outstanding efforts
and achievements by local preservation, including inspirational projects, individuals,
and organizations that demonstrate excellence in the field of preservation.
1)Façade Improvement Easement Program
Easements are flexible tools and can be crafted to address the specific characteristics of a
property, the property owner's interests, and the mission, goals, and interests of the
easement-holding organization. The term "preserva�on easement" is commonly used to
describe a type of conserva�on easement—that is, a private, legal arrangement between a
property owner and a qualified nonprofit organiza�on or governmental agency for the purpose
of protec�ng a historic property's conserva�on and preserva�on values. Preserva�on
easements may also be referred to as "preserva�on covenants" or "preserva�on restric�ons"
and the terms are o�en used interchangeably. Conserva�on easements have long been used to
protect land that has open space (including farmland, forest land, and land with scenic value),
natural environmental value (including natural habitat), outdoor recrea�onal value, or land that
has historic, architectural, or archaeological significance. The term “facade easement” is o�en
used to describe a type of preserva�on easement that only protects the exterior eleva�ons (the
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"facade") of a historic building (and o�en, only those eleva�ons that are visible from public
ways). Typically, a "facade easement" refers to an easement placed on a property, such as a row
house, in a more densely built urban environment. Exterior easements on proper�es in more
rural se�ngs o�en cover not only the exterior "facades" (that is, all eleva�ons) of a historic
building but also cover the land surrounding the building, some�mes referred to as the
building’s “context.”
Preserva�on easements currently preserve thousands of historic proper�es across the United
States. Resources range from single-family dwellings to complexes of buildings and na�onally
significant historic landmarks. Local land conservancy groups or city governments offer this both
for historic buildings and open plots of land. Preserva�on easements are generally donated to
(and then subsequently referred to as "held by") either governmental agencies (such as the
State Historic Preserva�on Office or a city through its local historic preserva�on commission) or
by a nonprofit organiza�on with a mission focused on historic preserva�on and/or land
conserva�on (Na�onal Trust for Historic Preserva�on, California Preserva�on Founda�on, etc.).
By having a qualified organiza�on, such as the Na�onal Trust for Historic Preserva�on or
California Preserva�on Founda�on, hold an easement on a building, the property owner agrees
that their property is worthy of protec�on and agrees to work in partnership with the qualified
organiza�on over �me to maintain the integrity of their building. For the landowner, a
conserva�on easement offers means to protect the special at ributes of a property without
relinquishing the ownership and enjoyment of the land. The landowner gains the sa�sfac�on of
knowing that their land will be protected from demoli�on or insensi�ve altera�on, even by
future owners of the space. For the qualified organiza�on, the purpose of the façade
improvement easements is twofold: 1) to assure that the significant exterior features, finishes
and structural soundness of significant historic buildings will be retained and maintained
substan�ally in their current condi�on so that their historic and architectural integrity is not
lost; and (2) to prevent any use or change of the building that will significantly compromise their
integrity.
Some easements last for a certain number of years (often referred to as "term" easements),
with the interests of the easement-holding organization expiring at the end of the term. Most
preservation easements, however, are perpetual (that is, permanent), including any easements
for which a donor plans to seek a federal income tax deduction. In many cases, the National
Trust for Historic Preservation or California Preservation Foundation work to protect historic
properties that are not under the purview of local historic preservation laws and may be
the only protection against demolition or alteration of a property’s significant historic
resources.
Preservation easements typically identify:
1) the physical features of the property that will be preserved;
2) activities that could damage or destroy significant historic or architectural
features and thus are prohibited;
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3) activities that are permitted subject to the approval of the easement-holding
organization;
4) activities that are permitted by the owner as a matter-of-right (with no oversight
or involvement of the easement holder);
5) maintenance obligations that a property owner must undertake; and
6) requirements for maintaining property insurance, providing limited public access
to the property, and steps the easement holder can take to enforce the
easement.
Preservation easements are as varied as the properties they protect. Preservation easements
can be granted on properties already subject to local historic preservation laws if the local
preservation law is weak and the preservation easement is strong, the easement may provide
more protection than the local law. At a minimum, most preservation easements protect the
exterior character-defining features of historic buildings; many also preserve the historic setting
of the protected buildings, sometimes including natural as well as designed landscape features.
Preservation easements can also protect interior features of historic buildings. Finally,
preservation easements can also control (or, in some instances, prohibit) additions to existing
buildings or the construction of new buildings and structures on the property.
There are hundreds of organizations and governmental agencies across the country that accept
and administer preservation easements. Most easement holders are based at the local level;
however, state, regional and national organizations hold preservation easements as well. Most
easement-holding organizations request that the donation of a preservation easement be
accompanied by a one-time financial donation to the easement-holding organization. In order
for an easement donor to qualify for federal tax benefits, the organization to which they donate
a preservation easement must have the preservation of historic places as a primary part of its
mission; and the resources to monitor and enforce its easements. Many easement-holding
organizations set aside easement endowments or stewardship funds to ensure that the
organization has a long-term designated funding source for its easement obligations. Property
owners donating "qualified" conservation or preservation easements to a "qualified" easement-
holding organization, under the regulations set forth in 170(h) of the Internal Revenue Code,
may be eligible for a federal income tax deduction. However, if the façade was already subject
to restrictions under local zoning ordinances, the taxpayers may, in fact, be giving up nothing,
or very little. A taxpayer cannot give up a right that he or she does not have. The complexities
of the federal tax code and the applicable IRS regulations are beyond the scope of this
summary.
2) Official Recognition and Awards
The concept of rewarding someone for a job well done is not a new one. Rewards and
recogni�on is the appropriate acknowledgement, apprecia�on and incen�viza�on of an effort
in the field of preservation. Some of the exis�ng more notable programs are listed below.
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1) The National Trust for Historic Preservation: National awards are presented
annually, to honor inspirational projects, individuals, and organizations that
have demonstrated excellence in the field of preservation. The efforts that
are recognized generally include citizen attempts to save or retrofit
important landmarks; companies and craftsmen whose work restores the
richness of the past using modern techniques; the vision of public officials
who support preservation projects and legislation in their communities;
and educators and journalists who help Americans understand the
economic, environmental, and educational value of preservation.
The Louise du Pont Crowninshield Award is the National Trust for Historic
Preservation’s highest recognition. Named for one of the National Trust's
founding trustees, the award honors excellence in the preservation and
interpretation of our historic, architectural, or maritime heritage.
2) Secretary of Interior: The National Historic Preservation Act (NHPA) Section
110(h) of the National Historic Preservation Act (54 U.S.C. 306110) establishes
the Secretary of the Interior annual award program to recognize outstanding
contributions in historic preservation. The Secretary's award is distinguished
from other historic preservation award programs because it is statutorily
mandated as a cabinet-level recognition. It focuses on the accomplishments of
individual employees whose work enhanced and/or improved historic
preservation in their agency, state, tribal, or local government. The Secretary
may present up to four awards annually, one for each level of government
participating in the national preservation partnership program (federal, state,
tribal, and local).
3) California: The Governor's Historic Preservation Awards is California's only state-
sponsored awards program and seeks to recognize community-centered, often
grass-roots efforts going on throughout California to preserve our collective
heritage. The awards are presented annually under the sponsorship of the
California Office of Historic Preservation (OHP) and California State Parks to
projects, individuals, and organizations whose contributions demonstrate
outstanding achievements in historic preservation. Nominees can include,
among others, resource restoration and preservation; civic efforts to preserve,
interpret, and educate about community history; and companies and public
agencies that have exceeded expectations and contractual obligations in
preserving the heritage of the state.
4) Local agencies: Many cities in California offer awards to celebrate and support
community building an history of communities. In general, the purpose of the
awards programs is to increase public awareness of the city’s heritage by
recognizing individuals, organizations, businesses, and preservation projects
whose contributions demonstrate some level of commitment to historic
preservation or local history. Most of the award programs are administered by
the legislative body, commissions or advisory boards, or historic preservation
advocacy groups. A few examples are provided below.
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• Davis - Historic Preservation | City of Davis, CA
• Los Altos - Los Altos Historic Preservation Award | City of Los Altos California
• Pasadena - 2023 Historic Preservation Awards Recipients - Planning &
Community Development Department (cityofpasadena.net)
• Pomona - Preserve Pomona Awards for Historic Preservation | Pomona, CA
(pomonaca.gov)
• Richmond - Historic Preservation Awards | Richmond, CA - Official Website
• Santa Ana - Historic Preservation - City of Santa Ana (santa-ana.org)
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