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• The property is designated or is eligible for designation on a federal or state historic register.

Additionally, a clearly defined neighborhood that represents one or more historic architectural styles can be designated as a historical site.

Subsidy for Wealthy Homeowners? Or Economic Engine?

Preservationists believe that the reason the City has proposed limiting the program is because it has been so successful. San Diego has more Mills Act agreements than any other city in the state — 822 out of a statewide total of approximately 2500. Critics label the program a subsidy for wealthy homeowners, bestowed at the expense of the city’s crumbling infrastructure and impoverished schools. Preservationists point out that it’s an expensive and time-consuming process to apply for a Mills Act contract, taking two to three years, and that historic houses create economic multipliers that raise surrounding property values and support a skilled industry — the very things politicians promise to do when running for office.

As the primary election approaches, residents of the city’s historic districts and the industry they support have begun to make Mayor Jerry Sanders aware of their contributions to the local economy.

Immediately following the release of the grand jury report, Sanders repeated his call for Mills Act reforms, but he ignored the report’s recommendation to temporarily end the program. Instead he’s called for a series of public workshops beginning Friday, April 18.

His opponent Steve Francis was quick to respond to the mayor’s announcement, saying he opposes Sanders’s proposal to limit the number of contracts and to change the eligibility requirements, which could potentially halt the program.

“One of the things that they have said is by doing away with this program, it’s going to save over $4 million. It’s really not,” Francis says. “That’s all the entities — the state, the county, and all municipalities. In San Diego, you’re only talking about $600,000. I don’t believe that we should be changing these laws to make it more difficult to preserve our heritage for $600,000.”

According to the figures that the Tax Assessor’s Office provided to the grand jury, the City loses $607,571 annually in property taxes due to the Mills Act.

Representatives for Sanders’s campaign did not comment.

Given the City’s long list of problems, Francis says he doubts that the Mills Act will be a campaign issue.

Ron May, president of Legacy 106, says the candidates’ positions on this issue will influence how historic homeowners vote. Legacy 106 specializes in restoration projects and environmental services that include historic research, archaeology, and land-use issues.

“The mayor might be paying the price at the next election,” May says, “if 800 families suddenly lose their Mills Act contracts. It’s something Sanders should be considering before the election and probably why he didn’t terminate the program.”

Realtor Elizabeth Courtiér, who specializes in historic properties, says that while the tax break is an incentive, homeowners will tell you that the savings isn’t their motivation for preserving San Diego’s pre–World War II housing stock. Besides, she says, the tax savings don’t come close to covering the expenses of restoring and maintaining a 100-year-old house.

Courtiér owns Page Manor, a prairie-style home in Point Loma built by Walter Keller in 1904. Walter Page, the original owner, was connected to the Theosophical Institute, located in the wooded area that is now Point Loma Nazarene University.

The main motivation to preserve a building, Courtiér says, is a love of architecture, of history, and of living in a community that has character.

Courtiér says critics of the Mills Act program generally fail to realize that before the Historical Resources Board will even consider giving a house historic designation, the majority of the applicants spend tens of thousands of dollars, if not hundreds of thousands, hiring craftsmen, master carpenters, and specialists to strip layers of paint and stucco, restore roofs, and replace modern window fames with vintage-style wooden ones.

The work, along with the home’s history, must be documented in a designation report for the City. A property owner with free time could prepare the report himself, but many choose to hire a consultant, such as Ron May, at a cost of around $3000.

“The [historical designation] system was based on the way things were done in 1965, and it holds a really high standard of how pristine a building is in relation to how it was built originally,” May says. “It’s a very high standard for an individual house. You have to produce old photographs or have an expert crawl around the building and determine whether the stucco, wood covering, or windows are original. Those are professional judgments, and it takes a long time to do it.

“Then the City also wants the original building permits, original water and sewer permits, old fire maps showing the footprint of the building, the chain of title. You go through the old telephone directories looking for all the people who lived there. Then you take those names and run them against genealogical information to build a personality profile to try to determine whether those people were important in the community or not.

“It takes a long time to do that, and the City wants all of that information and often will send you back to do more if they don’t think you have enough.”

Former Historical Resources Board member and architect Ione Stiegler says that labeling the Mills Act as a property tax break for the wealthy is misleading.

“It is really a tax break for reinvestment for the community, acknowledging that older homes cost more to maintain and to maintain correctly,” Stiegler says. “You can’t just go down to Home Depot and find the part you need. You can’t just call any handyman, because they all don’t know how to reset a historic sashway so your windows will function properly. You have to hire craftsmen who cost more to work on it properly.”

Stiegler served on the Historical Resources Board the maximum term of eight years, under three mayors. She was on the board in 1995, when the city approved the Mills Act. She and other boardmembers had lobbied the council to adopt it, having grown concerned that some of San Diego’s earliest remaining homes were falling into disrepair or being bought by speculators, who had no qualms about demolishing them and building 10,000-square-foot houses in neighborhoods filled with small bungalows.

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Comments

Louise_Torio April 16, 2008 @ 4:56 p.m.

Great article, but one correction: my husband and I put in $80,000 into restoring the Crellin Cottage, not $8,000. This $80,000 better illustrates how a small Mills Act incentive produces an important, positive ripple effect of reinvestment in older neighborhoods. We hired local trades people and craftsmen. The local economy benefited. This reinvestment ripple to the City of San Diego has not been studied, but I guarantee you that the benefit to the City is vastly larger than the cost of the incentive.

As a Mills Act advocate who has spoken to historic homeowners around the state about the benefits of the Mills Act, I know that San Diego is viewed as a model of SUCCESS regarding use of the Mills Act to preserve and restore historic buildings, and thus restore older communities. How wrong for the City to view this success as a problem. If you are concerned, please join us on April 18 at 2:00 at 202 C Street for the mayor's "workshop" on the Mills Act. This is a "penny wise but pound foolish" attack on an incentive program that works well, at minimal cost to the City.

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Scoop April 16, 2008 @ 7:56 p.m.

Hooray for your article! San Diego needs to cherish and protect the limited historical homes still left in this sprawling and increasingly homogenous metropolis. Phoenix and LA have their charms and far too many blemishes to even want to compare. San Diego has many unique, historic urban neighborhoods that need to be preserved. Check out what is happening nationally with historic homes and neighborhoods. The National Trust for Historic Preservation is working to fight the "McMansionization" of historic neighborhoods in many communities, where historically significant homes are being torn down to make way for homes that are out of character for the neighborhoods. The measure of historicity should be broad enough to maintain the look and feel of older neighborhoods that began as working or middle-class enclaves as well. This should be broad enough to maintain the character of our older neighborhoods, from Mission Hills to Sherman Heights. This is where San Diego actually is doing the right thing, but maybe the city could be doing it better administratively. Improve the system, don't destroy the support and incentives to keep the small percentage of older San Diego homes and neighbhorhoods intact for future generations.

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Arkangel_007 April 17, 2008 @ 9:15 a.m.

Being a student of real estate and economics, I do not believe that the position of this article is truthful in asserting that the preservation of historic properties is in the best interest of the public in terms of tax revenues or stimulation of the local economy. The study presented from the University of San Diego in truth considers only comparable properties if it is to give any valid results whatsoever. In practice, bringing a property to its highest and best use in the face of changing conditions on the ground in the properties area will always bring 1.) the highest ammount in tax revenues for the city as the property will achieve its highest fair market value after achieving its highest and best use. 2.) the highest ammount of profit for a property owner and his or her contractors if after achieving this highest and best use the costs of converting the property does not out weight the net present value of the property given a certain holding period.

What does this mean in english? It means that you can't compare apples and oranges. If you redevelope a property and it costs 300,000 dollars to do that is more economic stimulus than 80,000 to renovate a standing structure. That probably also means that you will be paying more in property taxes because newer larger homes with modern amenities and updated construction mean a higher selling price which means more in tax revenue for the city.

In truth, historical preservation is a decision based on societal mores, norms and values. Arguments for historical preservation usually carry no weight in financial terms whatsoever.

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Erik April 17, 2008 @ 11:46 a.m.

Arkangel: as a "student" of economics you should defer to the professors of economics until you can present a more cogent paper than they do. You clearly didn't read or didn't understand the report. Nobody is saying that tearing down a single family house and building apartments or a huge spec won't make money for the owner and builder. What is being stated is that not doing so adds value to every property in the blocks nearby. Just as building a maximum sized new building will devalue all the properties nearby that wish to keep their properties as single family homes and not as accounts to cash out. Take a spin, for example, down 35th Street South of Adams. Would you want to live in one of the few remaining single family homes next to the "higher and better" ones? After more than one or two houses on a block are scraped and maxed-out the properties on the block will never be restored, ruining everybody's experience. As odd as it may sound to the capitalist in you, many people buy houses because they think its a nice place to live the rest of their lives and raise their children, perhaps passing the home down to the kids. Not every one does the math about what an empty lot will fetch, and those who do can't be allowed to do a "taking" of usage from those who don't. Ray Huffman is dead, get over it.

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historymatters April 17, 2008 @ 1:53 p.m.

Arkangel, I assume that you are from the same line of thinking that thought the subprime mortgage idea was a good one. Your thinking is an epidemic that has created the current economic mess and continues to be self destructive. It is thinking that is VERY short-sighted, that only considers immediate economic gains and doesnt examine the long term economic impact or the quality of life impact that you are having on those around you. Do you think San Francisco would be in better financial shape if they had allowed developers to scrape all their victorians and build the lackluster 4-packs that litter our neighborhoods, how about Portland Oregon, or New York City. In fact why dont we let them scrape Balboa Park so we can enjoy the economic benefits. Look, Ark, you have alot more reading to do. Hit the books!

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onamission April 17, 2008 @ 11:40 p.m.

Preservationist thinkers are an extremist few who base their philosophy on the emotional rhetoric of days gone by. The concept of proving private owners with a monetary incentive to preserve the original integrity of their property is borderline insane. As soon as you improve any property is starts to deteriorate. There is no way to keep anything unchanged. We should be mature enough to accept these changes for the better. Nor should we try to stop or hold back technological or social improvements. New developments in construction, energy, utilization of space and safety will undoubtedly require the removal and construction of better and smatter properties. Private properties need to be larger than the old 900 square feet cottages being designated as historical. Communities today shouldn’t have to move to the suburbs to raise a family. We can plan and zone better to ensure development is not detrimental to our economic or social growth. Redevelopment can be great if it is done in phases based on the current and future needs of our society. Preserving the historical facades of private properties has no merit in the true economic and social values of our future. People should realize that properties as young as 35 years are being considered historical. Don’t be fooled, this article is a slanderous attack against the city’s attempt to improve its tax revenues at the cost of our most affluent citizens, who have found a loophole like the mills act to avoid paying property taxes. If this was a fair and equitable designation process we would have less affluent areas with the same amount of designated historical properties. In fact, most historically registered properties are in affluent areas. Mission Hills and Hillcrest have over 35 registered craftsman homes as historically designated, in addition to other types of designated properties. City Heights on the other hand, with its many craftsman homes has none and there is less than a handful in Logan. This article also fails to state that the city’s historical board could force private properties into permanent historical designation, rendering it un-approvable for mayor renovations. Once a property is historical it can never be undesignated or moved from its original site. The city has finally realized that its designation process is flawed and the old guard is trying to use this media to keep their job by influencing you. If organizations such as SOHO or other preservationist want to force private properties to look like something out of the 20’s, they should be offering to pay for it out of their organization’s checkbooks. And they should look into low income areas to help first. What ever happened to the property rights this country was formed on? If you don’t like this country’s capitalistic principles, I suggest you move to Cuba, there’s no problem with preserving history there. You could even drive around in a classic car.

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onamission April 17, 2008 @ 11:43 p.m.

Preservationist thinkers are an extremist few who base their philosophy on the emotional rhetoric of days gone by. The concept of providing private owners with a monetary incentive to preserve the original integrity of their property is borderline insane. As soon as you improve any property is starts to deteriorate. There is no way to keep anything unchanged. We should be mature enough to accept these changes for the better. Nor should we try to stop or hold back technological or social improvements. New developments in construction, energy, utilization of space and safety will undoubtedly require the removal and construction of better and smatter properties. Private properties need to be larger than the old 900 square feet cottages being designated as historical. Communities today shouldn’t have to move to the suburbs to raise a family. We can plan and zone better to ensure development is not detrimental to our economic or social growth. Redevelopment can be great if it is done in phases based on the current and future needs of our society. Preserving the historical facades of private properties has no merit in the true economic and social values of our future. People should realize that properties as young as 35 years are being considered historical. Don’t be fooled, this article is a slanderous attack against the city’s attempt to improve its tax revenues at the cost of our most affluent citizens, who have found a loophole like the mills act to avoid paying property taxes. If this was a fair and equitable designation process we would have less affluent areas with the same amount of designated historical properties. In fact, most historically registered properties are in affluent areas. Mission Hills and Hillcrest have over 35 registered craftsman homes as historically designated, in addition to other types of designated properties. City Heights on the other hand, with its many craftsman homes has none and there is less than a handful in Logan. This article also fails to state that the city’s historical board could force private properties into permanent historical designation, rendering it un-approvable for mayor renovations. Once a property is historical it can never be undesignated or moved from its original site. The city has finally realized that its designation process is flawed and the old guard is trying to use this media to keep their job by influencing you. If organizations such as SOHO or other preservationist want to force private properties to look like something out of the 20’s, they should be offering to pay for it out of their organization’s checkbooks. And they should look into low income areas to help first. What ever happened to the property rights this country was formed on? If you don’t like this country’s capitalistic principles, I suggest you move to Cuba, there’s no problem with preserving history there. You could even drive around in a classic car.

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Erik April 18, 2008 @ 9:14 a.m.

"New developments in construction, energy, utilization of space and safety will undoubtedly require the removal and construction of better and smatter (sic) properties."

A "green" building takes 65 years on average to mitigate the energy spent in the original construction of the building and the demo debris. And we know how you feel about 65 year old buildings.

"Private properties need to be larger than the old 900 square feet cottages being designated as historical."

Make up your mind, is it 900 sq.ft. cottages or the mansions of the rich that are being designated?

"Communities today shouldn’t have to move to the suburbs to raise a family"

What does this mean? You can't raise a family in, say Mission Hills?

"Preserving the historical facades of private properties has no merit in the true economic and social values of our future."

Just because you don't value it does not make it so. You could also make the argument that picking up litter is not use.

"People should realize that properties as young as 35 years are being considered historical"

Please name one here in town. I can hardly wait.

"most historically registered properties are in affluent areas"

That's because it costs 4 or 5K to have a report written and printed up. Poor poeple have other things to do, like work to eat. Besides (as if you didn't know this) poor people here tend to live in rental properties owned by wealthier people. Perhaps the city should subsidize historical reports.

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Erik April 18, 2008 @ 9:17 a.m.

"City Heights on the other hand, with its many craftsman homes has none and there is less than a handful in Logan."

If you have a property there you would like to have designated, I will support you all I can. My guess is you have no interest in having this done.

"Once a property is historical it can never be undesignated or moved from its original site."

This is an absolutly uniformed bit of nonsense. Please refrain from talking about things you know nothing about. We have (unfortunately) demolished or moved many designated properties. Even ones on the National Register. Ever been to Heritage Park in Old Town?

"If organizations such as SOHO or other preservationist want to force private properties to look like something out of the 20’s, they should be offering to pay for it out of their organization’s checkbooks."

It will happen.

"And they should look into low income areas to help first."

How do you know what SOHO looks into? Do you read their board minutes. Or is it just because you don't read about it in the La Jolla-owned U-T? The huge majority of historic designations are done with no preliminary input from SOHO.

"What ever happened to the property rights this country was formed on? If you don’t like this country’s capitalistic principles, I suggest you move to Cuba"

You need to get your story straight. Are you against poor people or rich ones? You are coming from both directions at once. Its beyond your primitive understanding that there are both poor and rich people in town that are preservationists. I'm guessing you have some sort of job that you vaguely think historic preservation will harm, because of your inability to adapt to the lack of open land to build on, and you are spinning in circles trying to appeal to both Ayn Rand and Bario Logan at the same time.

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onamission April 19, 2008 @ 6:50 p.m.

“A "green" building takes 65 years on average to mitigate the energy spent in the original construction of the building and the demo debris. And we know how you feel about 65 year old buildings.”

Its small minded to think of only the economic impacts of green building without looking into the impact of future generations. That’s right preservationist can see past 1920. And like everything on this article, you and the writer can’t do simple arithmetic.

“Make up your mind, is it 900 sq.ft. cottages or the mansions of the rich that are being designated?” I don’t mind designating a home if the owners choose to accept this designation. However no property, whatever size, should be subsides by not paying taxes. Get rid of the Mills Act, I’m sure your organization and its wealthy donors can afford to pay for property improvements.

“Just because you don't value it does not make it so. You could also make the argument that picking up litter is not use.” Just because a few prefer a select type of architectural styles, doesn’t mean they should have the right to impose others to build or keep it. If you like an architectural design, build it yourself on your own dime.

“That's because it costs 4 or 5K to have a report written and printed up. Poor poeple have other things to do, like work to eat. Besides (as if you didn't know this) poor people here tend to live in rental properties owned by wealthier people. Perhaps the city should subsidize historical reports.”

I’ve paid for these reports and they don’t cost half of what you mentioned. I suggest you go back to high school and learn math. You might learn to spell at the same time.

“If you have a property there you would like to have designated, I will support you all I can. My guess is you have no interest in having this done.”

If elitist white people like yourself weren’t scared of walking in these neighborhoods, you could ask someone if they would like $80,000 to fix their property. You might have some takers. I suggest you do your walk at night. You’ll find more folks home from work.

“You need to get your story straight. Are you against poor people or rich ones? You are coming from both directions at once. Its beyond your primitive understanding that there are both poor and rich people in town that are preservationists. I'm guessing you have some sort of job that you vaguely think historic preservation will harm, because of your inability to adapt to the lack of open land to build on, and you are spinning in circles trying to appeal to both Ayn Rand and Bario Logan at the same time.”

Unlike you, I have no special interest in this whatsoever. I’m not completely against anything or anyone unless it is immoral or physically harmful. You on the other hand, hate progress. If you tried to be more tolerant of different tastes, cultures and lifestyles, you might be mature enough to see different points of view.

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taxcollector April 19, 2008 @ 7:37 p.m.

I can't wait for the IRS to audit SOHO. As a 501 (c)3 they are not suppose to lobby government agencies, not even indirectly. This article was so one sided it can only be construed as such. Good luck trying to convince uncle same to keep your non profit status. In the future hire a real PR firm to do your dirty work.

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Sombadi April 21, 2008 @ 4:27 p.m.

In my neighborhood (Mission Hills) it is mainly people who have bought homes in the past few years who are interested in historical designation. If you think about the taxes you can understand why. It is a big deal if you bought a house for $1 million and you can drop your property tax from $12k to $3k. That's what people are doing.

People who have lived in the neighborhood for 10+ years already pay low property taxes thanks to Prop 13. They have little interest in historical designation.

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Erik April 21, 2008 @ 6 p.m.

Taxcollector: I'm not sure what any of this has to do with SOHO, most of the people quoted in the article are not speaking for SOHO, and are not on their staff or board. I think Bruce Coons is the only one. YES, a 501(c)3 group IS allowed to lobby a legislator. They are not allowed to support a candidate or subsidize them in any way. Non profits ARE allowed to support ballot propositions. Why you think that hiring a PR/Lobby firm would be any different from doing it in person is beyond me.

For example, I've never been to a City Council meeting without seeing Father Joe Carrol from St. Vincent de Paul there. The Building Industry Association (a nonprofit) is in mayor Sander's office frequently. The council and mayor receive visits from Senior Adult Services, the Zoo, The Old Globe, college presidents, The Nature Conservancy, etc.

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Erik April 21, 2008 @ 6:37 p.m.

"You on the other hand, hate progress. If you tried to be more tolerant of different tastes, cultures and lifestyles, you might be mature enough to see different points of view.

By onamission 6:50 p.m., Apr 19, 2008"

You don't know a thing about me, and your comments are both wildly speculative and dead wrong. If you know anyone else who was the only White man at an Indian sweat lodge and drove a 20 year old car to the antiquarian bookfair in LA the same weekend, just speak up. I'm happy to live in a diverse block, with a lesbian cardiologist on one side and a straight part-time pest control man on the other. I'm on a first name basis with homeless men and guys who own high rises downtown. I don't need you telling me about diverse cultures. And, yes I do walk at night in 92102. The fact is that EVERY historic building I've seen demolished has been replaced by something worse, and I challenge you to name one that has not. That's the biggest reason that I'm a preservationist. I'm in full support of good new work, and I'm friends with several architects who are doing it.

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Erik April 21, 2008 @ 8:04 p.m.

And also to Onamission: If "That’s right preservationist can see past 1920" is your idea of a complete sentence, if you spell "smarter" as "smatter" and if you can't control posting the same message twice, then please don't talk about who should "go back to high school."

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Arkangel_007 Aug. 16, 2008 @ 1:42 p.m.

A city block full of newer and greener homes provide...

1.)More in tax revenues 2.)A reduction in negative effects to the environment.

in comparison to a block of older homes tax sheltered by the mills act. Just some simple logic to consider.

By the way, there is a commercial development in downtown chula vista that is really nice. It used to be a bunch of dirty apartments and single family homes. I was glad to see that development. It brought new jobs and more revenues to the city of chula vista. This is progress and that is a good thing. Designated properties should be few and far between to highlight their uniqueness and exemplary nature of this country's past.

This is how I feel about this subject.

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