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Frequently Asked Questions About the Mill Act Program

During the 2014 Mills Act Workshop, participants submitted questions regarding all aspects of the Mills Act program. A three-person panel, consisting of Robert Chattel, Lambert Giessinger and Patricia Johnson-Connor, convened to discuss and answer the questions. Only about 15 questions were able to be answered at the workshop and there were 57 submitted. Since the purpose of the workshop was to disseminate as much information as possible, each question was transcribed, submitted to the panel after the workshop and given an answer. The following spreadsheet lists all the questions submitted during the workshop and answers to the questions provided by the panel. 


1What is the appeals process?Staff denial of an application can be appealed to the Cultural Heritage Commission.  The appeal fee is $473.  Applicants will be notified, as soon as possible, following the application submittal or pre-contract inspection if an application is being denied.  The appeal fee would have to be paid prior to scheduling the Cultural Heritage Commission hearing.  Commission approval of staff recommended denials are final.  Commission denials of valuation exemption cases are not appealable; however, reapplication is possible in a subsequent year.  
2Will I be refunded if denied?Application fees are non-refundable.  Contract Execution Fee checks will be mailed back to applicants for denied or withdrawn applications.
3Does an addition to the house render the property inelligible?Not necessarily.  The design of a proposed addition must conform to the Secretary of the Interior's Standards for Rehabilitation.  Alternatively, there could be a plan to rehabilitate an existing non-compatible addition to comply with the Standards.
4After we get the Mills Act, can we add to the property? How is that assessed by the Assessor?Yes.  The design of the addition would need to conform to the Secretary of the Interior's Standards for Rehabilitation.   The County Assessor's office uses a blended approach to the valuation.  New construction receives less property tax reduction.  Properties with significant new construction may not benefit from tax savings.  The OHR recommends discussing with the County Assessor's office before applying.
5If extensive rehabilitation happened 2.5 years ago, when does OHR consider it too long ago to include? At the time of contracting or Certificate of Completion?The Mills Act Application Guide states that work completed by the current owner in the year prior to the application will be considered as recently completed in order to qualify for the program.  The purpose of this is to reinforce that the Mills Act is an incentive program to encourage future rehabilitation work to happen.  The completion date would be established by the date the work is signed off by the building department.  If an owner was able to successfully complete their project without financial subsidy, there is no established need for granting a Mills Act contract.  If a property is being "flipped" it is also not a good candidate since there is no long term commitment to the preservation of the property. 
6Other cities do not include interior space for Mills Act. Is this common? How does the city find staff to oversee interior as well as exterior?Review of the interior and exterior of the property is codified in the State enabling Mills Act legislation (California Government Code Sections 50280-50290) and City of Los Angeles Ordinance No. 172.857 Section 19.143.  Mandated review is not a function of staffing levels.  The City will be establishing an inspection fee to be paid for by the property owner.  The fee will ensure inspections of properties with existing Mills Act Contracts are being performed with adequate staffing.
7Are we obligated to complete everything on the Rehab Plan? The estimated savings isn't even close to covering the entire cost!The Mills Act will not necessarily pay for the entire rehabilitation of any property.  It is meant to offset costs enough to incentivize the work to happen. The Rehabilitation Plan is meant to help establish and prioritize rehabilitation needs for the property.  Applications where there is significant identified work and the owner is willing to invest the required sums to complete the work represent applications with greater priority consideration.
8Many structural engineers are not willing to work on small, historic projects. Do you have a list of those that do?Yes, email Lambert Giessinger or Nels Youngborg and the list can be sent to you.
9My property has three historic tiled bathrooms. Can we modernize one and restore the rest?This can be explored as an alternative.  Consult with OHR on proposed plans.  
10Can I use hollow dual pane to replace single layer glass?The use of alternative materials or systems can be looked at on a case-by-case basis.  Maintaining historical appearance and historic materials is important.  Typically, for divided light wood sash windows, dual glazed units cannot maintain the historical appearance of the window, as the wood elements (muntins and mullions) generally need to be thicker to accomodate dual glazing.  
11Is the property tax-assessment linked to the restoration work I plan to do?Yes.  Allowed expenses for rehabilitation and maintenance are linked to the Mills Act valuation calculation.  Assessor may request supplemental information.  
12I don't know how much certain projects may cost. Can I write "TBD" on the Rehab Plan?No, do not write TBD. It would be better to estimate the cost.  The dollar amounts are meant to reflect the level of investment the owner is committing to under the contract.
13Is hiring a building biographer recommended? Do we include the biography with the application?Additional research and documentation to substantiate the property's uniqueness is a good idea, though it is not required.  This may be particularly useful for HPOZ Contributors that only have summary historical information as part of the HPOZ Survey.  For properties seeking exemptions to valuation limits (for which a Historic Structure Report is required) in order to demonstrate uniqueness, a more thorough historical background is necessary.  
14How is the installation of solar panels viewed by the Mills Act?Solar panels can be visually intrusive and detract from the historical appearance of a property as viewed from the public right-of-way. Solar panels are best placed on areas not visible from the street and in a way that does not cause adverse impacts to historic elements.
15Do you need significant future expenses to get into the program? I already completed my rehabilitation in the past couple of years.Yes, including maintenance.  Without a plan and expenses moving forward, the application may not meet the Priority Consideration criteria.  There may also not be tax savings, as well.
16Any suggestions in getting bids from contractors or estimating project costs?Estimates from qualified contractors are important.  Qualified means they have demonstrated experience in working on historic properties and working with the Secretary of the Interior's Standards for Rehabilitation.  It is important to have the scope of work thoroughly identified so contractors know what they're bidding on.  In some cases, working with a qualified architect may also be necessary and important to defining the scope of work.
17Is it OK that all projects are "complete" instead of "proposed"?No, if there is no more work necessary to fully rehabilitate the property, then you most likely will not meet the Priority Consideration Criteria for Necessity.
18If we want to rehab our kitchen, what should we be aware of in terms of adherence to the Mills Act?Identify and retain any historic, character-defining features of the kitchen and incorporate them into a rehabilitation plan.
19What Is the process for making a property a monument and eligible for the Mills Act?The Historic-Cultural Monument process is identified on the OHR website at www.preservation.lacity.org.  Eligible properties also include HPOZ contributors.
20Can we move around the order of our rehab plan after our Mills Act [contract] is finalized?Yes.  Work with the OHR to ensure that important items are dealt with first (such as foundation issues before landscaping).
21I want to restore the landscape. Is that included?Yes.  The setting and landscape maintenance of the property are important.
22We currently have a metal building on the property not of the time period, is this protected under the Mills Act?If it is not an historic, character-defining feature of the property, then its preservation would not be identified under the contract.  However, it would still need to be maintained under the property maintenance requirements in the contract Exhibit B.  Consult with OHR to confirm this feature has not taken on significance over time.  
23Can I submit a ZIMAS map as a site plan for the application?No, the ZIMAS map is not detailed enough.  Consult the site plan example in the Application Guide.
24On the Priority Consideration Criteria worksheet, is the explanation limited to the space provided?Yes, please only use the space alloted and be specific and succinct. 
25For calculating income for mult- family property, do you use market rate or actual? What if units are under rent control or owner occupied?The Assessor's office is required to use market rate rents in the calculation.  However, you may be able to work with your assigned Mills Act appraiser to refine the numbers used.  Assessor may request supplemental information.  
26We want to start our rehabilitation within the next month. Is this allowed? How should I proceed?Yes.  Work closely with a qualified consultant and keep the OHR apprised of your work to ensure conformance with the Secretary of the Interior's Standards for Rehabilitation.
27If my property is held in my living trust, are the contract and other documents filed in the name of the trust?Yes, they are filed in the name of the trust and the trustee(s) will sign the document and identify their relationship to the trust on the signature page and Notary Acknowledgement Form.  Consult the Application Guide for more information.
28Are there businesses which offer discounts to Mills Act homeowners? How do we find these businesses?No, not that the City is aware of.
29The back of the property is not visible.  Are there any different considerations for this part of my house?This would need to be reviewed on a case-by-case basis.  There may be fewer historic features on the rear of a property, however, it would need to comply with the property maintenance guidelines identifed in the contract Exhibit B.
30How detailed should we be on the Rehabilitation Plan?The Exhibit A Rehabilitation Plan should be specific in terms of the building features identified.  The scope of work or treatment may be more general and should identify an appropriate treatment to meet the Secretary of the Interior's Standards for Rehabilitation.  The means and methods of treatment do not need to be described; however, the work would be identified at the design, documentation, permiting and approval phases.
31How is all of this enforced?Through the Department of City Planning, Department of Building and Safety, Office of the City Attorney and the City Council.  Planning and the Cultural Heritage Commission review work on Mills Act properties.  If an owner is found in breach of contract a letter is sent by the Historical Property Contracts Manager to correct the violation.  Building and Safety may also send the owner an Order-To-Comply.  If violations are not corrected in a timely manner, the Commission may inspect the property and hold a hearing to recommend that the City Council cancel the contract.  The City Council is the deciding body if a contract is cancelled.  The City Attorney advises Planning, Commission and City Council on enforcement of the contract.
32If we commit to work in a specific year, but don't do it, is that a breach of contract?Potentially, yes.  The contract outlines the obligation of the owner.  If a sequence of work needs to be refined it is best to work with the OHR to establish new goals under the contract.  We do not typically re-record a contract if there are minor changes in the sequence of work proposed.
33Is xeriscape allowed?Yes, as long as the design complies with the Secretary of the Interior's Standards for Rehabilitation and the Preservation Plan if the property is in an HPOZ.
34Our home is surrounded by a non-historic fence. Will we be required to remove it?Perhaps. This would need to be reviewed on a case-by-case basis.  Unpermitted, over-height or more solid than allowed fences should be legalized if the design is approved or they should be removed.
35What provisions are required if ownership changes?None, the contract runs with the property. It is important that a seller of a Mills Act Contract property fully disclose the document to prospective buyers and identify work completed and remaining and the timeframe in which outstanding items need to be completed.  Buyers should also ensure they are aware of and in agreement with their obligations under the contract.
36What happens when the $2 million is reached? Is the program over?Technically, yes.  The City would not have capacity to accept new contracts.  Prior to reaching the cap, however, the Department of City Planning may ask the City Council to increase the cap.  This was recently done in 2012 when we reached approximately $910,000 of the then $1 million cap.
37Can we reconstruct a demolished chimney if we have photo evidence? What about seismic rules?Yes.  Reconstruction of the chimney will have to comply with current seismic safety regulations.  Ideally, the historical appearance can be reconstructed and accommodate the new structure in an invisible manner.  It is important to work with a qualified team of professionals to ensure conformance with the Secretary of the Interior's Standards for Rehabilitation.  
38What about other National Register Districts? Are they exempt, like Hollywood? Why?The only areas in the City of Los Angeles that are automatically exempt from the property valuation thresholds (in which properties that exceed the threshold do not have to apply for an exemption) are the National Register listed Hollywood Boulevard Commercial and Entertainment District and Greater Downtown Los Angeles Area & Downtown Historic Core (boundary for this area, which encompases the National Register listed Spring Street Financial District and Broadway Theater and Commercial District, is included in Appendix E of Mills Act Application Guide).  
39Can the Rehab Plan be re-prioritized after the contract is finalized?Yes, consult with OHR.  
40I have previously "updated " the kitchen. How does this affect my contract?If the work was done in a way that is consistent with the Secretary of the Interior's Standards for Rehabilitation, then you may be OK.  However, this is reviewed on a case-by-case basis.
41Plaster walls- need to keep? Can I install Sheetrock?Generaly, lath and plaster walls are an important historical feature and far superior to gypsum board.  Lath and plaster should be retained.  National Park Service Preservation Brief 21 discusses the appropriate way to repair plaster:  http://www.nps.gov/tps/how-to-preserve/briefs.htm
42Can a fireplace be repaired and not brought up to current code?Current code for historic properties is the California Historical Building Code (Part 8 of Title 24).  It provides alternative methods to achieve life safety while preserving historic features.  The regular code for new construction tends to be more prescriptive and does not take into account historic building features.  To repair an historic fireplace and chimney it is best to have a clear understanding of the issues/problems in order to address them accordingly.  An inspection process that is independent of contracting for new work is best so there is no inherent conflict of interest between identifying the problem and developing the appropriate solution.
43Can I enlarge my garage to be a two-car?Yes, as long as the design can be achieved consistent with the Secretary of the Interior's Standards for Rehabilitation.  Consult with OHR on proposed plans.  
44What is the process for the 5 year inspection?The City is developing an inspection methodology and fee structure.  Contracts moving forward this year and beyond will be charged a Contract Maintenance Fee as identified in the contract.  Existing contracts will be amended to collect the fee.
45If we don't choose to reconstruct elements that have been removed by previous owners, will we be denied a Mills Act contract?This can be reviewed on a case-by-case basis.  However, reconstructing missing character-defining features may be important to rehabilitating the property in accordance with the Secretary of the Interior's Standards for Rehabilitation and meeting the Priority Consideration Criteria under Necessity.
46Can you discuss which expenses will be allowed when arriving at a net income number for commercial properties?Major building systems upgrades including structural, electrical and mechanical amortized over a ten year period.  Rehabilitation of decorative features including terra cotta, tile, stone, metalwork.  Repair and maintenace of roofing, doors and windows.  Consultation with the Assessor's Office is also advised.  It is important that there be a plan beyond ordinary maintenance to rehabilitate and restore the property in order to qualify for the Mills Act.
47Can we add a second floor to our garage?Perhaps, as long as the design can be achieved consistent with the Secretary of the Interior's Standards for Rehabilitation and the Preservation Plan if the property is located in an HPOZ.
48Is there a dollar amount expected to be spent on restoration projects?The total 10-year scope of work should ideally exceed the estimated tax reduction for the same 10-year period.
49Is the contract terminated after all the projects are complete?No, the contract renews every year for a 10 year period.  If a Notice of Non-Renewal is submitted or the contract is cancelled due to a breach of contract, the contract is terminated 10 years after submission of the Notice of Non-Renewal or cancellation due to breach of contract.  The long term benefit to the property is in requiring that it be maintained in a superior manner.
50What is a "grant deed"?Typically, this is how title to a property is transferred from one entity to another.  See:  http://en.wikipedia.org/wiki/Grant_deed 
51Are properties in exemption areas also exempt from preparing an HSR?Yes.
52Would adding insulation to a home and other energy conservation projects worthy to write in our Rehab Plan?Yes.  In many cases, performing an energy audit can assist in identifying areas that need to be addressed.  Too often, we see people being sold on the idea of replacing windows instead of insulating walls and roofs that represent greater uninsulated area of the building.
53Is the addition of a deck a breach of contract?If the work was done in a manner that is consistant with the Secretary of the Interior's Standards for Rehabilitation, then it may be OK.  This is reviewed on a case-by-case basis.
54If we want to do a project that is not on the Rehab Plan, is that permitted?Yes.  Ideally, the critical infrastructure and rehabilitation tasks should be completed first.  Consult with OHR.  
55Does maintenance of an original pool count as a valid maintenance project?Yes.
56How should an incompatible 1970s kitchen be treated?The operative word in the question is "incompatible".  Due to incompatibility, the kitchen should be rehabilitated to comply with the Secretary of the Interior's Standards for Rehabilitation.  One would assume that "incompatibility" is achieved due to the loss or removal of historic character-defining features including walls, windows and doors/doorways.  1970s cabinetry, flooring, lighting and finishes alone would probably not render the kitchen design incompatible.  This situation would need to be reviewed on a case-by-case basis.  It should be noted that for some properties built in the 1970s, a kitchen of this era may be a character-defining feature; in addition, it is possible that a 1970s kitchen in an earlier property may have taken on significance over time.  
57I have owned my house for 50 years and have substantial rehab plans. Will I end up paying more for property taxes with the Mills Act?No, you would never end up paying more property taxes under a Mills Act contract.  The Assessor's office would look at three values each year under a Mills Act Contract: Base Year/Proposition 13, Current Fair Market, and Mills Act/Income Approach.  The lowest of the three is used for the property tax bill.  In this case, the lowest would be the Base Year/Proposition 13 value which is what the taxes are based on now.  There would be no tax reduction under a Mills Act contract.  Consult the tax adjustment worksheet.  Note that Special District assessments are not reduced under the Mills Act, only the 1% General Levy Tax.