History Hysteria: Historical Resources in the City of San Diego*

Finding: The criteria for determining whether a building deserves to be designated as historic in the City of San Diego are overly inclusive and extremely vague. Response: Disagree, the City's adopted designation criteria are in line with both the California and National Register listing criteria. The criteria were adopted by the City Council as part of the municipal code update and have been in effect since January 2000. The criteria incorporate sound historic preservation principles and are supported by the State Office of Historic Preservation (OHP), recognized as the statewide authority on matters concerning historic preservation.

Finding: There are too few personnel in the Planning Department to keep up with the flow of applications much less to conduct annual inspections of properties designated as historical to ensure compliance with conditions put on the designation, or with the rules and regulations governing preservation. Response: Disagree, the City has recently filled two vacancies in City Planning & Community Investment (CPCI) and one vacancy in Development Services (working under CPCI supervision), bringing the Historic Preservation staffing level to four Senior Planners and one Associate Planner. In addition, a potential fee schedule for historical designations, Mills Act contracts and inspections has been proposed for consideration which would provide full cost recovery for the current level of staffing. The City will continue to monitor workload for Historical Preservation Staff through the City's Annual budget process. In addition, the Fiscal Year 2009 Proposed Budget includes department performance measures related to the processing of historic designations. City Council Approved Responses to the Grand Jury Report "History Hysteria: Historical Resources in the City of San Diego" Dated March 19, 2008 3. Finding: Even with all staffing slots filled, the processing of applications can just about keep up with submissions, and there still would be no provision for regular inspections. Response: Partially disagree, provision for regular inspections will be accommodated with the current level of staffing and funded by a proposed new fee. However, the ability to process applications at the current level of submissions is unlikely due to other aspects of the work program. Project review and referrals from Development Services and CCDC account for a number of items on the Board agenda each month. These reviews are mandated by the City's Municipal Code and must be taken to the Board within specified time frames. When there are a significant number of referrals for projects, the ability to review owner submittals for designation is reduced. The average number of owner nominations taken to the Board is about 4-5 per month for about 45-50 per year, over 11 meetings. There have been in excess of 70 owner nominations submitted on a yearly basis during the last few years, so there is always a backlog of submittals. The Board has to review the consultant report, staff report and visit the site for every property they review for designation. The meetings are typically 4-6 hours long, often extending past 5 pm. While additional staff helps greatly with the overall work program, there is a limit to how much a voluntary Board can be asked to do each month. The City will continue to monitor workload for Historical Preservation Staff through the City's Annual budget process. In addition, the Fiscal Year 2009 Proposed Budget includes department performance measures related to the processing of historic designations.

Finding: Even with all staffing slots filled, the processing of applications can just about keep up with submissions, and there still would be no provision for regular inspections. Response: Partially disagree, provision for regular inspections will be accommodated with the current level of staffing and funded by a proposed new fee. However, the ability to process applications at the current level of submissions is unlikely due to other aspects of the work program. Project review and referrals from Development Services and CCDC account for a number of items on the Board agenda each month. These reviews are mandated by the City's Municipal Code and must be taken to the Board within specified time frames. When there are a significant number of referrals for projects, the ability to review owner submittals for designation is reduced. The average number of owner nominations taken to the Board is about 4-5 per month for about 45-50 per year, over 11 meetings. There have been in excess of 70 owner nominations submitted on a yearly basis during the last few years, so there is always a backlog of submittals. The Board has to review the consultant report, staff report and visit the site for every property they review for designation. The meetings are typically 4-6 hours long, often extending past 5 pm. While additional staff helps greatly with the overall work program, there is a limit to how much a voluntary Board can be asked to do each month. The City will continue to monitor workload for Historical Preservation Staff through the City's Annual budget process. In addition, the Fiscal Year 2009 Proposed Budget includes department performance measures related to the processing of historic designations.

Finding: The City of San Diego is too liberal in designating individual properties and districts as historical. Response: Disagree, the City's designation criteria, adopted by the City Council, are consistent with both the California and National Register listing criteria. There are approximately 2,000 historically designated properties in the City of San Diego (1,150 district contributors in 15 districts and 850 individual sites.) This number of designated properties is very similar to numbers of designated resources in San Francisco which has 10 historic districts with approximately 2,000 district contributors, and 259 individually designated properties. San Diego's numbers are far fewer than other large California cities. For example, the city of Los Angeles has over 9,000 individually designated properties and more than 13,000 properties within 22 districts; San Jose has more than 3,400 designated properties and nine historic districts; and Sacramento has nearly 900 individually designated resources and 27 historic districts with more than 700 district contributors. 6/17/2008 City Council Approved Responses to the Grand Jury Report "History Hysteria: Historical Resources in the City of San Diego" Dated March 19, 2008 5. Finding: There are far too many properties that receive Mills Act property tax reassessments every year in the City of San Diego. Response: Partially disagree, the Mills Act program is an important tool for the preservation and when necessary the restoration or rehabilitation of significant historic sites in San Diego. The Mayor has proposed changes to the Mills Act program that will be reviewed through a public process in order to determine whether annual limits for fiscal planning purposes and additional eligibility requirements are warranted. But given that the Mills Act tax reduction program is the only financial incentive available to historic homeowners, it is not surprising that the program is highly popular. Along with studying the Mills Act program, the City is looking comprehensively at historic preservation incentives that do not result in fiscal impacts. The City Council agrees with the Mayor that the Mills Act program is an important tool for the preservation and when necessary the restoration or rehabilitation of significant historic sites in San Diego. This sentiment is captured in City Council Policy 700-46 - Mills Act Agreements for Preservation of Historic Property which states "It is the policy of the City of San Diego to foster and encourage the preservation, maintenance, rehabilitation and restoration of historically designated property within the City of San Diego." However, the City Council also agrees that a comprehensive review of the City's Mills Act program and other historic preservation incentives is warranted.

Finding: There are far too many properties that receive Mills Act property tax reassessments every year in the City of San Diego. Response: Partially disagree, the Mills Act program is an important tool for the preservation and when necessary the restoration or rehabilitation of significant historic sites in San Diego. The Mayor has proposed changes to the Mills Act program that will be reviewed through a public process in order to determine whether annual limits for fiscal planning purposes and additional eligibility requirements are warranted. But given that the Mills Act tax reduction program is the only financial incentive available to historic homeowners, it is not surprising that the program is highly popular. Along with studying the Mills Act program, the City is looking comprehensively at historic preservation incentives that do not result in fiscal impacts. The City Council agrees with the Mayor that the Mills Act program is an important tool for the preservation and when necessary the restoration or rehabilitation of significant historic sites in San Diego. This sentiment is captured in City Council Policy 700-46 - Mills Act Agreements for Preservation of Historic Property which states "It is the policy of the City of San Diego to foster and encourage the preservation, maintenance, rehabilitation and restoration of historically designated property within the City of San Diego." However, the City Council also agrees that a comprehensive review of the City's Mills Act program and other historic preservation incentives is warranted.

Finding: Only elected officials should determine matters of taxation and expenditures. Response: Agree. The process for entering into a Mills Act contract with a qualifying property owner was established by the elected City Council. Authority for individual contracts was given to the City Manager and rests with the Mayor or designee, under the current form of government.

Finding: If most of the properties currently under Mills Act contracts were reassessed on the basis of just the shell of the building, then tax losses to the City would be significantly less. Response: Disagree, the Mills Act and regular tax assessment process is prescribed in state law (California Revenue and Taxation Code.) The shell of the structure cannot be separated for tax valuation, as proposed. The whole of the structure is assessed as an economic unit, there is not specific value assessed for individual elements of the structure. However, if an identifiable portion of the structure, such as a room addition or garage, is excluded from the historic designation because it is non-historic, it is valued at current tax rates. In these cases, a blended valuation is prepared by the Tax Assessor, thus allowing the tax reduction only for the qualifying historic resource. City Council Approved Responses to the Grand Jury Report "History Hysteria: Historical Resources in the City of San Diego" Dated March 19, 2008 8. Finding: There need to be both regular inspections of all designated properties and those with Mills Act contracts, and procedures for de-listing them in order to ensure that their historicity is properly maintained. Response: Agree. The legal requirements for de-listing, or recision, of a historic designation is provided in the Municipal Code (Section 123.0205 - Amendment or Recision of Historical Resource Designation). The Mayor has proposed changes to the Mills Act program that will be reviewed through a public process and will consider regular inspections, as warranted. To date the Mayor's proposed changes to the Mills Act Program have not been heard by the City Council or Council Committee. The Mayor is planning to present his proposed changes to the Land Use and Housing Committee and then the City Council prior to the end of the calendar year. Recommendations (City Council) 08-16: Enact a moratorium of one and a half years on the acceptance of new applications for historical designation in order to eliminate the current backlog, to allow time to fill vacancies, and to give time for all relevant bodies to assemble significant changes in the City's designation regulations. Response: This recommendation requires further analysis. The Mayor supports a comprehensive review of the City's Mills Act program and development of guidelines for applying the adopted designation criteria rather than a moratorium on new applications. All vacancies have been filled and it is anticipated that proposed revisions to the Mills Act program will be taken to the City Council for consideration prior to the end of the calendar year. 08-17: Restrict the number of properties designated as historical resources to three per month after the backlog has been cleared. Response: This recommendation requires further analysis. The Mayor supports a comprehensive review of the City's Mills Act program and development of guidelines for applying the adopted designation criteria rather than setting an arbitrary number of historical designations on a monthly basis, which is not consistent with sound historic preservation principles. 08-18: Establish much more precise and concrete criteria for determining historicity. Response: This recommendation requires further analysis. The Mayor partially supports this recommendation. Although the City's designation criteria are consistent with California and National Register listing criteria, guidelines for applying those criteria are being prepared by staff and the Historical Resources Board. City Council Approved Responses to the Grand Jury Report "History Hysteria: Historical Resources in the City of San Diego" Dated March 19, 2008 08-19: Designate a separate entity to review all properties currently designated as historical resources to determine if they meet new criteria. Response: This recommendation requires further analysis. However, the Mayor does not support this recommendation. Each decision to designate a property as a historical resource is made at a noticed public hearing and based on a research report, staff recommendation and public testimony. This process is mandated by the Municipal Code and is consistent with due process. Review of properties already designated to determine consistency with new criteria would require a public hearing to address each property, consistent with the Municipal Code. 08-20: Establish restrictions on the number of exemplars of a housing type and of historical district types to what is truly needed for the City of San Diego. Response: This recommendation requires further analysis. The Mayor supports a comprehensive review of the City's Mills Act program and development of guidelines for applying the adopted designation criteria rather than establishing a numerical restriction on historic districts or individually significant historic properties. The current review of the Mills Act program includes possible recommendations for annual limits on new contracts and additional eligibility requirements, as warranted. Setting an arbitrary number of designations is not consistent with sound preservation principles and not an effective way to protect and preserve the important historical resources of the City. To date the Mayor's proposed changes to the Mills Act Program have not been heard by the City Council or Council Committee. The Mayor plans to present proposed changes to the Land Use and Housing Committee and then the City Council prior to the end of the calendar year. 08-21: Establish an annual fee on designees that will cover the cost of annual inspections, and to conduct such inspections. Response: This recommendation requires further analysis. A potential fee schedule for historical designations, Mills Act contracts and inspections has been proposed for consideration which would provide full cost recovery for the current level of staffing to ensure compliance with regulations and contract specifications as part of the comprehensive review of the Mills Act program. The establishment of new or revised fees will be reviewed through public meetings, including with the City Council Committee on Land Use and Housing. It is anticipated that proposed revisions will be taken to the City Council for adoption prior to the end of the calendar year. City Council Approved Responses to the Grand Jury Report "History Hysteria: Historical Resources in the City of San Diego" Dated March 19, 2008 The City Council is also supportive of cost recovery fees for City services. The City's Administrative Regulation 95.25 outlines the City's procedures to establish fees to recover the cost of providing City Services.

Finding: There need to be both regular inspections of all designated properties and those with Mills Act contracts, and procedures for de-listing them in order to ensure that their historicity is properly maintained. Response: Agree. The legal requirements for de-listing, or recision, of a historic designation is provided in the Municipal Code (Section 123.0205 - Amendment or Recision of Historical Resource Designation). The Mayor has proposed changes to the Mills Act program that will be reviewed through a public process and will consider regular inspections, as warranted. To date the Mayor's proposed changes to the Mills Act Program have not been heard by the City Council or Council Committee. The Mayor is planning to present his proposed changes to the Land Use and Housing Committee and then the City Council prior to the end of the calendar year.