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Struggle continues over how to change historic rules

Tuesday, July 27, 2004 by

Staff, ZAP, Heritage society at odds on tax exemptions in particular

The Zoning and Platting Commission is unanimously endorsing changes to the city's historic preservation ordinance recommended by the Historic Preservation Task Force formed to study the ordinance. The Commission reviewed the recommendations from that task force, city staff and outside groups such as the Heritage Society of Austin and a new group that was formed in response to the task force recommendations called Preserve Austin. Commissioners voted 7-0 to endorse task force recommendations during special called meeting Monday night.

Under the task force's proposal, the formula for calculating tax abatements for historically zoned properties would change. Under the current city code, historically zoned homes occupied by the owner receive an abatement of 100 percent of the value of the structure and 50 percent of the value of the land. Rental properties currently receive a 50-percent abatement on the value of the structure and 25 percent of the value of the land. Those abatements cost the city approximately $738,526 in foregone property tax revenues each year.

The task force recommended changing the abatement for owner-occupied homes to $2,000 or 50 percent of the city's tax levy, whichever is greater. For rental homes, the task force suggested keeping the tax abatements in the current code. These formulas would result in the city foregoing about $738,558 per year, which is just $32 more than the current program, according to staff calculations. However, one task force member said after the meeting that staff arithmetic did not consider the recommendation that structures designated historic in the future would have to be 75 years old in order to be eligible for a property tax exemption.

"It's virtually no change," explained Commissioner Keith Jackson, who served on the task force. "We did a lot of analysis on the current tax exemptions that had been granted. The $2000—although it might appear to be arbitrary—there's a limited number of structures that would exceed that today. If you look at a Bell curve, it probably takes in 75 to 80 percent of the residential structures. But by not setting just a percentage, it protects the lower end historic properties. They still get the standard break that we've been getting, but the upper end gets capped."

City staff is recommending that owner-occupied historic homes be granted a tax abatement on 100 percent of the value of the building and 25 percent of the value of the land, while rental properties receive an abatement of 50 percent of the value of the structure and no tax breaks on the value of the land. That would result in about $631,287 of forgone tax revenue each year, which means the staff's proposal would put $107,239 dollars more into the city's coffers than the current guidelines.

Betty Baker, who chairs the Zoning and Platting Commission and headed up the task force, said she had heard during a meeting that “staff had been instructed to cut 15 percent” from the amount the city is losing in tax revenues. She said the staff recommendation would mean a retired school teacher she knows would lose her family home because she would not be able to pay the taxes on the land surrounding it.

The Heritage Society agrees with the task force recommendation but Preserve Austin says that all designated landmarks should be eligible for the exemption regardless of age or date of designation. However, Preserve Austin does not agree with any reductions in exemptions until an economic impact study is done—an idea first proposed by the Historic Landmark Commission.

The task force also recommended changing the rules for which properties are deemed historic. The 13 subjective criteria currently used by the Historic Landmark Commission, according to their report, should be trimmed down and be made more objective. The minimum age for a historic structure should still be 50 years, according to the task force, but properties should not be eligible for a tax exemption until they are 75 years old. "A lot of people that have invested in homes or commercial property; they have invested on the basis of this tax exemption," said Commissioner Jackson. "So we suggested that existing owners be exempted from this change. You've got some homes out there that are only 50 years old. If three or four years from now they're sold, the new owner would understand that he wasn't eligible and he would have to go through the process again. We did want to grandfather all the existing properties."

Candace Volz, a representative of Preserve Austin, told commissioners her organization favored the 50-year standard since preservation groups have adopted it nationwide. But other task force members on the commission pointed out that the tax abatements granted by most other cities for historic properties were much smaller than Austin's.

The Planning Commission is scheduled to take up the recommendations on the changes to the historic preservation ordinance at its meeting tonight. The item is on the City Council's agenda for this Thursday.

The Heritage Society has sent a letter to its members urging them to send a statement of support for the task force recommendations to the City Council, which is scheduled consider the matter this week.

The letter says, “The Task Force spent months reviewing the best means of strengthening Austin’s preservation program. The Heritage Society wholeheartedly supports the majority of the Task Force recommendations. Unfortunately, several alternate recommendations have also been made to Council on key preservation issues, jeopardizing the success of the program. The preservation community in Austin stands in unison for the Task Force recommendations to tighten criteria for landmark designation, maintain financial incentives to preserve, establish local historic districts and strengthen the ordinances that foster preservation in our community.”

The Council may choose to postpone the matter, since it has an extremely full agenda.

Million dollar home, dilapidated house set on landmark path

Owners of both structures requested landmark designation

The two cases considered by the Historic Landmark Commission (HLC) on Monday night showed the contrast often presented by cases up for commission consideration.

In one case, the commission considered historic designation for a million dollar home in Pemberton Heights owned by a founding member of one of Austin's premier law firms. In the other case, commissioners considered initiating the historic zoning process for a property in the Chestnut neighborhood so run down that the Building and Standards Commission wanted to condemn it. The owner was present at last night's meeting, hoping to preserve the house.

The 68-year-old Graves House on Green Lane in Pemberton Heights is considered a contributing structure to the Old West Austin National Register District. The house, designed by prominent local architect Hugh Kuehne, was built in 1936 for Judge Ireland Graves.

Graves was the grandson of Governor John Ireland of Seguin and founded the Austin firm Graves Dougherty Hearon and Moody with his son-in-law Chrys Dougherty in 1946 and remained active in legal circles until his retirement in the 1960s. Graves' most prominent case was an argument on states' rights before the Supreme Court in 1941.

The appraised value of the Graves House, which sits on just under an acre of land, is set at almost $1 million. The annual total tax abatement on the house from all taxing authorities would be $14,079, with the city's property tax exemption equal to $3,707—unless the ordinance is changed before the property gains the H designation.

Terry and Judith Bray have lived in the house with other family members since they bought it from the Graves family in 1972. Bray is an attorney who serves as the Vision 2010 representative on the Envision Central Texas board of directors. He is also a member of Graves’ law firm. He has represented a number of prominent local developers before the City Council, although he has not done so lately.

The Historic Landmark Commission unanimously recommended the designation after little discussion, with Chair Lisa Laky and Commissioner Julie Hooper recusing themselves from the vote. Laurie Limbacher and Vice Chair Jim Fowler were absent from the meeting.

By contrast, the Gregg House on East 12th Street is a far more modest dwelling. The two-bedroom house, which sits at 2700 block of East 12th Street, has been vacant for years. The Building and Standards Commission voted to recommend demolition of the house, which the Historic Landmark Commission can override with a historic designation.

The Gregg House does have its own pedigree. Leroy Andrews, whose mother has lived in the house, says the home was one of the first in East Austin. Historic Preservation Officer Steve Sadowsky noted that the house, built in 1912, was one of the first homes in East Austin owned by an African-American.

Charles Gregg was a Teamster, followed by a stint as owner of the East End Barber Shop until his death in the 1930s. Sadowsky said Gregg opened his business during the era of segregation. In the 1920s or 1930s, an African-American barber either catered to white clients downtown or opened a shop for the African-American community in East Austin.

After Gregg's death, his wife Sarah continued to live in the house, taking in laundry to support her family. Upon her death in 1955, her sister Lillian Andrews lived in the house. While Andrews has moved, the house is still owned by the Gregg estate.

The 92-year-old house was considered a medium priority for historic preservation in the Chestnut Neighborhood Historic Resources Survey.

Leroy Andrews is not just concerned with history, he's looking to fix up the house so that his mother can return to it, he said after the meeting. The Historic Landmark Commission found enough merit to the historic zoning case to unanimously recommend the initiation of a historic zoning cased on the property.

Threat made . . . City Historic Preservation Officer Steve Sadowsky told In Fact Daily a male caller left a message on his home answering machine about two weeks ago that warned, “You’d better change your mind if you know what’s good for you.” The caller did not leave a name or inform Sadowsky what he was supposed to change his mind about, but the historian agreed that it probably related to his recommendation regarding tax incentives for commercial historic structures. If the Council adopts staff recommendations on that item, business owners of historic property would have to pay significantly more in taxes. Owners of H-zoned commercial structures are exempted from 50 percent of the value of the structure and 25 percent of the value of the land. Sadowsky and his department have recommended that the exemption be changed so that there would be no exemption for the land but that the tax on the structure be set at 100 percent. Owners of downtown property would be hit hard by such a change since their land is often of much greater value than their buildings. Sadowsky said he had not changed his mind even though he has received a lot of other calls—not threats, just hang-ups . . . Meeting today . . . The City Council Health Care subcommittee is scheduled to meet at 3:30pm. Their agenda includes an item to consider and make recommendations to the full Council for appointments to the hospital district board of managers. They may also approve the retention of an independent auditor to verify the city’s ad valorem tax rate as required by the hospital district statute . . . The Codes and Ordinances Committee of the Planning Commission will meet at 5:30pm in Room 240 and the full Planning Commission will meet at 6pm in Room 325 of One Texas Center . . . The RMMA Plan Implementation Advisory Commission will meet at 6:30pm at Waller Creek Center. They will talk about affordable housing and mass transit . . . The Parks and Recreation Board will meet at 6:30pm in the department boardroom. They will be considering a recommendation to the Council on an amendment to city rules for construction in the 25-year flood plain. William Archer, who tried unsuccessfully to convince the board and the City Council to allow boat racing on Town Lake, will present his proposal for racing at Walter E. Long Metropolitan Park . . . Connect Austin announces . . . A newly formed group will be holding a press conference at noon today to discuss plans to persuade Capital Metro to include a downtown streetcar on the commuter rail ballot in November. The event is planned for the Northeast Corner of 3rd Street and Colorado Avenue, unless it rains. The rain location is Room 111, 211 E. 7th St., Southwest Tower. Connect Austin describes itself as “a broad-based community effort to connect people with places in the heart of Austin.” Supporting organizations include the Downtown Austin Alliance (DAA), Liveable City, Texas Community Project, Downtown Area Neighborhood Association (DANA), Cleanwater Action and the Austin Hotel and Lodging Association.

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