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Council approves changes to Historic Landmark Ordinance

Tuesday, August 9, 2011 by Josh Rosenblatt

On Thursday, the City Council unanimously approved a $2500 cap on tax exemptions for all newly designated owner-occupied historic landmark properties Thursday. However, they rejected a recommendation from Mayor Lee Leffingwell that would have imposed that cap on all properties granted landmark status after Jan. 1, 2010, when Council first directed staff to propose amendments to the city’s controversial Historic Landmark Ordinance.


Council and staff have been working to alter the ordinance since December 2009, when some 50 residential properties were granted historic status—and the tax abatements that come with that status—in a single month. Despite public outcry at the time over the amount of revenue the city was losing as a result of the historic landmark program, the amendments approved by Council last week will actually temper some of staff’s money-saving recommendations.


Currently the maximum city exemption is the greater of $2000 or 50 percent of the city tax levy. Staff recommended that the $2500 cap be applied to all new historic landmarks, all existing landmarks that have a change of ownership, and for residential landmarks approved after January 1, 2010.


Council has warned all property owners who have applied for historic status since that date that the tax exemption guidelines could be changing.


Staff also recommended a gradual five-year phase-in period for those properties that were granted historic status before Jan. 1, 2010, and that have an exempted value exceeding the maximum cap.


Leffingwell argued against a phase-in period, instead offering a friendly amendment to the resolution stating that until a change of ownership occurs the city should “maintain the current level of tax exemption for properties designated before Dec. 1, 2004 and the current level of tax exemption for properties designated between Dec. 1, 2004 and Jan. 1, 2010 or the effective date of these proposed code changes.”


In other words, all properties zoned historic before Jan. 1, 2010, would retain their current tax exemptions until the point of sale. Properties granted historic status after Jan. 1, 2010, however, like all future historic properties, would be subject to the $2,500 cap immediately upon Council approval of the ordinance.


“January 1 is the time when properties that applied were advised that it could be changed at any time,” said Leffingwell, “I’m going to support it either way, (but) I just felt it would be an albeit modest step towards affecting the amount of revenue that we’re not receiving from these tax exemptions.”


According to Historic Preservation Officer Steve Sadowsky, approximately 20 of the city’s 260 owner-occupied historic residential properties were rezoned after Jan. 1, 2010.


Though initially accepted by the maker of the motion, Council Member Bill Spelman, Council Member Mike Martinez modified Leffingwell’s friendly amendment considerably. Martinez, who had argued at the Council work session earlier in the week that any modification of tax exemptions for current historic properties would mean the city going back on its word, added wording to the resolution that properties designated after Jan. 1, 2010, “would remain under the current exemption status until the point of sale.”


Spelman and Council Member Laura Morrison, who seconded Spelman’s motion, accepted that amendment.


Another major amendment to the resolution, put forth by Morrison, states that “No property with an addition or alteration which has significantly compromised its historical integrity as defined by the National Register of Historic Properties may be considered a historic landmark.”


Morrison argued that such language would make deliberation over applications easier for staff and Council. “It allows us, instead of being very specific about footprint, height, scale, etc., to just refer and depend upon ‘integrity’ as defined by the National Historic Register of Historic Properties,” said Morrison.


Council voted 7-0 in favor of the amended resolution, which will now go back to staff. Following reworking by staff and a review by the Law Department, the resolution will once again go before the Historic Landmark Commission, then the Planning Commission, and then, finally, Council again. Jerry Rusthoven, of the city’s Planning and Development Review Department, told In Fact Daily it would probably be at least three months before the amended resolution returns to Council.


The debate took place only an hour after Council had voted unanimously to approve a settlement with Dominic Chavez, Alfred Stanley, and Mike Levy, who filed a lawsuit against the city in April claiming the city had violated the state tax code by not requiring owners of properties zoned historic to show their properties are “in need of tax relief to encourage preservation,” as stated in the code. 


Under the terms of that settlement, all property owners applying for historic landmark status will now have to provide a statement that reads, “My property is in need of tax relief to encourage its preservation because …”

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