Table 4
PRESERVATION STRATEGIES MATRIX
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Applicable Program/Activity
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National Landmark Eligible
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Local Landmark Eligible
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Structures of Merit
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Of Contextual Value
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CEQA Review
Municipal Code Section 30.34.050
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1
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1
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1
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Design Guidelines
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1
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1
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1
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1
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Development Standards
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1
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1
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1
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1
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Parking Standards
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1
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1
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1
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1
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Flexibility in Land Uses and Adaptive Reuse (Ord. 2009-15)
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13
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13
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13
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13
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State Historic Building Code
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1
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1
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1
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Federal Tax Credits
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11
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12
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12
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13
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Federal Tax Deduction for Charitable Easement
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11
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|
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Mills Act Property Tax Adjustment
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13
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13
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CDBG Eligible Funding
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1
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1
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1
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Facade Grant Program
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1
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1
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1
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1
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Seismic Retro-fit Rebate Program
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14
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14
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14
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Fee Waivers
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1
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1
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1
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1
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Must be listed on the National Register of Historic Places.
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2
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A 10% tax credit is available to commercial structures built
before 1936.
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3
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Must be listed on a national, state, or local historic register.
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4
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For structures with identified un-reinforced masonry (URM) construction
only
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●
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Tax Credits
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Perhaps the most common preservation incentive takes the form
of income tax credits. The Federal Tax Reform Act of 1986 provides
a tax credit equal to 20% of rehabilitation costs for commercial structures
and rental residential buildings. To be eligible, the structure must
be listed on the National Register of Historic Places or located within
a certified historic district. For structures not on the National
Register but which were placed in service before 1936, a 10% tax credit
is available. Rehabilitation work must conform to the guidelines established
by the Secretary of the Interior for historic structures. Certification
requests of rehabilitation work are made through the State Office
of Historic Preservation; certifications are issued by the National
Park Service.
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The credit (either 20% or 10%) is available to the taxpayer
for five years from date of completion of rehabilitation work. Rehabilitated
property may be depreciated over 27.5 years.
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An investment tax credit is also available for substantial rehabilitation
of low income housing properties. To be eligible for the credit, rehabilitations
must meet certain tests relating to cost per unit, number of units
occupied by households with income below area median income, and a
15-year compliance period. The credit amounts to 9% of rehab costs
for ten years.
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For structures listed on the National Register, no action by
the City is required for implementation of this strategy. However,
the City and community may promote the availability of this program
in coordination with local historic preservation groups.
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Tax Deductions
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Certified historic structures that grant a facade easement as
a charitable contribution may deduct the calculated loss in property
value from their federal income tax liability. Owners of qualified
structures listed on the National Register may deed building facades
to nonprofit or government entities in exchange for the deduction.
The property owner must maintain the facade and preserve its historic
value.
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Mills Act
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The Mills Act Tax Adjustment (California Government Code 50280
et seq.) allows cities to enter into contracts with owners of qualified
historic properties to provide for their restoration and maintenance
in exchange for a property tax reduction. In order to qualify, as
with other incentive programs, the property must be a registered National
or local landmark and rehabilitation work must conform to the standards
established by the State Office of Historic Preservation. Periodic
inspections of the property by the County Assessor, Department of
Parks and Recreation, and the State Board of Equalization may be necessary
to ensure continued compliance with the contract.
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Mills Act contracts generally are effective for a period of
10 years, with a provision for automatic annual renewals after the
initial time period. Depending on the specific circumstances of a
property (commercial vs. residential use, mortgage interest rates,
etc.), Mills Act tax reductions can be considerable.
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Implementation of this strategy will be done on a case-by-case
basis, at the initiation of a property owner. The community may promote
the availability of this program in coordination with local preservation
groups.
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Community Development Block Grants (CDBG)
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Certain rehabilitation projects can qualify for low-interest
loans or grants through the CDBG program. Qualifying projects must
meet a "national objective" such as providing affordable housing opportunities
or improving targeted areas of "blight", as defined by the Department
of Housing and Urban Development (HUD). The City currently applies
its CDBG allocation primarily to serving low-income households. To
qualify for historic rehabilitation funds, in addition to meeting
a national objective, properties must be either listed or eligible
for listing on the National Register of Historic places; be designated
as a state or local landmark by appropriate law or ordinance; or be
listed in a state or local inventory of historic places. In allocating
CDBG funds, the City will consider granting preference to projects
affecting historically significant structures that also provide affordable
housing opportunities. Furthermore, it is hereby established as City
policy that any CDBG project affecting an historic site or structure
must not result in any significant negative impacts to the historic
resource.
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Implementation of this strategy will require that the City establish
criteria for evaluating and prioritizing CDBG allocations to projects
involving historic rehabilitation.
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Façade Grant Program
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In the past, the Downtown Encinitas Mainstreet Association (DEMA)
has administered a grant program to assist Downtown merchants in rehabilitating
their store-fronts. The City should consider supporting this, or a
similar program for encouraging historic preservation and rehabilitation.
Rehabilitation work shall comply substantially with accepted standards
(State Office of Historic Preservation) and should be consistent with
the Design Recommendations of this Specific Plan. Such a grant program
may potentially be funded through the City's General Fund or through
CDBG allocations.
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Implementation of this strategy will require funding support
from the City, and administration by a qualified organization such
as DEMA.
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Seismic Retro-fit
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In the Downtown area, several of the inventoried historic buildings
have also been identified in a separate inventory to be of un-reinforced
masonry (URM) construction. Subject to the provisions of a citywide
URM ordinance, the City should consider offering or establishing a
rebate program to provide for reimbursement of seismic retro-fitting
costs. The rebate program would apply to owners of documented historic
structures who agree to rehabilitate and maintain the property for
historic preservation purposes.
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Application of this strategy will require a commitment of funds
from the City. Potential funding sources include the city's General
Fund, CDBG (subject to HUD requirements), or bond financing. In determining
the feasibility of a seismic-retrofit rebate program, the City should
investigate all potential funding sources.
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Fee Waivers
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In order to encourage historic rehabilitations, the City should
consider reductions or waivers of processing fees for building permits
or design review. Fees may be paid from specially earmarked funds
from the General Fund or other eligible sources. Implementation of
this strategy requires that the City review which processing fees
and which types of projects may be eligible for waivers and/or reductions.
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Historic Preservation Ordinance and Commission
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In the future, the City may find it desirable to establish additional
historic preservation measures such as an ordinance and/or commission
in order to further coordinate and implement City-wide preservation
strategies. A commission can have several advantages. It can seek
various funding sources and develop additional preservation programs,
as well as implement those programs outlined in this Plan. With members
meeting certain qualifications, it can enable Encinitas to become
part of the Certified Local Government (CLG) program. CLG status would
enable the City to qualify for certain other grant funds from the
federal government earmarked specifically for the CLG program. These
funds can be used to finance a number of preservation programs. Participation
in the Certified Local Government program gives preservationists access
to technical support from the Office of Historic Preservation and
other sources. (Ord. 2009-15)
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A commission would also have the expertise to review projects
that affect historic properties. It could review historic resources
to determine their historic significance; review National Register
applications; make recommendations to the State Office of Historic
Preservation; and play a key role in local landmark designation, should
the City wish to consider such designation.
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Establishment of a Historic Preservation Commission is not required
by this specific plan, but would be consistent with the policies and
programs of this plan.
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Education Programs
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An historic preservation program may include activities to make
the community aware of, and appreciate its historic resources. This
function is being performed, in part, by private groups such as the
Encinitas Historical Society, the San Dieguito Heritage Museum, the
Cottonwood Creek Conservancy, and DEMA. To further awareness of our
historic resources, the City supports the efforts of such groups.
As mentioned previously, such local organizations are instrumental
in promoting and carrying out certain preservation strategies.
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