ATHENS - CLARKE COUNTY UNIFIED GOVERNMENT
COMMISSION AGENDA ITEM
SUBJECT: LOCAL HISTORIC PROPERTY TAX ABATEMENT PROGRAM STATUS REPORT
COMMITTEE: ATHENS-CLARKE COUNTY HISTORIC PRESERVATION COMMISSION
( ) RECOMMENDATION
( ) POLICY/DISCUSSION
( ) STATUS REPORT
(X) INFORMATION
( ) OTHER
DATE: July 3, 1997
BUDGET IMPACT:
ANNUAL- N/A
CAPITAL- N/A
COMMISSION ACTION REQUESTED ON: August 5, 1997
HISTORY:
At the June 3, 1997 meeting of the Mayor and Chair and Commission, Commissioner Farmer requested an information report on the current administration and history of the local property tax abatement program. It is staff
=s understanding that one of the reasons for this request is to provide clarification of the program in response to several concerns expressed to Commissioner Farmer regarding the program. Of particular concern was this program=s relationship to renovation. As such, it is the purpose of this report to provide answers to these questions.On April 11, 1990 the Governor of Georgia signed into effect a local option act for a property tax deferment program for historic resources designated under an approved local ordinance and listed either in the State Register or the National Register of Historic Places. This incentive program does not require rehabilitation of these historic properties. Georgia's local option preferential assessment freeze requires a local ordinance; to date Atlanta and Cobb County are the only municipalities other than Athens-Clarke County currently taking advantage of this state provision. A copy of the legislation is included as Appendix 1 to this report.
Prior to the consideration of the ordinance by the governing body, the Athens-Clarke County Historic Preservation Commission held two public hearings and a work session with the Athens-Clarke County CEO and Commission on the recommended ordinance. At their November 2, 1994 Public Hearing, the Historic Preservation Commission voted to recommend to the Athens-Clarke County CEO and Commission the approval of the attached ordinance to establish a Local Historic Property Tax Abatement Program.
On January 2, 1995, the CEO and Commission, with the recommendation of the Historic Preservation Commission, passed an ordinance establishing the Local Option Tax Incentive for Historic Property in Athens-Clarke County by a vote of nine (9) to one (1), with Commissioner Logan voting NO. The local ordinance provides an owner of historic property an eight year freeze on property tax assessments if established criteria is met. A copy of the local ordinance is included as Appendix 2 to this report. As is evident, the substantive requirements of the program are established in the state legislation, rather than in the local ordinance.
FACTS AND ISSUES:
I. GOALS of the PROGRAM:
A) To offer an incentive for the designation of historic buildings and properties under the Athens-Clarke County Historic Preservation Ordinance.
B) To encourage and reward the contributions of those property owners who have continued to maintain their locally designated property and, because of their diligence, have not allowed their property to deteriorate to the condition where they would be eligible for state and federal historic preservation incentives for rehabilitation.
3) To recognize the economic contributions that historic resources make to this community.
II. THE ORDINANCE:
The ordinance provides an owner of historic property an eight-year freeze on property tax assessments. When an application is accepted, the value frozen on the tax digest will be the higher of two figures: the acquisition cost of the property or the assessed value of the property at the time the application is submitted to the Board of Assessors. For the ninth year, the assessment increases by 50% of the difference between the recorded first year value and the current fair market value. In the tenth and following years the tax assessment will then be based on the current fair market value.
The property, if located within a residential area, must conform to the local zoning ordinance (see A below). Non-conforming properties in residential zones are not eligible; a non-conforming use is one which existed prior to the imposition of a zoning ordinance and does not conform to the new regulations.
The local option act applies only to certified property. Certification requires 1) a letter of affirmation from the Georgia Department of Natural Resources as being listed in either the National Register of Historic Places or the Georgia Register of Historic Places as either an individually listed property or a contributing resource in a listed district and 2) a letter of affirmation from the local Historic Preservation Commission that the property is a locally designated property. Both certifications are presented to the Board of Assessors, which is required to grant the preferential assessment if the two certifications are in order. If the property is located within a residential area, then a final certification is required, being 3) a letter signed by the Planning Department Director certifying that the property is a conforming use.
A) PROPERTY IN RESIDENTIAL AREAS:
As established by the state legislation, if located in a Residential Zoning District (interpreted in Athens-Clarke County as any of the RS, RG or RM zoning districts), preferential assessment is available only to properties that conform to the zoning ordinance. This requirement would not apply to areas zoned for office, institutional or commercial uses (those zoned with classifications other than residential).
B) LIMITS:
1) The property may not receive benefits under both the local option act and the State Rehabilitation act simultaneously. No provision prevents utilizing these benefit programs sequentially for a total benefit of approximately eighteen years.
2) The preferential assessment and classification of historic properties includes the real property on which the building, structure, or site listed in the National or State Register is located, and not more than two acres of real property surrounding the building or site.
C) MILLAGE RATES: Local governments retain the authority to adjust the millage rates applied to the frozen assessments. Consequently, even though the owner has frozen the assessment, property taxes may fluctuate due to changes in the millage rate.
III. ATHENS CLARKE TOMORROW:
The Athens Clarke Tomorrow planning process put forward as one of the community's goals: Maintain and revitalize the heart of Athens and preserve the historical assets of the Athens area. It was specifically recommended that the community "develop incentives (e.g. tax abatement, loan funds, etc.) that encourage the adaptive re-use of older structures.@
With tax incentive programs, there must be state enabling legislation to allow the specific program enacted at the local level. At this time, as when the local ordinance was passed, the proposed Local Tax Abatement is the only known tax incentive for historic preservation allowed by enabling legislation.
IV. EDUCATION AND PUBLIC AWARENESS:
The Historic Preservation Commission in conjunction with the Athens Clarke Heritage Foundation has sponsored several educational workshops for the owners of property located within the locally designated historic districts. At these workshops, staff and volunteers provided information regarding the program and assisted the property owners with the Certification forms and locating the information required to complete the forms.
V. BUDGET:
The rise and fall of property assessments are, by their nature, difficult to predict. This, combined with the impossibility of predicting how many property owners will take advantage of this benefit, makes impossible attempts to predict, with accuracy, the impact of the program on future tax revenues. Because this is a tax assessment freeze, the only affect on county revenues will be the millage rate as applied to the difference between frozen assessment and the current. However, the preservation of historic districts and landmarks has recognized financial benefits for the entire community, benefits ranging from tourism and increasing property values to the improvement in the quality of life.
VI. SUMMARY OF PROPERTIES:
As of June, 1997, the Athens-Clarke County Planning Department had reviewed one hundred and one (101) applications with eighty-seven (87) approved, twelve (12) denied certification and two (2) returned to the property owner for more information. Please see attached spreadsheet (Appendix 3) for a list of those properties that have requested Certification. Properties not meeting the criteria were either 1) determined by the Historic Preservation Commission to be a non-contributing building within the historic district [five properties fell into this category] or 2) located in residential areas and found to have a non-conforming use (such as a duplex or multi-family use in a single family district) [seven properties fell into this category]. Staff is unable to determine the reason(s) why fourteen (14) of those who received Certifications from Athens-Clarke County have not submitted those documents to the County Tax Assessors= Commission. It is possible that these properties did not receive Certification from the Historic Preservation Division or that the property owners have chosen to wait to utilize this one-time only benefit, until a year when the freeze is more financially advantageous.
VII. PROCEDURE:
Any property owner may request the three certifications required in order to apply to the Athens-Clarke County Board of Tax Assessors for this Tax Abatement Program. The property owner may do so by providing the necessary information regarding the property to the Historic Preservation Commission, the Planning Department and the Historic Preservation Division of the Georgia Department of Natural Resources. While this information may be submitted in the form of a letter, Planning and Tax Assessor Staff has developed a series of four forms to assist in this process. These forms, found in Appendix 4, are for the following:
A) Landmark Historic Property Certification: This classification is defined in the Georgia Code, as a historic property having exceptional architectural, historic or cultural significance pursuant to a landmark ordinance which is of general application within such locality and has been approved as such by the state historic preservation officer. As Athens-Clarke County has such a landmark ordinance (the Athens-Clarke County Historic Preservation Ordinance) which has been approved as such by the state historic preservation officer (a requirement of the Certified Local Government (CLG) status maintained by Athens-Clarke County), the properties which are eligible are either those individually designated under the ordinance or identified as contributing to the locally designated historic districts. As a matter of process, the Historic Preservation Commission referred to the National Register Maps regarding the contributing/non-contributing status of buildings within a district. If the building is indicated as contributing and, after a site visit, staff is satisfied that no significant alterations have occurred to the building since designation, then staff is authorized to sign the Certification letter. If the building is listed as non-contributing, or if staff has concerns regarding alterations to the building, then staff is to present the property to the Historic Preservation Commission for their determination as to the contributing/non-contributing status of the property.
B) Listing in the National Register of Historic Places or the Georgia Register of Historic Places: The determination as to the Certification of a property as being listed in the National Register or the Georgia Register either individually or as a contributing resource within a district is made by the Historic Preservation Division of the Department of Natural Resources.
C) Zoning Certification: The determination that properties located within residentially zoned areas have a conforming use is made by the Planning Director. This decision is based on current land use information, as well a recommendation by the Historic Preservation Planner after a site visit. If, in the current land use information, the property is represented as being non-conforming, but the property owner disputes that information, then the owner may request a site visit by the Zoning Compliance Officer for a re-evaluation of the current uses. In two cases, this site visit has indicated that the use of the property had changed since the land use information was gathered and that the properties were now in compliance with the local zoning ordinance - as well as meeting the other requirements - and, consequently, was eligible for the Historic Property Tax Abatement.
The Planning Department Staff, after review of the requests for Certification, mails the Certification, or a letter explaining why the Certification was not issued, to the property owner. The Historic Preservation Division of the Georgia Department of Natural Resources in Atlanta does the same with the Certification regarding National or Georgia Register status. It is the owner=s responsibility to submit the Certifications to the Tax Assessor=s Office [See 48-5.7.3(c) of the Georgia Code regarding Landmark historic property (p. 75)].
VIII. CONCLUSIONS
The ordinance that was ultimately adopted was within the parameters of the state law. The state law does not require renovation work in order to receive preferential assessment.
It is staff=s opinion that this program has been very successful in Athens-Clarke County and has been an important tool in the pursuit of the goals mentioned in this report. In particular, staff would call to the attention of the Mayor and Chair and Commission the fact that, since the inception of the program, property owners in two districts (Dearing Street and Cloverhurst/Springdale) as well as those of several individual landmark buildings have petitioned the Historic Preservation Commission to begin the designation process under the Historic Preservation Ordinance. Conversations with representatives of the district indicate that the Local Historic Property Tax Abatement program was an important consideration in their decision to pursue designation at this time.
If the Commission would desire to modify the current ordinance establishing the Local Historic Property Tax Abatement program, staff would suggest that the Mayor and Chair and Commission direct staff:
1) To develop a list of options, and to investigate and analyze the implications of changes to the program; and
2) Solicit a recommendation from the Athens-Clarke County Historic Preservation Commission regarding results of item 1.
OPTIONS:
N/A
RECOMMENDED ACTION:
N/A
DEPARTMENT: Planning
Director
ADMINISTRATIVE COMMENTS:
ADMINISTRATIVE RECOMMENDATION:
DATE:
Manager
APPENDIX 1
STATE LEGISLATION ESTABLISHING PREFERENTIAL CLASSIFICATION AND ASSESSMENT OF THE LANDMARK HISTORIC PROPERTY. (48-5-7.3.)
APPENDIX 2
MINUTES FROM THE CEO AND COMMISSION MEETING INCLUDING THE TEXT OF THE LOCAL ORDINANCE
APPENDIX 3
ATHENS-CLARKE COUNTY HISTORIC PROPERTY TAX ABATEMENT
SPREADSHEET
APPENDIX 4
APPLICATION FORMS FOR THE HISTORIC PROPERTY TAX ABATEMENT