REPORT TO COUNCIL
SUBJECT
Title
Action on a Historical Preservation Agreement (Mills Act Contract) (File No. PLN25-00350) for 1458 Lexington Street
Report
COUNCIL PILLAR
Promote and Enhance Economic Housing and Transportation Development
BACKGROUND
On behalf of property owners Cameron Carty and Rachel Law, Robert Mayer (“applicant”) filed a request for a Historical Preservation Agreement (Mills Act Contract) (File No. PLN25-00350) for the property located at 1458 Lexington Street. Enacted in 1972, the California Mills Act legislation grants participating local governments the authority to enter into contracts with owners of qualified historic properties who actively participate in the restoration and maintenance of their historic properties while receiving property tax relief. Santa Clara participates in the Mills Act Program. A requirement of the Mills Act Contract is that the building must be a qualified structure, listed on either a local, State, or National register. The subject site is currently listed on the City’s Historic Resource Inventory (HRI).
The subject property is approximately 7,500 square-foot lot located on the south side of Lexington Street. Constructed in 1899, the existing residence on the property is designed in the National architectural style. The house is set back from the street, featuring a lawn, ornamental shrubs, and a concrete walkway leading to the entrance porch. Its National style reflects Santa Clara’s early architectural era.
The property owners submitted the requisite application, including an updated historic survey (Department of Parks and Recreation DPR 523A Form) of the property (Attachment 1), a Statement of Justification for the request (Attachment 3), and a 10-Year Restoration and Maintenance Plan for evaluation of the proposed workplan to restore, rehabilitate, and maintain the property (Attachment 1).
The Historical and Landmarks Commission (HLC) provides Mills Act Contract recommendations to the City Council for their final determination. Approved contracts are executed between the City and the property owner and recorded with the County for a minimum ten-year term. Contracts are automatically renewed each year and are transferred to new owners when the property is sold.
On October 2, 2025, the HLC held a regularly scheduled meeting and recommended approval (6-0 vote, with Commissioner Leung absent) of the contract to the City Council. The staff report for that meeting is provided in Attachment 2.
DISCUSSION
In August 2025, William Kostura of Kostura Architectural History prepared a DPR 523A Form assessing the property's historical significance under National, State, and local criteria. The DPR 523A Form was updated in October 2025 to reflect the proposed changes by Lori Garcia, City Historian, shifting the architectural style designation from Pioneer to National. The evaluator found that the structure at 1458 Lexington Street is well maintained and that the design elements that comprise the architectural integrity of the structure have not been diminished. The evaluator concluded that the property continues to retain enough of its historic character and appearance to be recognizable as a historic resource on the City’s HRI.
The property owners submitted a Statement of Justification and a 10-Year Restoration and Maintenance Plan. The plan includes plumbing and electrical upgrades, improved drainage near the foundation, seismic reinforcement, exterior painting, replacement of aluminum windows with wood-framed versions, restoration or repair of historic wood window sashes, and interior door and trim upgrades. The owners acknowledge that some work may overlap to support the overall improvement plan. All work will be evaluated through Significant Property Alteration permits, as required by the Historic Preservation Ordinance.
Staff finds that the work proposed in the 10-Year Restoration and Maintenance Plan adheres to the Secretary of the Interior’s Standards for Rehabilitation. The proposed improvements, and the owner’s statement of justification, support the preservation, protection, and maintenance of a locally designated significant structure.
ENVIRONMENTAL REVIEW
A Mills Act Contract is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15331 of the CEQA Guidelines (Class 31 - Historical Resource Restoration / Rehabilitation). This exemption consists of projects limited to maintenance, repair, stabilization, rehabilitation, restoration, preservation, conservation, or reconstruction of historical resources in a manner consistent with the Secretary of the Interior Standards. Entering into the contract will result in the restoration and rehabilitation of the 1899 structure consistent with the Secretary of the Interior Standards.
FISCAL IMPACT
The amount of the property tax reduction depends on the property, location, size, and comparable properties in the area. Currently, the assessed value of the property is approximately $1,500,000 (06/30/2025 information), and the annual property tax is approximately $17,885 (2025/26 value) (Source: Santa Clara County Assessor’s Office). The City receives approximately 10% of the base property tax. The Mills Act Contract tax reduction is based on an income capitalization method (ICM) calculation based on the average monthly rent, average maintenance costs, and an amortization schedule to arrive at a reduced appraisal value, resulting in lower property taxes. The anticipated tax reduction would be 20% to 70% based on the County’s evaluation of the property’s age, condition, and local market value factors in accordance with the formula set by state law. Based on the latest information available, the estimated annual fiscal impact to the City for this individual Mills Act Contract would be a decrease of property tax revenue in the range of $358 to $1,252. The actual future fiscal impact may be greater due to the reassessment of property value by the County upon transfer of ownership.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Based on the Historical & Landmarks Commission recommendation to City Council and adherence to the Secretary of the Interior’s Standards for Rehabilitation, staff recommends City Council approval of the request as follows:
1. Determine that the project is categorically exempt from CEQA pursuant to CEQA Guidelines Section 15331 (Class 31 - Historical Resource Restoration / Rehabilitation); and
2. Authorize the City Manager to execute a Mills Act Contract in a final form approved by the City Attorney and adopt the 10-Year Restoration and Maintenance Plan associated with the property at 1458 Lexington Street.
Staff
Reviewed by: Afshan Hamid, Director, Community Development Department
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Mills Act Contract, Property Description, 10-Year Restoration Plan
2. HLC Staff Report October 2, 2025
3. Statement of Justification