REPORT TO COUNCIL
SUBJECT
Title
Action to Set January 27, 2026 for a Public Hearing to Consider Cancellation of two Mills Act Contracts
Report
BACKGROUND
The Mills Act is an economic incentive program designed to encourage the restoration and preservation of qualified historic buildings by private property owners. Enacted in 1972, the legislation authorizes participating local governments to enter into contracts with owners of eligible historic properties. In exchange for property tax relief, owners agree to actively maintain and restore their properties.
The Planning Division of the Community Development Department administers the Mills Act program for the City of Santa Clara. As part of the program, the City conducts audits of Mills Act properties every five years to ensure compliance with approved ten-year restoration plans. The last audit was conducted in 2017; however, the scheduled 2022 audit was postponed to 2024 due to the COVID-19 pandemic.
During the audit, property owners are required to submit documentation demonstrating compliance with their restoration plans. Acceptable documentation includes receipts, invoices, photographs, and other records of eligible improvements and maintenance work.
At the conclusion of the 2024/2025 Mills Act Audit, two property owners failed to provide the required documentation or respond. As a result, contract termination proceedings are being initiated for both non-responsive properties.
DISCUSSION
Upon entering into a Mills Act Contract, property owners sign a Historic Property Preservation Agreement with the City, which is also recorded with the County. This agreement requires owners to furnish any information requested by the City to verify compliance and outlines both nonrenewal and termination procedures.
There are currently 132 Mills Act properties in the City of Santa Clara. As part of the 2024/2025 audit process, all property owners were contacted via mail and/or email and asked to submit self-reported documentation, such as invoices, photographs, and written descriptions of work completed. Notifications were sent to both the property address and the owner’s mailing address, as verified through Santa Clara County assessment records, when different. Property owners were also offered the option to schedule an on-site inspection in lieu of submitting documentation.
For those who did not respond to the initial outreach, City staff made additional efforts, including follow-up phone calls, certified mail, and attempted in-person delivery of notices by Code Enforcement staff. Despite these efforts, four property owners remained non-responsive or failed to submit any documentation.
The non-responsive properties are as follows:
• 1711 Main Street
• 906 Monroe Street / 1341 Homestead Road (currently bank-owned)
In accordance with the Historic Property Preservation Agreements, the City may cancel these contracts following a duly noticed public hearing, as outlined in California Government Code Section 50284. This statute requires the City Council to first set a date to hold a public hearing for considering the contract terminations, and then provide the affected property owners with a chance to be heard. Prior to the hearing, mailed notices must be sent to the affected owners, and a hearing notice must be published in the Santa Clara Weekly.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
There is no fiscal impact associated with this report. If the Mills Act contracts are cancelled, the City will notify the County of the properties that would no longer receive the associated property tax relief. For the City of Santa Clara, the annual relief amounts for the two properties range from approximately $53 to $353 (2024/25 value) (Source: Santa Clara County Assessor’s Office).
COORDINATION
This report was coordinated with 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.
Mailed notices were sent to the affected property owners in advance of this initial hearing to set the future contract termination hearing date. Additional mailed notices will be sent to the affected owners prior to the January 27, 2026 hearing, and a hearing notice will be published in the Santa Clara Weekly.
RECOMMENDATION
Recommendation
Set January 27, 2026 for a Public Hearing to consider termination of two Mills Act Contracts for the properties located at 1711 Main Street and 906 Monroe / 1341 Homestead Road for non-compliance with Mills Act requirements.
Staff
Reviewed by: Afshan Hamid, Director, Community Development Department
Approved by: Jovan Grogan, City Manager