REPORT TO COUNCIL
SUBJECT
Title
Action on a Historical Preservation Agreement (Mills Act Contract) (File No. PLN26-00042) for 1261 Jackson Street
Report
SUMMARY
Property owners Lili Jiang and Xi Yang have filed a Historical Preservation Agreement (Mills Act Contract) (File No. PLN26-00042) request for the property located at 1261 Jackson Street. The subject property is an approximately 5,500 square-foot lot located on the east side of Jackson Street and is not currently listed on the City’s Historic Resource Inventory (HRI). Upon the approval of the Mills Act contract, the property will be added to the City’s HRI.
On June 4, 2026, the Historical and Landmarks Commission (HLC) held a regularly scheduled meeting and recommended approval (7-0 vote) of the contract to the City Council.
BACKGROUND
Enacted in 1972, the California Mills Act legislation allows participating local governments the authority to offer property tax relief to owners of qualified historic properties. The City of Santa Clara participates in the Mills Act Program and enters into Mills Act contracts with property owners who agree to restore, maintain, and protect the property’s historic character in exchange for a potential reduction in property taxes. 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.
Property owners Lili Jiang and Xi Yang have filed a Historical Preservation Agreement (Mills Act Contract) (File No. PLN26-00042) request for the property located at 1261 Jackson Street. The property owners submitted the requisite application, including an updated historic survey (Department of Parks and Recreation DPR 523A Form) of the property, a Statement of Justification for the request, and a 10-Year Restoration and Maintenance Plan outlining the proposed workplan to restore, rehabilitate, and maintain the property.
The subject site is not currently listed on the City’s Historic Resource Inventory. Upon the approval of the Mills Act contract, the property will be added to the City’s HRI.
The subject property is an approximately 5,500 square-foot lot located on the east side of Jackson Street. Constructed in 1898, the existing residence on the property is designed in the Queen Anne architectural style. There have been only minor alterations to the home's exterior since it was constructed in 1898. The windows were replaced, and the porch on the left (north) side of the house was altered to add a new set of stairs and a landing. The majority of the visual and character defining materials and features of the historic building have been preserved and retained. Its Queen Anne style reflects Santa Clara’s early architectural era.
The 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 June 4, 2026, the HLC held a regularly scheduled meeting and recommended approval (7-0 vote) of the contract to the City Council. The staff report for that meeting is provided in Attachment 2.
If approved, this would be the first Mills Act Contract for this calendar year, where 10 are permitted.
DISCUSSION
In March 2026, Lorie Garcia of Beyond Buildings (Evaluator) prepared a DPR 523A Form assessing the subject property's historical significance under National, State, and local criteria. The evaluation found that the structure at 1261 Jackson Street is well maintained and that the design elements conveying its architectural integrity remain intact. Based on these findings, the Evaluator concluded that the property retains sufficient historic character and appearance to qualify 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 exterior restoration, restoration of traditional wood double-hung windows, roof maintenance and repairs, preservation of original moldings and trim, and foundation repairs. 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 in conformance with the Secretary of the Interior’s 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 $1,664,640 (06/30/2026 information), and the annual property tax is approximately $19,446 (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 $389 to $1,361. 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
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 and 10-Year Restoration and Maintenance Plan associated with the property at 1261 Jackson Street in a final form approved by the City Attorney.
Staff
Reviewed by: Afshan Hamid, Director, Community Development Department
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Mills Act Contract
2. HLC Staff Report June 4, 2026
3. Statement of Justification