|
Getting your Trinity Audio player ready...
|
To the untrained eye, 1052 Edgewood Road is a long, flat house with a grassy yard.
To a Redwood City historian, the 4,000-square-foot single-story is a relic, a nod to the sprawling ranch architecture that defined California in the mid-1900s.
The property, now valued at over $5 million, has received nearly $340,000 in tax savings since 2014 under the Mills Act, a state law designed to spur historic preservation.
Adopted by Redwood City in 1990, the law allows cities to grant property tax reductions of typically 40% to 60% to owners who agree to restore and maintain buildings deemed historically significant.
Mills Act contracts have a 10-year term and automatically renew each year unless the city or the property owner cancels them. The agreements also transfer with the property if it sells. In over three decades, only one contract in Redwood City has been cancelled.
Today, 41 properties hold Mills Act contracts, including 1052 Edgewood Road.
In Redwood City, the tax incentive has recently fueled debate over whether historic preservation is worth the public cost. Critics say the program shifts tax revenue from city services and schools while relying largely on homeowners to self-report improvements meant to justify the savings.
For the first time, the Redwood City Council voted 6-1 Monday to immediately suspend new Mills Act applications while it reviews how the program is administered.
This pause comes just three months after the Redwood City Council approved four new Mills Act properties on Dec. 8, the most the city has ever approved at once. City records and contracts reviewed by the Pulse show gaps in how the program is structured, scrutinized and enforced.
Mills Act monitoring and mechanics
City staff must inspect all active Mills Act properties at least once every five years. Redwood City conducted those inspections in 2025, though interior inspections “were not determined necessary,” according to a December city report.
A property qualifies if it reflects “special elements” of the city’s cultural, aesthetic or architectural history; is associated with significant people or events; embodies distinctive characteristics of a style or period; or represents notable work by a builder, designer or architect, according to Redwood City’s Historical Preservation Ordinance.
Glenn Babbitt, vice chair of the Historic Resources Advisory Committee, said he interprets those criteria by looking for properties that “tell a story” about the city.
Babbitt acknowledged that in the past, he was not sure whether the Historic Resources Advisory Committee “followed up” with Mills Act property inspections “as well as we could have,” though he said he believes the program’s participants have largely acted in good faith.
Currently, the city’s enforcement tools are limited to contract revocation and litigation, and there is no established timeline for cancelling contracts should owners fail to submit their annual improvement reports, Nick Mathiowdis, the city’s communications manager, said.
Some contracts contain little detail about expected improvements.
Before 2012, many Mills Act contracts lacked a yearly schedule for improvements, the city said in December. The contract for 2236 Hopkins Ave., approved in 2007 and still active, states “Year 7” twice and then skips to “Year 10,” with improvements described in only a few words, such as “rear yard landscaping.”
Even after the city began expecting more detailed schedules in 2012, some contracts remain vague. At 221 Standish St., for example, “maintenance of trees and landscaping as necessary” is listed as the only intended improvement for 2025 and 2028.
Rogelio Barrera, owner of a Redwood City heritage landscaping firm, said that historic landscaping often requires little maintenance because many plants are native. Even on a large one-acre property, he estimated landscaping costs would likely remain under $15,000 per year.
City records also show gaps in reporting. Many Mills Act contracts fail to detail improvement plans by year, and only 80% of property owners submitted the required improvement reports in 2024, the most recent reporting period. Many of those reports were incomplete.
At 1052 Edgewood Road, the contract skips improvement years entirely—2015, 2016, 2018 and 2021.
Some Mills Act participants have also been accused of exaggerating the cost of improvements. City records show the owner of 1052 Edgewood reported spending $150,000 to paint the home, while a local painter, Melvin Painting, told the Pulse the job would likely cost less than $20,000. The homeowner declined to confirm the price tag when contacted by the Pulse.
In other cases, planned improvements appear unrelated to historic preservation. The 2019 contract for 1633 Hopkins Ave. lists “check and replace smoke detectors” and “dryer lint clean out” as improvements for nearly every year of the agreement.
At the Dec. 8 City Council meeting, resident Andrew Ryan criticized these entries, calling them “completely invalid.”
Typically, the Redwood City Council approves one to two properties each year for this program. The council’s decision on Monday pauses new applications while the city updates its Historic Preservation Ordinance, which Senior Planner Ryan Kuchenig estimated would push the soonest application deadline back to July 1, 2028.
In January, city staff determined that there was not “sufficient time” to develop guidance for new applicants and have it reviewed by city leadership within four months, before this year’s July 1 application deadline, the city’s communications manager said.
The cost
The Mills Act is an economic incentive program that encourages private property owners to restore and preserve historic buildings. Today, 41 homeowners in Redwood City receive property tax reductions of typically 40% to 60%, saving some participants up to $44,000 a year.
While the Redwood City Council has the final word on approving a property for the Mills Act, the Historic Resources Advisory Committee does most of the legwork. The committee evaluates whether properties qualify as historic and reviews proposed changes before advising the Planning Commission.
Since the program began about 36 years ago, the Historic Resources Advisory Committee has rejected only two of the applications it has reviewed, the city’s communications manager said.
Redwood City has followed the “minimum standards” for its Mills Act program, allowed under state law, according to a staff report. That means the city’s ordinance does not impose additional requirements on contract details, inspection frequency, tax discount caps, or the number of applications accepted each year.
For the 2025 tax year, Mills Act property owners in Redwood City will save a total of $613,000 in property taxes. That will reduce the city’s revenue by $123,000 and the local school districts’ revenue by $313,000.
Mike Wells, a trustee on the Redwood City School District Board, said at the Dec. 8 meeting that while the Mills Act can provide “some real value” in preserving historic properties, the program ultimately represents a “value trade-off,” particularly because local schools rely heavily on property taxes rather than state funding.
Redwood City Council member Marcella Padilla raised similar concerns in December.
“I pay full property taxes, I send my child to public school, and I make improvements on my home,” Padilla said. “History is wonderful, but our schools are falling apart.”
The Redwood City School District has already seen major funding cuts since the summer, over $12 million. The additional loss in property tax revenue affects funding for classroom instruction, student services and support staffing, according to Jorge Quintana, RCSD’s director of communications.
As a locally funded school district, RCSD primarily relies on local property tax revenue rather than state funding. There is no state backfill when property tax revenue is reduced, Quintana said.
In the absence of student speakers in December, Padilla said she felt compelled to “advocate for them,” pointing to classrooms that reach 100 degrees Fahrenheit, uncontained sewage and other unmet needs in the Redwood City School District.
City officials say the impact of the Mills Act on the municipal budget is evaluated “holistically,” during the annual budget process.
Still, the city’s February budget report projected annual shortfalls, up to $19.7 million beginning in fiscal year 2028-29, prompting officials to consider tapping reserves earlier than expected.
Jon Goldman, chair of the city’s Historic Resources Advisory Committee, said in December that the financial implications of the program are largely outside the committee’s purview.
“Some of the tax savings numbers are a bit of a surprise to me,” Goldman said, adding that the committee is “more in the preservation business than the tax business.”
Council questions the program’s future
For the first time in at least 15 years, the City Council discussed the adoption of a work plan to revisit how the Mills Act is administered in Redwood City at its December meeting — mounting discussion over whether the tax incentive intended to preserve historic buildings has drifted from its original purpose.
Vice Mayor Kaia Eakin, a former member of the Historic Resources Advisory Committee and a vocal supporter of historic preservation, downplayed the program’s fiscal impact. Before the council approved the four new properties, Eakin said, “we’re not talking about a lot of money” in terms of the tax reduction.
Mills Act savings account for about 0.6% of the city’s total revenue and affect the city’s budget holistically, city officials said.
Council member Chris Sturken raised concerns about the automatic renewal after the initial 10-year term, noting that property owners receive a “tax break” without committing to ongoing historic preservation.
Council members Jeff Gee and Diane Howard agreed that inspections should be conducted more frequently, while Isabella Chu suggested requiring property owners to update the council with improvement plans after the first decade.
Sturken and Chu questioned who has benefited most from the program, noting that most Mills Act contracts have been for single-family homes in some of Redwood City’s most affluent neighborhoods.
Chu said she has long been ambivalent about the Mills Act and still has “misgivings” about offering “very large tax breaks” to homeowners in neighborhoods that are “well able to pay for these kinds of improvements themselves.”
Chu and Sturken ultimately voted against approving the four new contracts.
Among the addresses approved was 839 Blandford Blvd., owned by Hunter Volk, who told the council he hopes to pass the home to future generations. When asked whether his children attend local public schools, he said they do not.
Steve Pierce, owner of 1018 and 1020 Main St., argued his buildings are a “hit in spades” for the program, noting they were built in 1857 and are open to the public. He added that The Yard Coffee at 1018 Main St. generates sales tax revenue that helps offset the tax break.
The application process typically costs around $6,500, though roughly 88% of those costs the city subsidizes through its General Fund. This excludes the private costs of hiring historical consultants.
The General Fund is now projected to end the fiscal year 2025-26 with a negative unassigned fund balance of $1.2 million. Last summer, city staff expected the term would end in the green.
All but one application has been approved.
While several council members discussed modifying the Historic Resources Advisory Committee work plan and delaying the approval of the four new contracts in December, a majority said they were uncomfortable with “changing the rules after someone has applied,” as Gee said.
Council presses pause
At the council’s Monday meeting, city staff delivered a brief presentation on its request to suspend accepting new Mills Act applicants, without acknowledging specific issues with the program or its enforcement.
Kuchenig, who helmed the presentation, noted the Historic Preservation Ordinance and Mills Act process is undergoing an “extensive update” and shared its “potential areas of study.”
Possible changes include establishing clearer 10-year contract guidelines that detail qualifying improvements; creating a formal renewal process after the initial contract period; setting limits on property tax reductions; increasing inspection frequency; introducing property value thresholds; requiring improvements that meet or exceed the tax benefit; setting visibility requirements for qualifying properties; limiting the number of contracts approved each year; and establishing fines for noncompliance.
City officials say they are also studying how other California cities administer the program as Redwood City considers potential reforms. By comparison, San Francisco has just 48 active Mills Act contracts.
Babbitt, the vice chair of the Historic Resources Advisory Committee, offered public comment to denounce the suspension of new Mills Act applicants, noting that the act is “helping families of modest means to do something that we actually want, historic preservation.”
Because the Mills Act application period begins on July 1 each year, staff predicts the pause on applications will last until Fall of 2027, with the soonest deadline falling in July of 2028. The review is expected to involve the Historic Resources Advisory Committee, Planning Commission, the City Council and an outsourced consultancy for the study.
Council member Jeff Gee requested the commission “get it done sooner,” calling for a December 2027 date-certain for the city’s updates to the Historic Preservation Ordinance and Mills Act Contract program, plus six-month progress reports. The council approved his amendment.
Eakin, the only council member to vote against the suspension, defended the Mills Act and historic preservation more broadly, drawing a historical analogy.
“These buildings have what’s called, ‘character defining features,’” Eakin said. “If you’re standing there, you know you’re not in Century City surrounded by 100 high rises — you know you’re someplace special.”
She then invoked the reign of King Louis XI in France.
“There were a lot of poor people at that time,” Eakin said. “If all [the king] cared about was money, he never would have commissioned a young Mozart to write ‘Happy Birthday.’”
Council member Isabella Chu pointed to the history of the Mills Act in underscoring why she thinks it’s been misappropriated in Redwood City. California voters approved the act in 1976 to “save” the Coronado Hotel in San Diego, she said, when “disinvestment and demolition of historic resources was a widespread problem.”
“If a family can afford to buy a home in Silicon Valley these days,” Chu noted, “they typically have resources, and typically would intend to improve the property, with or without the Mills Act.”
The council member encouraged the council and staff to consider how to best leverage the Mills Act where restoration would otherwise not take place, and to optimize the program as a public good.
Preservation experts weigh in
Christopher Ver Planck of Ver Planck Historic Preservation Consulting said he often advises owners of historic homes to pursue Mills Act contracts because the program can help offset the high cost of restoring older properties.
“It’s not supposed to subsidize wealthy people buying expensive real estate,” Ver Planck said, “which is oftentimes how it’s used or abused.”
That’s part of his reasoning for deeming about 10% of the properties he’s evaluated historic. He’s especially encouraging of folks who are house-rich, cash-poor to apply.
“What I do is not a science,” Ver Planck said, describing the field of historic evaluation as “fairly arcane,” with differing interpretations of designation criteria.
In the last few months, four additional homeowners have expressed interest in filing a Mills Act application for 2026, the city said, but have been notified of the potential pause.
For now, the city’s 41 active Mills Act contracts will stay as is, though city staff acknowledged further study will determine how potential reforms could affect existing participants.
In weighing whether a property is worthy of the Mills Act benefits, Babbitt, the vice chair of the Historic Resources Advisory Committee, said, “it’s difficult to quantify” the value of the city’s history.
“The past and the present,” Babbitt said, “are always in negotiation about the future.”
Editor’s note: This story has been updated to clarify that projected property tax revenue losses are shared among local school districts, note that planning staff — not the Planning Commission — presented the proposal to suspend new Mills Act applications, and clarify the timeline for the city’s review of its Historic Preservation Ordinance.
