2.48.080 Evaluation of economic impact.
A. At the public hearing on any application for a Type II or Type III certificate of appropriateness, or Type I if referred to the Board by the Historic Preservation Officer, the Board shall, when requested by the property owner, consider evidence of the economic impact on the owner of the denial or partial denial of a certificate. In no case may a certificate be denied, in whole or in part, when it is established that the denial or partial denial will, when available incentives are utilized, deprive the owner of a reasonable economic use of the landmark and there is no viable and reasonable alternative which would have less impact on the features of significance specified in the preliminary determination section of the designation report.
B. To prove the existence of a condition of unreasonable economic return, the applicant must establish, and the Board must find, both of the following:
1. The landmark is incapable of earning a reasonable economic return without making the alterations proposed. This finding shall be made by considering, and the applicant shall submit to the Board evidence establishing, each of the following factors:
a. The current level of economic return on the landmark as considered in relation to the following:
i. The amount paid for the landmark, the date of purchase, and party from whom purchased, including a description of the relationship, if any, between the owner and the person from whom the landmark was purchased;
ii. The annual gross and net income, if any, from the landmark for the previous five years; itemized operating and maintenance expenses for the previous five years; and depreciation deduction and annual cash flow before and after debt service, if any, during the same period;
iii. The remaining balance on any mortgage or other financing secured by the landmark and annual debt service, if any, during the prior five years;
iv. Real estate taxes for the previous four years and assessed value of the landmark according to the two most recent valuations;
v. All appraisals obtained within the previous three years by the owner in connection with the purchase, financing or ownership of the landmark;
vi. The fair market value of the landmark immediately prior to its designation and the fair market value of the landmark (in its protected status as a designated landmark) at the time the application is filed;
vii. Form of ownership or operation of the landmark, whether sole proprietorship, for profit or not-for-profit corporation, limited partnership, joint venture, or both;
viii. Any state or federal income tax returns on or relating to the landmark for the past two years.
b. The landmark is not marketable or able to be sold when listed for sale or lease. The sale price asked, and offers received, if any, within the previous two years, including testimony and relevant documents, shall be submitted by the property owner. The following also shall be considered:
i. Any real estate broker or firm engaged to sell or lease the landmark;
ii. Reasonableness of the price or lease sought by the owner;
iii. Any advertisements placed for the sale or lease of the landmark.
c. The unfeasibility of alternative uses that can earn a reasonable economic return for the landmark as considered in relation to the following:
i. A report from a licensed engineer or architect (each with experience in historic restoration or rehabilitation) as to the structural soundness of the landmark and its suitability for restoration or rehabilitation;
ii. Estimates of the proposed cost of the proposed alteration and an estimate of any additional cost that would be incurred to comply with the recommendation and decision of the Board concerning the appropriateness of the proposed alteration;
iii. Estimated market value of the landmark in the current condition after completion of the proposed alteration; and, in the case of proposed demolition, after renovation of the landmark for continued use;
iv. In the case of proposed demolition, the testimony of an architect, developer, real estate consultant, appraiser or other real estate professional experienced in historic restoration or rehabilitation as to the economic feasibility of rehabilitation or reuse of the existing landmark;
v. The infeasibility of new construction around, above, or below the historic resource.
d. Potential economic incentives and/or funding available to the owner through federal, state, county, City or private programs.
2. The owner has the present intent and the secured financial ability, demonstrated by appropriate documentary evidence, to complete the alteration.
C. Notwithstanding the foregoing enumerated factors, the property owner may demonstrate other appropriate factors applicable to economic return.
D. Upon reasonable notice to the owner, and subject to the availability of funds budgeted for that purpose and approval of the expenditure by the City Council, the Board may appoint and hire an expert or experts to provide advice and/or testimony concerning the value of the landmark, the availability of incentives and the economic impacts of approval, the potential for public acquisition, denial or partial denial of a certificate of appropriateness.
E. Any adverse economic impact caused intentionally or by willful neglect shall not constitute a basis for granting a certificate of appropriateness. [Ord. 578 § 1, 2014; Ord. 251 § 1, 2000.]