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Res 45-14 RESOLUTION NO. 45-14 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, GRANTING AN AD VALOREM TAX EXEMPTION TO JOHN KOLKMEYER AND VIRGINIA L. RITTER, FOR THE HISTORIC REHABILITATION OF THE PROPERTY LOCATED AT 101 NE 5T" STREET, AS FURTHER DESCRIBED HEREIN; DETERMINING THAT THE COMPLETED IMPROVEMENTS ARE CONSISTENT WITH LAND DEVELOPMENT REGULATION (LDR) SECTION 4.5.1g); PROVIDING AN EFFECTIVE DATE. WHEREAS, the Historic Preservation Program of the City of Delray Beach, Florida (the "City"), is designed to preserve, protect, enhance, and perpetuate resources which represent distinctive and significant elements of the City's historical., cultural, social, econorni.c, political, archaeological, and architectural identity; and/or serve as visible temindets of the City's culture and heritage; and WHEREAS, the citizens of Florida amended the Florida Constitution, Article VII, Section 3, to authorize counties and municipalities to grant a partial ad valorem tax exemption to owners of historic properties for improvements to such properties which are the result of the restoration, renovation, or rehabilitation of the historic properties; and WHEREAS, the City of Delray Beach City Commission has approved an otdinance providing for an ad valorem tax exemption for the restoration, renovation, and/or improvement of historic properties (Ordinance No. 50-96); and WHEREAS, the ad valorem tax exemption is one means of offering a financial incentive to increase interest in restoring,renovating,and improving the City's historic structures; and WHEREAS, Ordinance No. 50-96 provides that on completion of the review of a Final Application/Request for Review of Completed Work, the Historic Preservation Planner shall present such Final Application in a regularly scheduled meeting of the Historic Preservation Board and shall recommend that the Historic Preservation Board grant or deny the exemption;and WHEREAS, the ptopetty owners filed a Historic Property Ad Valorem Tax Exemption Application for review by the Historic Preservation Board on August 6, 2014, of an ad valorem tax exemption for the historic restoration,renovation, and improvement of the property located at 101 NE 5t' Street, and the Historic Preservation Board determined that the completed improvements were consistent with LDR Section 4.5.1j) and recommended approval to grant an ad valorem City tax exemption to John Kolkineyer and Virginia L. Ritter for the restoration, renovation, and improvement to the property located at 101 NE 5 h Street. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA,AS FOLLOWS: Section 1. The City Commission hereby determines that the completed improvements to the property located at 101 NE 5' Street, as described in the application for ad valorem tax exemption filed with the City, were consistent with LDR Section 4.5.1 Q). Section 2. The City Commission hereby approves an ad valorem tax exemption to the property owners, John Kolkineyer and Virginia L. Ritter, for a ten year period, commencing on 1/1/15, from that portion of ad valorem taxes levied on the increase in assessed value, between the years 1/1/15 -- 12/31/24, resulting from the renovation, restoration, and rehabilitation of the property located at 101 NE 5ffi Street, which property is legally described as follows and which improvements are described in HPB Certificate of Appropriateness No. 2013--187: Lots 12 and 13, Block 5,Del-Ida Park, an addition to the City of Delray Beach,Florida, and that part of Lot 10, Block 5, Del-Ida Park, more particularly described as follows: Beginning at a point in the North line of Coolidge Avenue, (as shown on the plat of Del-Ida Park), which point is 35.84 feet West of the Southeast Corner of said Lot 10 for a point of beginning thence run North at a 90° angle to said North line of Coolidge Avenue a distance of 85.35 feet to a point; thence Run Northeasterly at an angle. of 112°38', a distance of 15.54 feet to a point in the Southwesterly line of Lot 9, thence run southeasterly at an angle of 113°7'53" a distance of 30 feet along the said Southwesterly line of Lot 9, to the Southeast cornet of said Lot 9, thence run south at an angle of 134°14'07'a distance of 70.91 feet along the East line of said Lot 10 to a point on the North line of Coolidge Avenue, thence run West along the said North line of Coolidge Avenue, a distance of 35.84 feet to the point of beginning (excepting the West 5 feet therefrom), all according to the plat thereof, recorded in the office of the Clerk of the Circuit Clerk in and for Palm Beach County,Florida,In Plat Book 9, Page 52. I Section 3. Prior to the ad valorem tax exemption described herein being effective, John Kolkmeyet and Virginia L. Ritter,. shall execute and record a restrictive covenant in a form established by the State of Florida, Department of State., Division of Historical Resources, requiting the qualifying improvements be maintained during the period that the tax exemption is granted. A copy of the recorded covenant shall be provided to the City's Historical Preservation Planner. Section 4. This resolution shall take effect in accordance with law. PASSED AND ADOPTED in regular session on the 16`h d o Se to b 2014. ATTEST: MAYOR N�h& ity Clerk vel 2 Res No. 45-14 Coversheet Page 1 of 2 • MEMORANDUM TO: Mayor and City Commissioners FROM: Planning and Zoning THROUGH: Terry Stewart, Interim City Manager DATE: August 28, 2014 SUBJECT: AGENDA ITEM 8.A.-REGULAR COMMISSION MEETING OF SEPTEMBER 16,2014 RESOLUTION 45-14(TAX EXEMPTION REQUEST FOR ELIGIBLE IMPROVEMENTS/101 N.E.5TH STREET) BACKGROUND The item before the City Commission is approval of a tax exemption request for improvements to the property located at 101 NE 5th Street, a contributing property within the Del-Ida Park Historic District. The subject property is irregularly shaped and fronts on both Fern Court and NE 5th Street. The .42 acre site originally contained a circa 1925, 1,174 square foot Mission style residence along with a detached single-car garage. In 2013, additions and alterations were approved for a rear kitchen addition/expansion, and addition of a home office and master suite walk-in closet. The total added square footage measures approximately 350 square feet. All new, impact-rated windows were installed throughout the structure, and the flat roof was refinished. Site improvements include additional landscaping and fencing. ANALYSIS The improvements, both interior and exterior, are complete, and a Certificate of Occupancy (CO) was issued on June 30, 2014. The applicant is now applying for tax exemption status for those improvements. The HPB considered the tax exemption request at their August 6, 2014 meeting and unanimously recommended approval of the Ad Valorem Tax Exemption Application. The tax exemption will apply only to the difference in assessed value after the eligible property improvements. The applicant is now before the City Commission for final approval of the exemption request. If approved, the request will be forwarded to the Palm Beach County Property Appraiser's Office and the Palm Beach County Planning and Zoning Department for recordation and final appraisal of the improvements. Additional background and an analysis of the request are provided in the attached HPB Memorandum Staff Report. http://itwebapp/Agendalntranet/Bluesheet.aspx?ItemID=8354&MeetingID=523 10/2/2014 Coversheet Page 2 of 2 The request contains qualifying improvements under LDR Section 4.5.1(J) and is compliant with the City's Land Development Regulations, the Historic Preservation Design Guidelines, and the Secretary of the Interior's Standards for Rehabilitation. Pursuant to LDR Section 4.5.1(J)(7)(d)b., upon approval of the Historic Property Tax Exemption Application by the Historic Preservation Board, the application shall be placed by resolution on the agenda of the City Commission for approval. The expenditures associated with the qualifying improvements total approximately $96,000. The tax exemption will be limited to the increase in assessed value (as determined by the Palm Beach County Property Appraiser) resulting from the subject improvements and provide an abatement of taxes on the City and County portions for a period of ten years from the date of approval. RECOMMENDATION The Planning and Zoning Department recommends approval of Resolution No. 45-14, Tax Exemption for Historic Properties, for improvements to the property located at 101 NE 5th Street, Del-Ida Park Historic District,based upon positive findings with respect to LDR Section 4.5.1(J). http://itwebapp/Agendalntranet/Bluesheet.aspx?ItemID=8354&MeetingID=523 10/2/2014 RESOLUTION NO. 45-14 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, GRANTING AN AD VALOREM TAX EXEMPTION TO JOHN KOLKMEYER AND VIRGINIA L. RITTER, FOR THE HISTORIC REHABILITATION OF THE PROPERTY LOCATED AT 101 NE 5TH STREET, AS FURTHER DESCRIBED HEREIN; DETERMINING THAT THE COMPLETED IMPROVEMENTS ARE CONSISTENT WITH LAND DEVELOPMENT REGULATION (LDR) SECTION 4.5.I U); PROVIDING AN EFFECTIVE DATE. WHEREAS, the Historic Preservation Program of the City of Delray Beach, Florida (the "City"), is designed to preserve, protect, enhance, and perpetuate resources which represent distinctive and significant elements of the City's historical, cultural, social, economic, political, archaeological, and architectural identity; and/or serve as visible reminders of the City's culture and heritage;and WHEREAS, the citizens of Florida amended the Florida Constitution, Article VII, Section 3, to authorize counties and municipalities to grant a partial ad valorem tax exemption to owners of historic properties for improvements to such properties which are the result of the restoration, renovation, or rehabilitation of the historic properties;and WHEREAS, the City of Delray Beach City Commission has approved an ordinance providing for an ad valorem tax exemption for the restoration, renovation, and/or improvement of historic properties (Ordinance No. 50-96);and WHEREAS, the ad valorem tax exemption is one means of offering a financial incentive to increase interest in restoring, renovating, and improving the City's historic structures;and WHEREAS, Ordinance No. 50-96 provides that on completion of the review of a Final Application/Request for Review of Completed Work, the Historic Preservation Planner shall present such Final Application in a regularly scheduled meeting of the Historic Preservation Board and shall recommend that the Historic Preservation Board grant or deny the exemption; and WHEREAS, the property owners filed a Historic Property Ad Valorem Tax Exemption Application for review by the Historic Preservation Board on August 6, 2014, of an ad valorem tax exemption for the historic restoration, renovation, and improvement of the property located at 101 NE 5`h Street, and the Historic Preservation Board determined that the completed improvements were consistent with LDR Section 4.5.1 U) and recommended approval to grant an ad valorem City tax exemption to John Kolkmeyer and Virginia L. Ritter for the restoration, renovation, and improvement to the property located at 101 NE 5ffi Street. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS: Section 1. The City Commission hereby determines that the completed improvements to the property located at 101 NE 5ffi Street, as described in the application for ad valorem tax exemption filed with the City, were consistent with LDR Section 4.5.1 U). Section 2. The City Commission hereby approves an ad valorem tax exemption to the property owners, John Kolkmeyer and Virginia L. Ritter, for a ten year period, commencing on 1/1/15, from that portion of ad valorem taxes levied on the increase in assessed value, between the years 1/1/15 — 12/31/24, resulting from the renovation, restoration, and rehabilitation of the property located at 101 NE 5ffi Street, which property is legally described as follows and which improvements are described in HPB Certificate of Appropriateness No. 2013-187: Lots 12 and 13, Block 5, Del-Ida Park, an addition to the City of Delray Beach, Florida, and that part of Lot 10, Block 5, Del-Ida Park, more particularly described as follows: Beginning at a point in the North line of Coolidge Avenue, (as shown on the plat of Del-Ida Park), which point is 35.84 feet West of the Southeast Corner of said Lot 10 for a point of beginning thence run North at a 90° angle to said North line of Coolidge Avenue a distance of 85.35 feet to a point; thence Run Northeasterly at an angle of 112°38', a distance of 15.54 feet to a point in the Southwesterly line of Lot 9, thence run southeasterly at an angle of 113°7'53" a distance of 30 feet along the said Southwesterly line of Lot 9, to the Southeast corner of said Lot 9, thence run south at an angle of 134°14'07"a distance of 70.91 feet along the East line of said Lot 10 to a point on the North line of Coolidge Avenue, thence run West along the said North line of Coolidge Avenue, a distance of 35.84 feet to the point of beginning (excepting the West 5 feet therefrom), all according to the plat thereof, recorded in the office of the Clerk of the Circuit Clerk in and for Palm Beach County, Florida, In Plat Book 9,Page 52. Section 3. Prior to the ad valorem tax exemption described herein being effective, John Kolkmeyer and Virginia L. Ritter, shall execute and record a restrictive covenant in a form established by the State of Florida, Department of State, Division of Historical Resources, requiring the qualifying improvements be maintained during the period that the tax exemption is granted. A copy of the recorded covenant shall be provided to the City's Historical Preservation Planner. Section 4. This resolution shall take effect in accordance with law. PASSED AND ADOPTED in regular session on the day of , 2014. ATTEST: MAYOR City Clerk 2 Res No. 45-14 HISTORIC PRESERVATION BOARD MEMORANDUM STAFF REPORT Applicant: Virginia Ritter&John Kolkmeyer Property Address: 101 NE 5th Street, Del-Ida Park Historic District HPB Meeting Date: August 6, 2014 File No.: 2014-194 ITEM BEFORE THE BOARD The action requested of the Board is to approve a Historic Property Ad Valorem Tax Exemption Application for improvements on a contributing property located at 101 NE 5th Street, Del-Ida Park Historic District, pursuant to Land Development Regulations (LDR) Section 4.5.1(J). BACKGROUND/PROJECT DESCRIPTION The subject property is irregularly shaped and fronts on both Fern Court and NE 5th Street. The .42 acre site originally contained a circa 1925, 1,174 square foot Mission style residence along with a detached single-car garage. The residence is classified as contributing to the Del-Ida Park Historic District. Building records indicate that a Florida Room was added to the west elevation in 1965. At its meeting of July 3, 2013, the Historic Preservation Board approved a COA for 2 minor additions to the residence, demolition of the single-car garage, construction of a detached two-car garage, and construction of a detached guest cottage. However, the approved COA was significantly revised and reduced in scope by the property owner. Those revisions were administratively approved and consisted of a rear kitchen addition/expansion, and addition of a home office and master suite walk-in closet. The total added square footage measures approximately 350 square feet. All new, impact-rated windows were installed throughout the structure, and the flat roof was refinished. The applicant is now before the Board to request review of the Tax Exemption Application for the aforenoted site and building improvements. Landscaping associated with this project is not permitted as a legitimate expenditure as it is not interpreted as a "site improvement," pursuant to the Florida Administrative Code 1A-38. Based on State regulations, an Ad Valorem Tax Exemption can be approved for a project before, during, or after it has been undertaken. The applicant therefore requests consideration of the ad valorem tax exemption as the project is complete. AD VALOREM TAX EXEMPTION LDR Section 4.5.1(J), Tax Exemption for Historic Properties Pursuant to LDR Section 4.5.1(J), a tax exemption is available for improvements to qualifying contributing properties in a designated historic district or individually designated properties, as listed in Section 4.5.1(1). Qualifying properties shall be exempt from that portion of ad valorem taxation levied by the City of Delray Beach on one hundred percent (1005,o) of the increase in assessed value resulting from any HPB approved renovation, restoration, rehabilitation, or other improvements of the qualifying property made on or after the effective date of the original passing of Ordinance 50-96 on November 19, 1996. 65 Palm Square,Tax Exemption Application 2014-194 HPB Meeting August 6,2014; Page 2 of 4 LDR Section 4.5.1(J)(1), clarifies that the exemption does not apply to the following: (a) Taxes levied for payment of bonds; (b) Taxes authorized by a vote of the electors pursuant to Section 9(b) or Section 12, Article 7 of the Florida Constitution; or (c) Personal property. LDR Section 4.5.1(J)(2), explains the exemption period shall be for ten (10) years, unless a lesser term is set by the City Commission. (a) The term of the exemption shall be specified in the resolution approving the exemption and shall continue regardless of any changes in the authority of the City to authorize such exemption or change in ownership of the property. (b) To retain an exemption, the historic character of the property and the improvements which qualified the property for an exemption must be maintained in their historic state over the period for which the exemption was authorized. LDR Section 4.5.1(J)(4) provides the parameters for qualifying properties and improvements. The subject property qualifies as it is listed on the Local Register of Historic Places. LDR Section 4.5.1(J)(5) requires that for an improvement to a historic property to qualify the property for an exemption, the improvement must: (a) be consistent with the United States Secretary of the Interior's Standards for Rehabilitation, as amended; and (b) be a constructed and/or installed improvement as approved by the Historic Preservation Board and as established in rules adopted by the Department of State, Division of Historical Resources, FAC 1A-38, as amended which defines real property improvements as changes in the condition of real property brought about by the expenditure of labor and money for the restoration, renovation, or rehabilitation of such property. Improvements shall include, but are not limited to: modifications, repairs, or additions to the principal contributing building and its associated accessory structures (i.e. a garage, cabana, guest cottage, storage/utility structures, swimming pools), whether existing or new. The exemption does not apply to improvements made to non-contributing principal buildings, existing non-contributing accessory structures., or undesignated structures and/or properties; and, (c) be consistent with Section 4.5.1(E), "Development Standards'; of the City's Land Development Regulations; and (d) include, as part of the overall project, visible improvements to the exterior of the structure. STAFF COMMENT: The project meets the above criteria through previous approval by the Board of the associated improvements outlined above which constitutes its compliance with the Secretary of the Interior's Standards for Rehabilitation, as well as the rules of Florida Administrative Code 1A-38, promulgated by the Florida Department of State, Division of Historical Resources. The development project meets criterion (c) per the COA approval which applied the LDR Development Standards in the assessment of the proposal. Finally, the project meets criterion (d) as the project encompasses visible improvements to the exterior of the building and related property. LDR Section 4.5.1(J)(7), Any property owner, or the authorized agent of the owner, that desires an ad valorem tax exemption for the improvement of a historic property must submit a Historic Property Tax Exemption Application to the Planning and Zoning Department upon completion of the qualifying improvements. (a) The application shall indicate the estimated cost of the total project, the estimated cost attributed solely to the historic structure, and project completion date as determined by the Certificate of Occupancy issued by the Building Department. (b) The Historic Property Tax Exemption Application shall be accompanied by a copy of the most recent tax bill from the Palm Beach County Property Appraiser for the property; a new property survey illustrating the improvements; a copy of the building permit application indicating estimated project cost; a copy of the Certificate of Occupancy/Final Inspection; and 65 Palm Square,Tax Exemption Application 2014-194 HPB Meeting August 6,2014; Page 3 of 4 photographs illustrating the before and after of each improvement, including both the interior, exterior, and all new construction. The photographs shall be identified with a date and description indicating the impact of the improvement. (c) The application must be submitted within three (3) months from the date of issuance of a Certificate of Occupancy. (d) The Historic Preservation Planner will inspect the completed work to verify such compliance prior to Historic Preservation Board review. a. If the Historic Preservation Board determines that the work is a qualifying improvement and is in compliance with the approved plans and the review standards contained in Section 4.5.1(E), the Board shall recommend that the City Commission grant the Historic Property Tax Exemption Application. b. Upon a recommendation of approval of a Historic Property Tax Exemption Application by the Historic Preservation Board, the application shall be placed by resolution on the agenda of the City Commission for approval. The resolution of the City Commission approving the application shall provide the name of the owner of the property, the property address and legal description, a recorded restrictive covenant in the official records of Palm Beach County as a condition of receiving the exemption, and the effective dates of the exemption, including the expiration date. c. If the Historic Preservation Board determines that the work as completed is either not consistent with the approved plans or is not in compliance with the review standards contained in Section 4.5.1(E), the applicant shall be advised that the request has been denied STAFF COMMENT: The qualifying improvements were completed and submitted within three months of the Certificate of Occupancy which was issued on June 30, 2014. LDR Section 4.5.1(J)(8), Historic Preservation Exemption Covenant, explains the covenant required in order to qualify for the exemption: (a) To qualify for an exemption, the applicant must sign and return the Historic Preservation Exemption Covenant with the Final Application/Request for Review of Completed Work. The covenant as established by the Department of State, Division of Historical Resources, shall be in a form approved by the City of Delray Beach City Attorney's Office and applicable for the term for which the exemption is granted and shall require the character of the property and qualifying improvements to be maintained during the period that the exemption is granted. (b) On or before the effective date of the exemption, the owner of the property shall have the covenant recorded in the official records of Palm Beach County, Florida, and shall cause a certified copy of the recorded covenant to be delivered to the City's Historic Preservation Planner. Such covenant shall be binding on the current property owner, transferees, and their heirs, assigns and successors. A violation of the covenant shall result in the property owner being subject to the payment of the differences between the total amount of the taxes which would have been due in March of each of the previous years in which the covenant or agreement was in effect had the property not received the exemption and the total amount of taxes actually paid in those years, plus interest on the difference calculated as provided in Sec. 212.12(3), Florida Statutes. LDR Section 4.5.1(J)(10), Revocation Proceedings, provides guidelines to revocation of the tax exemption upon violation of the recorded covenant. (a) The Historic Preservation Board may initiate proceedings to revoke the ad valorem tax exemption provided herein, in the event the applicant, or subsequent owner or successors in interest to the property, fails to maintain the property according to the terms, conditions and standards of the Historic Preservation Exemption Covenant. (b) The Historic Preservation Planner shall provide notice to the current owner of record of the property and the Historic Preservation Board shall hold a revocation hearing in the same manner as in Section 4.5.1(M)(10), and make a recommendation to the City Commission. 65 Palm Square,Tax Exemption Application 2014-194 HPB Meeting August 6,2014; Page 4 of 4 (c) The City Commission shall review the recommendation of the Historic Preservation Board and make a determination as to whether the tax exemption shall be revoked. Should the City Commission determine that the tax exemption shall be revoked, a written resolution revoking the exemption and notice of penalties as provided in Paragraph 8 of the covenant shall be provided to the owner, the Palm Beach County Property Appraiser, and filed in the official records of Palm Beach County. (d) Upon receipt of the resolution revoking the tax exemption, the Palm Beach County Property Appraiser shall discontinue the tax exemption on the property as of January 1st of the year following receipt of the notice of revocation. The Sections noted above regarding the "Restrictive Covenant" and "Revocation Proceedings" are provided to demonstrate that the tax exemption is binding, and if violated, the property owner would have to comply with the consequences. ANALYSIS The tax exemption request complies with the criteria contained in LDR Section 4.5.1(J) as the Historic Preservation Board approved the associated improvements by making positive findings with respect to the applicable LDR Sections, Delray Beach Historic Preservation Design Guidelines, and Secretary of the Interior's Standards for Rehabilitation. Therefore, positive findings can be made with respect to LDR Section 4.5.1(J). ALTERNATIVE ACTIONS A. Continue with direction. B. Recommend approval to the City Commission of the complete Ad Valorem Tax Exemption Application for improvements to the property at 101 NE 5th Street, Del-Ida Park Historic District, based upon positive findings with respect to LDR Section 4.5.1(J). C. Recommend denial to the City Commission of the complete Ad Valorem Tax Exemption Application for improvements to the property at 101 NE 5th Street, Del-Ida Park Historic District, based upon a failure to make positive findings with respect to LDR Section 4.5.1(J). (Motion to be phrased in the affirmative. See above.) RECOMMENDATION Recommend approval to the City Commission of the Historic Property Ad Valorem Tax Exemption Application (2014-194) for improvements to the property at 101 NE 5th Street, Del-Ida Park Historic District, based upon positive findings with respect to LDR Section 4.5.1(J). Report Prepared by:Amy E. 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