Supervisors revisit Mills Act contract for 714 Steiner; Peskin proposes limiting long-term tax abatement

The Government Audit & Oversight Committee held a detailed hearing on April 21 on a proposed Mills Act historic property contract for 714 Steiner Street in the Alamo Square historic district.

Supervisor Aaron Peskin, sitting for recused Chair Dean Preston for this item, framed a policy approach that would grant Mills Act contracts while placing them into nonrenewal after 10 years so termination would be effective after 20 years. "What I am suggesting ... is that it be terminated in 10 years so it becomes effective in 20 years," Peskin said, arguing the approach balances early rehabilitation incentives with recapturing public value over time.

Michelle Taylor, senior preservation planner, told the committee 714 Steiner is a contributing Queen Anne building on Postcard Row with a proposed rehabilitation scope including seismic stabilization, roof replacement and siding repair. Taylor said the estimated cost of rehabilitation work is $1,259,900 and annual maintenance is estimated at $5,400; the Historic Preservation Commission had unanimously approved the Mills Act application on Oct. 6, 2021.

The assessor’s office explained the three-value comparison used for Mills Act valuations and provided estimates: a factored base-year value projected at about $5,131,000 in 2023, a restricted-income approach estimate of about $1,600,000, and a market approach near $5,500,000; the assessor said the taxable value is enrolled as the least of the three tests (roughly $1,600,000), which produces an estimated first-year tax savings of about $42,000 and, by the assessor’s projection, about $580,000 over 20 years.

Owner Leah Culver, who described herself as committed to preserving a landmark “painted lady,” said Mills Act assistance made the restoration feasible and urged the committee to approve the application "as is" while reserving broader Mills Act policy changes for separate consideration.

Committee members questioned transferability (the contract runs with the property), the difference between partial abatement in years 1–10 and declining savings in years 11–20, and whether the city should adopt a uniform policy around Mills Act term limits. Supervisor Peskin said he has pursued similar policy reviews and modeling with staff and the assessor’s office.

Supervisor Paskin moved the amendments (clarifying the hearing date in the resolution title and striking an unnecessary phrase); the committee adopted the amendments and voted to continue the matter as amended to the next GAO meeting on May 5.

What’s next: The item was continued for further committee consideration; staff said additional policy analysis and modeling are available and that the committee will revisit contractual term options for Mills Act agreements.