Broader questions about Mills Act impact follow latest historic designation

The Palm Springs City Council last week granted Class 1 Historic Site designation to a 1930s estate tied to Hollywood director Edmond Goulding, a decision that prompted a broader discussion about the reach and fiscal impact of the city’s Mills Act historic preservation program that allows for tax breaks for owners of some historic properties, with conditions.

The property, located at 1752 Ridge Rd., was purchased by Lucien Wolff, who told the council he bought it knowing it needed significant restoration work.

“It is just one of the most spectacular buildings,” Wolff said, adding that the historical society told him it is one of the most important structures built in the 1930s because Goulding, who headed MGM and later Warner Brothers, drew prominent visitors from across the entertainment world and European nobility to the home.

Historic Preservation Officer Sarah Yoon said the property met historic criteria related to early residential development trends, architectural styles, its association with the early LGBTQ community in Palm Springs, and the significance of its owner. The Historic Site Preservation Board recommended the Class 1 designation during a February meeting.

A representative from the Palm Springs Preservation Foundation described the property’s historical significance, noting that actress Greta Garbo stayed at the home the night the Plaza Theatre opened, and that the pool is among the largest ever built in a private residence.

Wolff said he plans to restore the original architecture while making select modifications, including adding a restroom on the upper level, expanding the kitchen, and finding a way to connect the upper and lower levels to facilitate events. He said he has been in contact with city staff about what changes would and would not be permitted under the designation.

The council approved the designation, but afterward, Mayor Naomi Soto asked Planning Director Chris Hadwin to explain how the Mills Act program works and what it costs the city, saying the context in the staff report was helpful for understanding the relationship between historic designation and property tax relief.

The Mills Act program provides a property tax rebate to owners of designated historic properties who commit to using the savings for ongoing maintenance or restoration.

Hadwin said the city currently has 524 historic properties eligible for a Mills Act contract, of which 177 already have existing contracts and 14 are in the application process, including two properties before the council that evening. The city processes roughly 12 applications per year.

“Not every single one of the 524 are pursuing Mills Act contracts, nor would we necessarily work with them to do so,” Hadwin said.

On the fiscal impact, Hadwin said the county’s methodology for calculating rebates is not fully transparent, but that rebates generally range from about 40 to 70% of a property’s tax bill. Using the city’s median annual property tax assessment of $4,250 as a baseline, he estimated the rebate for a typical property falls between $1,700 and $3,000 per year.

Across the roughly 12 contracts granted annually, Hadwin said that translates to a reduction in the city’s property tax base of approximately $20,000 to $35,000 per year. Over 10 years, he said the cumulative impact — including contracts already on the books — could reach between $300,000 and $500,000, with an additional $357,000 projected from contracts yet to be issued.

Hadwin said city staff plan to return to the council with a broader discussion about the historic preservation ordinance as part of an upcoming zoning code update, to ensure the program is working as intended.

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