Gov. Brown Leaves No Doubt About Future of State Historic Credits in California

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I’m attending the ULI Fall Meeting in San Francisco, and it’s a fantastic conference with heavy emphasis on future tech and demographic trends; their likely impact on cities, development and land use.

In a fascinating session at the end of the day Tuesday, George Marcus, Chairman of Marcus and Millichap, sat down with Gov. Jerry Brown and discussed topics ranging from closing the state’s $27 billion budget gap, possible reforms to the California Environmental Quality Act, the California drought, and the impact on California and the world of climate change.

As the session was wrapping up, the last question from the audience was from Brandon Hill of Fusion Advisory Services in Birmingham, AL. In an implied reference to the governor’s 2014 veto of a new state historic tax credit bill passed unanimously by both houses of the California legislature, Brandon pointed out the positive impacts across America of state and federal historic credits, and asked the governor about his views on the subject.

Brown responded with an account of the arcane budget rules in California where a tax incentive can be enacted by the legislature with a simple majority but rescinded only with a two-thirds majority, thus having the practical political effect of permanence in the tax code. Further, he felt the historic credit bill was a one-off effort relating to a single issue, while his preference would have been for a larger bill that took a more holistic view of development incentives. This seemed like a rational, reasonable defense of his veto.

Then…

The governor went on to describe in surprisingly personal and bitter terms a couple of his past encounters with the preservation community. While living in Sacramento in a residential loft building, he was prevented from installing double-paned windows with improved acoustics so that when the bar downstairs closed in the middle of the night, the patrons on the sidewalk downstairs would wake him up. And, while he was mayor of Oakland, the preservation interests blocked the demolition of a “tired, non-descript little building,” thereby preventing the development of a major project the he supported. He said, “in general, it’s just hard to develop in historic areas because of all the requirements.”

His last comments when the session wrapped up was, “Yeah, historic credits in California…don’t hold your breath.”

Well, at least we know where we stand and who we have to convince.