C7J - Approve Historic Tax Exemption

Resolutions - C7 J

COMMISSION MEMORANDUM

RECOMMENDATION

The Administration recommends that the Mayor and City Commission (City Commission) adopt the attached Resolution, authorizing an Historic Single Family Ad Valorem Tax Exemption for qualifying improvements for a single-family property located at 3193 Royal Palm Avenue.

BACKGROUND/HISTORY

On April 13, 2010, the Historic Preservation Board (HPB) reviewed and approved a request for the individual designation of the single-family property located at 3193 Royal Palm Avenue as an historic structure (see attached historic designation report).

On July 8, 2025, the HPB reviewed and approved a certificate of appropriateness for construction of an attached addition to an individually designated historic single-family home located at 3193 Royal Palm Avenue, including setback variances (see approved plans attached). At this meeting the HPB also recommended that the Mayor and City Commission approve a preconstruction application for Historic Ad Valorem Tax Exemption for qualifying improvements to the historically designated single-family property at 3193 Royal Palm Avenue (see attached application).

ANALYSIS

On December 8, 2004, the City of Miami Beach enacted legislation that authorizes an exemption for its portion of ad valorem taxes for improvements to historically designated single-family homes (Section 2.13.10 of the Resiliency Code). This legislation allows for the City’s portion of property taxes to be “frozen” at the rate they were assessed before qualifying improvements are made to an historic single-family home for a period of ten (10) years. The “freezing” is accomplished by removing from the assessment the incremental value added by the qualifying improvements. Only the incremental value of the qualifying improvements shall be “frozen” for the ten-year period.

Qualifying improvements are the result of restoration, renovation, rehabilitation and/or compatible additions to an historic single-family property. In order for an improvement to qualify for an exemption, the improvement must be determined by the Historic Preservation Board and City Commission to be consistent with the Secretary of the Interior's Standards for Rehabilitation and

the Certificate of Appropriateness Criteria in Chapter 2, Article 13 of the Resiliency Code. However, the Miami-Dade County Property Appraiser’s Office will make the final determination of whether an improvement qualifies for an exemption.

Historic Single Family Ad Valorem Tax Exemption Process The application for Historic Ad Valorem Tax Exemption is a two-step process. The “Part 1 – Preconstruction Application” is normally submitted to the Planning Department prior to any construction or demolition for an eligible single-family property. The “Part 2 – Review of Completed Work” is submitted to the Planning Department upon substantial completion of the project.

Upon submittal of a completed Part 1 - Preconstruction Application, the Planning Department will schedule the request for approval of Historic Ad Valorem Tax Exemption from the Historic Preservation Board at their next regularly scheduled meeting. The Board will review and make a recommendation to the City Commission to grant or deny an application for tax exemption.

The Planning Department will transmit the request for approval of Historic Ad Valorem Tax Exemption, together with the Part 1 – Preconstruction Application and the recommendations of the Historic Preservation Board and staff, for final consideration by the City Commission at a regularly scheduled meeting. A majority vote of the City Commission is required to approve an application for tax exemption.

For final approval of an Historic Ad Valorem Tax Exemption, the applicant must submit to the Planning Department the Part 2 – Review of Completed Work upon substantial completion of the project. A review will be conducted by Planning Department staff to determine whether or not the completed improvements are in compliance with the work approved by the City Commission in the Part 1 - Preconstruction Application. To qualify for a tax exemption, the property owner is required to enter into a covenant or agreement with the City guaranteeing that the character of the property and its qualifying improvements will be maintained during the period that the exemption is granted.

Scope of Project – 3193 Royal Palm Avenue The following is a summary of the scope of work approved by the HPB on July 8, 2025:

Exterior Architectural Features 1. Construction of a 1-story, ground level addition along the west side of the home, partially within the required front yard. The proposed addition contains 505 square feet of enclosed area and is comprised of a bedroom, closet and bathroom. The design of the new addition is compatible with the architectural vocabulary of the historic home and requires extremely limited demolition. Further, the location of the addition along the western side maintains the primary “postcard” view of the historic home.

2. Construction of a 1-story, 44 square foot ground level addition along the south side of the home for a new half bathroom.

Interior Architectural Features 1. Elimination of an existing half bathroom in order to expand the kitchen pantry.

NOTE: The interior improvements indicated above may not be considered by the County Tax Appraiser to be qualifying for the ad valorem tax exemption.

HISTORIC PRESERVATION BOARD REVIEW On July 8, 2025, the Historic Preservation Board held a public hearing and transmitted a favorable recommendation to the City Commission (7-0) for the granting of the requested Historic Single Family Home Ad Valorem Tax Exemption for the proposed improvements to the residence located at 3193 Royal Palm Avenue.

FISCAL IMPACT STATEMENT

According to the applicant, the estimated cost of the entire project and the value of the proposed qualifying improvements is $100,000. The project commencement date is scheduled for January 1, 2026 and the estimated project completion date is sometime in September 2026.

Please note that the revenue implication calculation provided below is a rough approximation. It assumes that the Miami-Dade County Property Appraiser’s Office will not reduce the actual square footage of the additions to adjusted square footage. It assumes that the City’s millage rate, the building market value, as well as the existing building class and grade value will remain the same. It is also based solely on the estimated value of the new additions and not to any repairs to the historic residence.

The Miami-Dade County Property Appraiser’s Office determined in 2024 that the subject property has an adjusted square footage of 2,449 and a building value of $852,252. The lot size is approximately 7,451 square feet with a land value of $1,368,815.

According to this information, the subject property has an effective building value $348 per adjusted square foot, which is based upon its current building class and grade. According to the applicant, 549 square feet of qualifying building additions will be added to the site. Therefore, the estimated value of the proposed increase in qualifying square footage only would be $191,052. This figure does not include any other qualifying improvements that the County Tax Appraiser may determine add value to the building. The County Tax Appraiser may determine certain improvements to the existing structure to be maintenance and therefore not adding building value to the property. In FY 2024/25, the adopted millage rate for the City of Miami Beach is 6.1481 (including debt service).

For the sole purpose of providing an estimated savings to the property owner (based solely on the square footage of qualifying additions), it is assumed there will be no change in millage rate over the ten-year period in which the exemption is granted. When using the 6.1481 millage rate for FY 2024/25, the applicant will save annually approximately $1,175 from the Miami Beach’s portion of property taxes. Again, this calculation is a rough estimate of the revenue implication to the City due to many variables.

Does this Ordinance require a Business Impact Estimate? (FOR ORDINANCES ONLY)

If applicable, the Business Impact Estimate (BIE) was published on: See BIE at: https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/

FINANCIAL INFORMATION

Not Applicable

CONCLUSION

The Administration recommends that the City Commission adopt the attached Resolution authorizing an Historic Single Family Ad Valorem Tax Exemption for qualifying improvements to the individually designated historic single-family residence located at 3193 Royal Palm Avenue.

Applicable Area

Middle Beach

Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

If so, specify the name of lobbyist(s) and principal(s):

Department

Planning

Sponsor(s)

Private Applicant Commissioner Alex Fernandez

Co-sponsor(s)

Condensed Title

Single Family Ad Valorem Tax Exemption - 3193 Royal Palm Ave. (PrivAppl/AF) PL

Previous Action (For City Clerk Use Only)