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City Would be 'Crazy' to Invest in Party House, Councilman Says

Outgoing councilman Bobby Shriver estimates property tax breaks sought by the owners of Santa Monica's "House of Rock" will total $2 million over 10-year period.

How much is the city willing to spend subsidizing privately owned historic homes and buildings?

The City Council contemplated the question Tuesday but didn't arrive at an answer.

Instead, it postponed a decision on whether to reduce the property taxes paid by the owners of a 1920's mansion on La Mesa Drive, known locally as "The House of Rock" for its lavish charity fundraisers unpopular with neighbors. The tax breaks would be granted under California's Mills Act, an incentive program designed to encourage owners of historic structures to spend the money they save on renovating and preserving their properties.

Enrolling the estate at 2009 La Mesa Dr. could result in the city paying its biggest Mills Act subsidy to date. Recently listed at $22 million, its reduced property tax assessment would probably be higher than any of the 54 Santa Monica properties currently in the program.

Shriver estimated the reductions on the House of Rock would be in the ball park of $2 million over the course of the 10-year Mills Act contract.

"It’s just crazy to me [that we would] spend the money now," outgoing councilman Bobby Shriver said. "The city is in very tight financial circumstances."

City staffers have used the House of Rock's 2010 purchase price of $8 million to estimate the property taxes being lowered to $12,127 from $90,204. Of that, the city would receive $1,940 instead of $14,433. The average Mills Act property ends up paying about half that, city staffers told the council.

"In terms of loss of city revenue, most are about $5,000," said senior planner Scott Albright.

Based on a $22 million evaluation, councilman Kevin McKeown said, "I think I heard that this would be as much as $350,000 in city money—money that could have been used for police, fire things like that. Plus some unspecified amount to our schools."

The council should be wary of the investment for more reasons than the high price tag, Landmarks Commissioner Ruthann Lehrer said.

According to Lehrer, the Mills Act application was deficient. It didn't contain, she said, a plan and time line for the restoration work that would be performed for the duration of the contract.

"There’s never been a case before where there was any question about the... intent of the property owner, how the property would be preserved [and] maintained," she told the council.

In what Lehrer called a "truly unprecedented move,"  the commission voted unanimously for the first time to recommend the City Council not approve the contract.

The vote is now scheduled for Dec. 11.

In the meantime, councilwoman Gleam Davis said she wanted city staffers to find out if there are any outstanding code compliance issues. Additionally, she wants assurance from owners Greg Briles and Elaine Culotti that they won't throw any more big parties at the house.

After purchasing the home two years ago, the couple commissioned high-end designers to decorate rooms under the common theme of "music," then began using it as a venue for charitable fundraisers hosted by corporate sponsors, such as KISS FM and Verizon.

Earlier this month, the council adopted a law aimed at shutting down those events, the last one of which was scheduled for Dec. 6.

Davis and others contend the parties are a marketing ploy to sell the estate.

Having a Mills Act contract is also good for marketing a house, the city says on its website.

"Since Mills Act contracts run with the property, subsequent owners may realize greater tax benefits, as the assessed property value typically increases when the property is sold, resulting in an even greater difference between the property taxes under the assessed valuation method versus the property tax calculation permitted by the Mills Act contract," the site says.

Briles and Culotti's attorney Alex DeGood said past conflicts over the parties shouldn't influence the council's Mills Act decision. He contended the council has no reason to deny the contract, because it meets all of the city's criteria, mainly that it's an historic, landmarked structure.

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Glenn E Grab November 30, 2012 at 04:44 PM
unbelievable, they throw the Christmas display people under the bus, but give in to the million dollar hoax....losing millions for the City........thanks again, City Council....nice work...
Glenn E Grab November 30, 2012 at 04:53 PM
investing, this is the way the City invests?.....giving away millions to millionaires?...
mimi November 30, 2012 at 05:07 PM
This has become a "shaggy dog" story. And it is such a waste of time and energy. I asked the question once before and never got an answer: Why can't the City impose a limit on the number of parties allowed per month, along with a definitive number of guests? How about one charity fund raiser per month? The maximum number of guests allowed would be determined by the fire and building safety codes. Must we throw the baby out with the bath water simply because the neighbors don't want large parties in their 'hood? It is nobody's business if there are secondary gains for the property owners. What is the real reason for all of this intolerance? I just don't buy the limited parking excuse or excessive noise concern. I would appreciate an objective and legal response to my questions . No hater responses, please. Thank you.
Glenn E Grab November 30, 2012 at 06:25 PM
mimi, why should the owners of this house get to use it as a business and only pay one tenth the amount of property taxes that their neighbors do?...this has nothing to do with intolerance.....the neighbors are paying big time property taxes for the privilige of living in a beautiful area...
Dan Charney November 30, 2012 at 08:16 PM
These millionaires really need a break- please - they buy it for 8 million- and are trying to sell it for 22? In a city that cannot take over the funding for the only real program to save the truly vulnerable- Section 8 funding- we have money for this? And why with all this development and sell out do we have no money and are 'cash strapped'? Where has that money gone? Why is this city so top and bottom heavy with employees? This is ridiculous- are they friends of the city council?
Glenn E Grab December 01, 2012 at 04:58 PM
Dan, you had to ask?....of course they are!!
Dan Charney December 01, 2012 at 07:26 PM
Had to ask - yes ;;)
Eddie Greenberg December 02, 2012 at 03:39 AM
No Mills act should apply here.The place was run like a disco and was a huge nuisance. I agree with Bobby Shriver that it is CRAZY. No way! The city has plenty of money to pay the city manager the same amount as a US President. All the top folks are not coming cheap. Remember the Re Development agency fiasco? Just how much more "affordable housing" do we need? SMRR never had it so good! The House of Rock needs to rock on out of here without a 2 million dollar gift.
Tom hays December 03, 2012 at 08:24 AM
The city should reject this raid on the treasury and fight any lawsuit to the bitter end or look like complete suckers. The staff recommendation to overturn the Landmark Commission's unanimous and well reasoned, unprecedented rejection of the Mills Act application is a big puzzle to me and a serious error by City Manager Gould.
Reggie barns December 04, 2012 at 03:49 AM
Eddie - I'm sure some people might not like they way you live your life or what you do with your home, but that shouldn't prevent you from seeking the same things that the city has granted others. You and others are mixing 2 things up that have nothing to do with one another. The fact that Gleam Davis states that she wants the owners to do what she says or she won't support the decision is down right insane. What country is Santa Monica in?? Since when are we ok with city council deciding what we do in our homes. Charity gatherings that raise money and awareness that are done by 10:30pm?? Have people lost their minds!!! Anyone that complains about this is just shameful and greedy. Also, it's our right to raise money for good causes and make a profit on our homes. I guess if you complain about them making money on the sale of the home, your just jealous you didn't make a better investment yourself.
Glenn E Grab December 04, 2012 at 05:23 PM
reggie, it sounds like you are making money off of this enterprise....otherwise, why would you be such an advocate for this hoax that's being pulled on the City?...your name calling and childish logic don't help further your cause, in any case...your bias and poor reasoning are painfully obvious....
Reggie barns December 04, 2012 at 07:25 PM
Glenn I guess you must be one of the neighbors that constantly makes up lies. I've never seen so much come from so little. Not sure what hoax you are talking about... Keeping making up lies.. Hopefully it makes you feel better. Don't forget to make your next campaign contribution. I think the pot is calling the kettle black.
Reggie barns December 04, 2012 at 07:41 PM
I forgot to add Glenn... Maybe you should hire a private detective like these neighbors did ( cause that is normal) to investigate to see if I make money on something these neighbors wasted so much city resources on. Can't wait to hear your next story....
Glenn E Grab December 05, 2012 at 06:57 AM
reggie, you have the reasoning power of a retarded child.....don't post any more, you only make a fool of yourself...
Reggie barns December 06, 2012 at 03:51 AM
The pot is certainly calling the kettle black... Let me quote you " your name calling and childish logic..." You have reduced yourself... to yourself. I love how you said i make a fool of myself... and you just called me a " retarded child". Lots of hate in your heart Glenn. I feel sorry for you and your prejudice comments. Maybe the next time you'll call me the N word or some other racist comment. You should be ashamed of yourself. You are just the person I thought you were.... Thanks for proving it.
Glenn E Grab December 06, 2012 at 04:39 PM
reggie, I don't know or care what your race is....you are playing the "race card" on your own comments....maybe you can sue yourself....I'm fighting a battle of wits with an unarmed man....
Reggie barns December 06, 2012 at 05:34 PM
Sure you don't Glenn Grab.... I never said what my race was... You are just assuming I have a "race card" (as you call it), i guess. I was just waiting for your next insult. Is this how you act in front of your 6yr old granddaughter? You're not setting a very good example. I'll sue myself.. That was very witty or was it the unarmed man comment.. i couldn't tell they are both soooo witty. Here is one for ya " when you find yourself in a hole, stop digging". I bet you are the guy that makes all your friends laugh with your off color comments.
Jenna Chandler (Editor) December 06, 2012 at 05:54 PM
Please stop attacking each other. Use this space to discuss the story, not each other.
Reggie barns December 06, 2012 at 06:04 PM
Unfortunately this is part of the story... Guys like this with the lies and hate are why this story has been blown out of proportion. You can thank Glenn and his neighbor friends for that.

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