Saving historic Chico

When Tom and Margo Graham purchased the historic Goodman House in 2003, they knew that converting a building that long had been used for law offices into a bed and breakfast would be complicated and expensive. The house, which was built in 1906, needed all kinds of work, including a new roof.

The Grahams invited several roofing contractors to make bids. Most turned down the job, saying the roof was too steep. One fellow climbed up one of the pitches and got stuck. When the Grahams offered to call the Fire Department to get him down, he refused. He’d never live it down, he said. His reputation would be ruined.

Someone else repaired the roof.

By the time the Grahams finished refurbishing the house, they had added five new bathrooms and a kitchen, central air and heating, new electrical wiring throughout, as well as the new roof. They’d also remodeled the two existing bathrooms. And they’d replaced most of the wood on one side of the building that was riddled with dry rot.

Of course, all this required many trips to City Hall to get the necessary permits. It was during one of these visits that someone mentioned the Mills Act, saying they might be able to make use of it.

They’d never heard of the act, which has long been considered the single most important incentive the state offers owners of historic buildings to restore them. Authored by former Sen. Jim Mills, of San Diego, and enacted in 1972, it allows owners of historic buildings to enter into contractual agreements with their city governments that give them significant tax breaks and code exemptions if they promise to restore the buildings in a historically accurate way.

In the Grahams’ case, they’ve cut their property taxes on their original assessment by 50 percent. But that’s not all. “The real beauty of the Mills Act is that the house isn’t reassessed when improvements are made,” Margo Graham said. And, since they have spent as much on improvements as they paid for the house in the first place, that means they are saving thousands of dollars annually in property taxes.

In return, they’ve restored the house to its original glory. It wasn’t easy. As Margo Graham put it, “If you want to keep a house historic and you need something, you can’t just go down to Home Depot and buy it. You have to have it made especially for the house.”

Windows are a good example. The only way to replace warped or rotted 100-year-old windows is to have a craftsman make and install them. “Everything is hard, and everything is expensive,” Tom Graham said.

Is it worth it? “Absolutely,” he replied.

Not only do the Grahams enjoy the satisfaction of knowing they’ve restored a beautiful old home and created something their guests can enjoy, they are saving money every year. “I’m happy every time I sit down to do our taxes,” Margo Graham said.

The Grahams were among the first Chicoans to take advantage of the Mills Act. In fact, the city had not yet adopted it when they bought their house. They remember attending a City Council meeting where it was being discussed and going to the lectern to encourage councilmembers to support it.

Another person who spoke that night in favor of adopting the act was John Gallardo, the former long-time president of the Chico Heritage Association and for more than 25 years a leader in the effort to preserve Chico’s historic structures.

He says the city is more committed and unified on the issue than ever before. “Right now the City Council, the city manager and city staff are all in favor of preserving our cultural heritage,” he said during a recent interview in the small, jam-packed office on Flume Street that CHA shares with the League of Women Voters and the Sacramento River Preservation Trust. “We’ve never had that since I’ve been involved.”

The council took a significant step in that direction on June 17, when it unanimously approved the creation of a multi-pronged historic-preservation program, including an ordinance that will give the city greater power to preserve old buildings. (Please see sidebar story, page 17.) It was something Gallardo and others had been advocating for decades, especially since the early 1980s, when over a period of four years volunteers put together an inventory of some 300 historic structures in the city.

That was just the beginning, he said: “There could be a thousand more.”

Gallardo is well aware of the pressures causing Chico’s old buildings to deteriorate.

“The biggest issue is absentee landlords,” he said, “especially in the South Campus neighborhood.” They aren’t invested in the community and don’t really care whether their properties look run-down, as long as they keep getting their rent money.

Back in the 1950s, he said, when Chico State still had only a few thousand students, the neighborhood had more owner-occupied houses and was in much better shape. That’s changed as the university has grown and the vintage homes have been turned into rentals and, worse, been demolished and replaced with apartment complexes.

“If it weren’t for the university, much of the South Campus neighborhood would look like the Woodland Avenue area [east of downtown],” Gallardo said.

He is particularly concerned about the row of historic houses along Rio Chico Way, all of them now rentals in disrepair and surrounded by the university. A recent fire at one of them, the Boucher Home, has only added to the anxiety. University President Paul Zingg has said Chico State has no intention to raze the houses and is committed to preserving them.

Fortunately, there are a few landlords in the South Campus neighborhood who have large numbers of properties and are committed to preserving them, Gallardo said. Among them is Wayne Cook, owner of the Hotel Diamond, who is locally famous for upgrading dozens of old buildings in the area, including the row of houses on West Third Street between Chestnut and Hazel known as the Language Houses.

In fact, the CHA came into existence in 1981 partly in response to the threat to those houses, which the university owned and wanted to demolish to make room for a parking lot. It took a community outcry and a bill in the state Legislature to force the university to cut a deal with Cook and save the houses.

Ray Murdoch is another property owner who buys and restores old buildings in the neighborhood. Murdoch has restored 19 buildings in the area, all but one of them more than 100 years old. His most recent purchase is the historic William Earll house, a huge and elaborate but weary-looking Victorian at the corner of Hazel and Third streets, across from the most westerly of the Language Houses.

Many of the homes in the neighborhood may look run-down, Murdoch said, but they’re often structurally sound and “it makes economic sense to fix them up.” He’s able to charge higher rents for units in restored houses, he explained. As an example, he pointed to the house directly across Third Street, an elegant Victorian in the Stick-Eastlake style that he’s restored and has no trouble renting.

William Earll was the prosperous owner of a hardware store and chairman of the committee seeking to bring a normal school, or teachers college, to Chico in 1883, when he built his 5,500-square-foot house for $5,500. Three years later, construction began on the school that is now California State University, Chico.

Currently the house is divided into four rental units. Since buying it five months ago, Murdoch has worked mostly on the eaves, which had rotted through in several places enough to show sky. That has included replacing more than a dozen elaborately carved cornices that braced the eaves. Each had to be hand-carved before being put in place.

The building is very tall, and the eaves are a good 30 feet high, and a big lifter was required to gain access to them. Murdoch eagerly offers up detail photos showing the fineness of his craftsman’s work.

Murdoch is on the far side of 50, but when it comes to fixing up this house he’s like a kid in a candy store. “I love it,” he said. “Some people drive fast cars or hunt deer for fun. I fix old houses.”

In the basement are some of his finds, including a piece of wrought iron that was part of the rooftop fineals. A previous owner had removed most of the fineals and used them for decoration in her garden, he said, but at least now he had a remnant and could hire an ironsmith to copy it and replace the entire set.

“My intent is to restore everything completely like it was,” he said. “That old house—I want it to be a showplace.”

He hasn’t yet applied for a Mills Act contract, but he plans to do so. Ultimately, he said, he is going to live in the house.

Another area where older homes have been under pressure is the Avenues neighborhood north of downtown, including the Mansion Park neighborhood immediately north of the university. Many of the houses there are more than 50 years old, which means they could qualify for special designation, and the long-established, tree-filled neighborhood as a whole is something residents and city officials want to protect. The CHA’s inventory includes 41 historic buildings in the area, and there are undoubtedly many more.

Over the years, quite a few older houses close to the university campus were torn down and replaced with apartment complexes. The city no longer approves such changes, but that hasn’t stopped houses in the neighborhood from being converted to student rentals, with the consequent devaluation of nearby owner-occupied dwellings. This was a major concern of residents when they met in 2007 to develop the city’s first neighborhood plan.

Among other things, they called for better code enforcement to deal with a lack of upkeep, absentee landlords and illegal rentals. Most of all, though, they wanted the city to develop a historic-preservation ordinance that would give residents more tools to protect their neighborhood.

Their determination was evident in 2006, when the City Council decided whether to allow Enloe Medical Center to expand farther into the neighborhood. Residents organized and turned out in droves to protest the expansion, and though they ultimately weren’t successful, they did force Enloe to make significant compromises and concessions. Several houses were either removed or demolished.

Just as significant, the folks who coalesced around that effort became the Chico Avenues Neighborhood Association, the first such group in town and the prototype for the Barber Neighborhood Association, in southwest Chico, that emerged a year later. Both have participated in creating plans for their neighborhoods, and CANA has obtained a multimillion-dollar financial commitment from the city, as well.

Other forces have been at work in improving some of the older neighborhoods in Chico. This is especially noticeable in the neighborhood east of downtown and the area south of Little Chico Creek and west of Park Avenue.

One is the growing interest on the part of many people to live in older, well-established neighborhoods close to downtown rather than suburbia. When that interest merged with the increasing values of older properties, it led many owners to refurbish their homes. For a while, restored houses on East Sixth Street, for example, were selling for $300 a square foot, as much or more than any other properties in town.

As the housing market has cooled, sale prices have gone down, but only slightly, and restored older homes throughout Chico are still valuable. If anything, skyrocketing gas prices have added to the attractiveness of centrally located homes, and it’s a virtual certainty that when the housing market warms up again, as it inevitably will, the value of restored homes will follow suit.

The people who live in older neighborhoods aren’t the only ones who want them to be protected and restored, either. As part of its general-plan-update process, the city recently sponsored a phone survey of residents’ attitudes on a range of issues. Asked how important it was to revitalize older neighborhoods and business districts that are becoming run down, 87 percent said it was important, very important or extremely important. Even more, 89 percent, said the same thing about preserving historic buildings and homes.

John Gallardo has an interesting theory about restoring historic neighborhoods. “To me, it’s contagious,” he said. “If somebody fixes up a house, others do too. … Is it coincidence that the East Sixth and Seventh streets neighborhoods are taking off? I don’t think so.”

At the same time, creating tools such as a historic-preservation ordinance will help. Currently the city has only one specially designated historic district, in the immediate South Campus neighborhood, where some 168 of the houses on the CHA inventory are located.

Those houses are almost automatically eligible for a Mills Act contract and to use the city’s historic-preservation code, rather than the much stricter uniform building code, in refurbishing. The historic-district zone also calls for a 90-day cooling-off period, during which alternative courses can be considered, when demolitions or radical alterations are proposed, though it has little in the way of teeth beyond that.

One of the goals of the new historic-preservation program, said Bob Summerville, the senior planner with the city who will be writing the ordinance, is to identify other historic neighborhoods and apply a historic-district zoning overlay to them, thereby extending the protections of the ordinance to them.

Gallardo hopes and assumes the city’s decision to create the ordinance means it will take a much more active role in protecting these neighborhoods. He points to the Waterland Apartments, on Normal Street between Third and Fourth, as an example of a classic historic structure that is threatened.

“It’s been vacant for several years, and it doesn’t seem to be getting much care,” he lamented.

For too long, he said, Chico has been relying on people like the members of the CHA to protect the town’s older homes. “We’re just volunteers, and besides, we’re all getting older.”

Like so many of Chico’s most beautiful houses.