The Carmel City Council puts the brakes on a property tax break for a wealthy landowner.

In 1945 a widow named Della Walker, known formally as Mrs. Clinton Walker, wrote a short letter to Frank Lloyd Wright, in hopes the famed architect would design a home for her in Carmel. “I own a rocky point of land in Carmel, Calif. extending into the Pacific Ocean,” Walker wrote. “I am a woman living alone – I wish protection from the wind and privacy from the road and a house as enduring as the rocks but as transparent and charming as the waves and as delicate as a seashore You are the only man who can do this – will you help me?”

Wright said yes. He designed a house made up of a repeating pattern of triangles and hexagons on a foundation of Carmel stone, which looks like the bow of a ship pushing through the waves. It was constructed in 1951-1952. Wright called it Walker’s “cabin on the rocks.”

In February 2023, the home was sold for $22 million to Esperanza Carmel, the company founded by Patrice Pastor, a wealthy developer from Monaco who’s purchased multiple Carmel parcels in recent years. In April, the company applied for a Mills Act contract with the city for the Wright-designed home, looking for a significant reduction in property taxes, in exchange for maintenance to preserve the historic home.

Since joining the voluntary state program in 2010, Carmel has approved 14 Mills Act contracts, with the amount of property tax reduction determined by the County of Monterey Assessor’s Office using a complex formula. Carmel’s Mills Act properties have received reductions of between 50-85 percent. In December, Carmel City Council enacted a moratorium on all new Mills Act contracts while they review the city’s policy ahead of potential changes; Esperanza’s application and three others were pre-existing and not subject to the moratorium.

“We think it’s the poster house for the Mills Act,” said Christopher Mitchell, Esperanza’s representative, to the council on Dec. 5. Mitchell estimated that the $240,000 in annual property tax on the house could drop to $153,000. Carmel receives 6 percent of what owners pay, with the rest going to other entities; the reduction would mean a loss of $9,100 to the city. A list of renovations the home needs totaled $1.3 million over 10 years.

The math did not add up for three of the five councilmembers – Jeff Baron, Karen Ferlito and Alissandra Dramov. They were bothered, in part, that the Carmel Unified School District, which receives 60 percent of property taxes, would see a loss of over $90,000. Mitchell argued that it’s a loss of only 0.08 percent of the $69 million the district receives in property tax revenue.

The three said they couldn’t get past one of five criteria for a property to be eligible for the Mills Act, that the contract will represent a fair and equitable balance of public and private interests and not be a financial burden to the city. “I’ve heard [Esperanza Carmel’s] fair and equitable interest arguments, but I’m not persuaded,” Baron said. He also questioned whether the tax reduction would be greater than the amount Esperanza will pay in renovation costs.

When it became clear the contract wouldn’t pass, Mitchell agreed to a postponement, which was approved by the council 5-0. The issue will come back at a date to be determined.