A Santa Monica City Council vote on historic property tax incentives has renewed accusations that Councilmember Jesse Zwick is operating under an unresolved conflict of interest between his elected duties and his employment with a statewide housing advocacy organization.
The controversy erupted during the council's Oct. 28 meeting when Zwick challenged three Mills Act applications that city staff had recommended for approval, despite warnings from the city attorney that denying the applications could expose Santa Monica to legal liability.
The Mills Act, a state law dating to 1974, allows cities to offer property tax reductions to owners of designated historic properties in exchange for commitments to maintain and rehabilitate the structures according to federal preservation standards. The program serves as Santa Monica's primary financial incentive for historic preservation.
The three applications under consideration — for properties at 226 Palisades Ave., 137 Hart Ave. and 1958 20th St. — would result in an estimated $12,018 reduction in annual city property tax revenue. All three properties received landmark designations in 2025 and met the city's eligibility requirements: no code violations, current property tax payments and compliance with the Secretary of the Interior's Standards for the Treatment of Historic Properties.
City staff determined the applications satisfied all requirements under state law and Santa Monica Municipal Code, which states the council "shall" approve contracts meeting three specific conditions.
Zwick moved to pause approval of the applications and requested staff return with a program that would assess "the relative public benefit versus lost tax dollars to the community." He advocated for implementing maximum assessed values or tax loss limits and a system of prioritization similar to those used in Los Angeles, Pasadena, San Diego and San Francisco.
City Attorney Jing Yeo cautioned that the municipal code's language left no discretion for denial if the three conditions were met, which staff had confirmed they were.
"The way that the code is written, if the conditions are met, there is no discretion for the council," Yeo told the council. She recommended approving the applications given the "strongly" worded code requirements, noting the applications had been submitted before May and worked through the process for months.
When Zwick questioned whether he agreed with the findings that the applications provided public benefit, Yeo reiterated that the three required findings under current code focused on violations, tax delinquency and compliance with preservation standards — not a broader cost-benefit analysis.
Zwick also raised concerns about work plans that included routine maintenance items like tree trimming, questioning why such mandated property owner responsibilities would justify tax benefits. He further inquired about alleged unpermitted work on one property, which staff said did not exist.
City Design and Historic Preservation Planner Stephanie Reich explained that property owners typically perform substantial rehabilitation before applying for both landmark designation and Mills Act status, and that work is included in calculations. She said the program ensures tax benefits return to building preservation, with work programs often totaling more than the 10-year tax reduction.
"The incentive of the program is there so that people will be incentivized to designate their properties and maintain them over time," Reich said.
Councilmember Ellis Raskin challenged Zwick's concerns, noting the general fund impact represented less than one-tenth of 1% and that none of Zwick's proposed policy changes had been agendized for discussion.
"We've got applications here that meet all the criteria that we are required to approve," Raskin said. "I'm happy to continue this discussion at a future meeting, but I think we should move on."
Raskin moved to approve the applications, with Mayor Lana Negrete seconding. Zwick ultimately withdrew his substitute motion, and the council unanimously approved the three Mills Act contracts.
The debate prompted the North of Montana Association to send a letter titled "Recuse or Resign, but Santa Monica Must Come First," accusing Zwick of an ongoing conflict of interest with his employer, the Housing Action Coalition.
HAC's website describes Zwick's role as "advancing pro-housing solutions across the region by building our membership base and advancing our political and legislative goals." The NOMA letter claims the organization has publicly opposed Mills Act eligibility for single-family properties, viewing historic preservation regulations as barriers to housing development.
NOMA's letter cited HAC's 2025 legislative strategy document, which references Assembly Bill 610 — a HAC-sponsored bill aimed at preventing cities from creating historic designations to block housing after their housing elements are certified. The letter argued Zwick's participation created "more than a perception of impropriety."
"Knowing his employer's position, it is stunning that Mr. Zwick did not recuse himself from this discussion and vote," the letter stated. "If Mr. Zwick is unwilling to recuse himself from discussions and votes like this, then he must resign."
Zwick defended his participation, stating his employer "does not advocate for or against the preservation of historic housing, nor the utilization of tax credits to subsidize this effort, nor does it even maintain a position on these questions."
He clarified that AB 610 "does not feature the Mills Act in any way" and addresses a different scenario involving cities designating new historic districts specifically to block promised housing production.
When Zwick joined HAC earlier this year, he said he had "worked closely with attorneys at the city of Santa Monica and those at my new employer to ensure that I keep my two worlds completely separate and avoid any conflict of interest."
"In the rare instance in which a vote at city council may present a conflict I will of course be recusing myself, as all council members are obliged to do," Zwick said at the time.
The Santa Monica City Attorney's Office has said recusal decisions are made case-by-case. Zwick previously said he requested the city seek independent legal analysis from both the California Fair Political Practices Commission and outside counsel.
Editor's Note: This story has been corrected to say the NOMA letter states HAC has opposed the Mills Act.