TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Aaron Schulze, Economic Development Manager
1. SUBJECT
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Industrial Development Authority of the City of Orange Report.
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2. SUMMARY
The Bylaws of the Industrial Development Authority require that a report of the Authority's activities for the prior fiscal year be presented to the Board of Directors by December of each year.
3. RECOMMENDED ACTION
recommendation
Receive and file.
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4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
e: Create an environment to attract, retain, and expand economic opportunities.
6. DISCUSSION AND BACKGROUND
The California Industrial Development Financing Advisory Commission (CIDFAC) administers the State's Industrial Development Bond Financing Program and approves issuance of Industrial Development Bonds (IDB). IDBs provide manufacturing and processing companies low-cost, low- interest financing for capital expenditures. Eligible capital expenditures include the acquisition of land, building construction, building renovation and the purchase of machinery and equipment. CIDFAC is a state agency within the California State Treasurer's Office.
The Industrial Development Authority (IDA) of the City of Orange was established in 1997 to provide an alternate method of financing for Control Air Conditioning (Control Air) to relocate its manufacturing facility into Orange. The IDA was the issuer for tax-exempt industrial development bonds in the amount of $5 million on behalf of Control Air in May 1997. The IDA only acted as a conduit for issuance of the bonds. It was the sole responsibility of Control Air to repay the bondholders.
In 2004, Control Air needed to expand its operation but was unable to find a suitable expansion location in Orange. In November 2004, Control Air relocated its manufacturing facility to Anaheim and subsequently sold its property in Orange. Control Air was req...
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