Agenda Item
City Council
Item #: 9.1. 11/15/2022 File #: 22-0612
TO: Honorable Chairman and Members of the Board of Directors of the Industrial Development Authority of the City of Orange
FROM: Will Kolbow, Finance Director
1. SUBJECT
Report from the Finance Director of the Industrial Development Authority of the City of Orange.
2. SUMMARY
The Bylaws of the Industrial Development Authority require that a report of the Authority’sactivities for the prior fiscal year be presented to the Board of Directors within six months following the end of the fiscal year.
3. RECOMMENDED ACTION
Receive and file.
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 required to repay the bonds in full. In City of Orange Printed on 11/10/2022Page 1 of 2
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Item #: 9.1. 11/15/2022 File #: 22-0612
December 2004, the bonds were repaid.
In 2022, there were no outstanding bonds issued by the IDA. The IDA is a unique economic development tool that offers industrial and manufacturing businesses an alternative source of financing for land acquisition, construction, and rehabilitation in Orange, through the State’sIndustrial Development Bond Financing Program. At this time, the California Infrastructure and Economic Development Bank is not currently accepting applications for IDBs. However, this situation may change in 2023. Therefore, staff recommends the continuation of the IDA as there is minimal administration required to keep it going and having it available as an economic development tool.
Staff continues to promote the IDA program and benefits through the City’sEconomic Development website, outreach to the brokerage community specializing in industrial and manufacturing tenants, and ongoing communication with local manufacturing businesses in Orange.
7. ATTACHMENTS
· None
City of Orange Printed on 11/10/2022Page 2 of 2
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