SR - - ANNUAL REPORTAGENDA ITEM
December 9, 2014 7771
rn,
TO: Honorable Chairman and Members
of the Board of Directors of the
Industrial Development Authority
of the City of Orange
THRU: John W. Sibley
Executive Director
FROM: Lisa L. Kim
Assistant Executive Director
Reviewed /Verified By:
City Manager
Finance Dire o
To Be Presente y:
Lisa Kim
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Plan/Environ
1. SUBJECT
Report from the Assistant Executive 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's
activities for the prior fiscal year be presented to the Board of Directors each December.
3. RECOMMENDED ACTION
Receive and file.
4. FISCAL IMPACT
The Report has no impact on the City of Orange budget. The IDA does not have an annual
budget.
5. STRATEGIC PLAN GO
2. Be a fiscally healthy community
a) Expend fiscal resources responsibly.
b) Analyze future fiscal needs and potential revenue opportunities.
c) Provide appropriate reserves.
d) Effectively manage and develop City assets.
e) Create an environment to attract, retain and expand economic opportunities.
.0� ITEM L�'-^' 1 12/9/14
6. DISCUSSION and BACKGROUND
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 December 2004, the bonds were repaid.
Discussion
In 2014, there were no outstanding bonds issued by the IDA. Staff recommends the continuation
of the IDA as it 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's Industrial Development Bond Financing Program.
Agency staff continues to promote the IDA program and benefits through the city's Economic
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.
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