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Public Hearing - Bond Allocation for Cramer-Decker Industries December 20, 2004 Page 2 2. Recommended that the Industrial Development Authority adopt a resolution authorizing entering into a loan agreement pursuant to which the Authority will borrow and lend to borrower not to exceed $3.8 million for the acquisition, construction and installation of certain property and facilities, and authorizing various actions in connection therewith. By a vote of 11:0 (Absent: Anton, Bracho, Brewster, Burrier-Lund, Forgarty, Haro, Medrano, and Mejares) at its Regular Meeting of September 22, 2004. DISCOSSION One of the incentives available to businesses within the Santa Ana Empowerment Zone is an allocation of $130 million for the issuance of private activity bonds to qualified businesses. Currently, the Empowerment Zone has issued two prior bonds to Gold Coast Baking Company and Laguna Cookie Company, thus reducing the original allocation by 17 million. The City has received an application from Cramer-Decker Industries requesting assistance in financing the acquisition of property located in the Santa Ana Empowerment Zone (1641 St. Andrew Place). The financing also includes the acquisition and installation of warehouse equipment. As a condition of financing, 35 percent of Cramer-Decker Industries' Santa Ana workforce must be Empowerment Zone residents. Currently, Cramer-Decker Industries employs 40 employees and is prepared to comply with the 35 percent employee residence rule. Started in 1981, Cramer-Decker Industries is a world leader in the scuba diving, compressed gas, and medical respiratory industries for over twenty- five years. Currently headquartered in Irvine, Cramer-Decker Industries is looking to consolidate its headquarters and warehouse operations into a new 41,700 square foot facility. The new facility is located in the city's State Enterprise Zone and Federal Empowerment Zone. Cramer-Decker Industries is requesting $3.8 million for their acquisition of the property. In addition to receiving approval by the Industrial Development Authority, the Tax Equity and Fiscal Responsibility Act (TEFRA) imposes public hearing requirements for tax-exempt bonds. Before bonds can be sold, the legislative body within the jurisdiction where the project is located must hold a public hearing at which time the public may discuss the project and the issuance of the bonds. Notice of the public hearing was published in the O. C . Reporter on November 1, 2004. Bonds issued by the Industrial Authority are not an obligation of the Authority or the City. The law firm of Hawkins, Delafield & Wood LLP has been retained to serve as bond counsel and CSG Advisors has been retained as financial advisor. 758-2