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i•' c S1 Z4 I rff.Alft <br />IDA MEETING DATE: <br />JANUARY 7, 2014 <br />TITLE: <br />RESOLUTION — AUTHORIZING AMENDMENT <br />TO LOAN AGREEMENT WITH MEMORY <br />EXPERTS INTERNATIONAL (USA), INC. <br />CITY MANAGEA EXECUTIVE D <br />RECOMMENDED ACTION <br />CITY COUNCIL <br />SECRETARY USE ONLY: <br />APPROVED <br />As recommended <br />As Amended <br />Implementation Resolution <br />Set Public Hearing For <br />CONTINUED <br />FILE NU <br />Adopt a resolution approving the Industrial Development Authority of the City of Santa Ana to enter into <br />an amendment to a loan agreement in order to lower the interest rate on a tax - exempt industrial <br />development loan to Memory Experts International <br />and refinance a manufacturing facility located at the <br />together with related equipment and furnishings. <br />INDUSTRIAL DEVELOPMENT AUTHORITY <br />(USA), Inc. originally executed in 2005 to finance <br />PRIES corporate Center, 1651 St. Andrew Place, <br />Adopt a resolution authorizing entering into an amendment to a loan agreement to lower the interest <br />rate on a tax - exempt industrial development loan to Memory Experts International (USA), Inc. originally <br />executed in February 1, 2005 to finance and refinance a manufacturing facility located at the PRES <br />corporate Center, 1651 St. Andrew Place, together with related equipment and furnishings. <br />DISCUSSION <br />One of the incentives available in the Santa Ana Empowerment Zone is a federal allocation of $130 <br />million of private activity bond volume cap. Under federal tax law, the City is authorized to grant <br />allocations of this volume cap to qualified businesses in the empowerment zone. The allocations permit <br />the issuance of industrial development bonds or loans ( "IDBs ") in a total amount not to exceed $130 <br />million in order to provide capital financing. The Industrial Development Authority (Authority) can issue <br />the IDBs, but the qualified businesses are responsible for repayment. Interest on the IDBs is exempt <br />from federal and state income tax, permitting a lower cost of funds for the qualified businesses. <br />Memory Experts is a leading provider of memory, hard drive subsystems, and networking technologies <br />to the office equipment and computer industries. On December 20, 2004, the City Council adopted <br />Resolution No. 2004 -100 and allocated $4.7 million of the volume cap to Memory Experts for its project. <br />On the same date, the Authority adopted Resolution No. IDA 2004 -002 and authorized the Authorityto <br />2 -1 <br />