| | | | | | | | Agenda Item - 2.a.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | Lisa L. Kim
| | Dept.: | Director
| Dept.: | Economic Development
| | Subject: | Receive and file the annual report for the Industrial Development Authority. (Action Item) | Date: | 12/12/2017 |
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| | | | | | | | OBJECTIVE
The purpose of this report is to provide the Garden Grove Industrial Development Authority (IDA) an annual report on the activities of the IDA and the California Industrial Development Financing Advisory Commission (CIDFAC) for 2017. |
| | | | | | | | BACKGROUND
In 1982, the City of Garden Grove formed the IDA. Under the State of California guidelines, the IDA acts as the official local coordinating body for low-cost development bonds for industrial companies seeking expansion. The IDA’s role is to assist industrial-related businesses by facilitating their request for tax-exempt Industrial Development Bonds (IDB).
Although the IDA may convene a Special Meeting to facilitate IDB financing request, the IDA must meet yearly as stated in its By-Laws. At the annual meeting, the IDA reviews actions of the CIDFAC, which approves the issuance of IDB’s as a partner with local government, and the actions of the California Debt and Investment Advisory Committee (CDIAC), which provides policy guidelines with respect to public debt and investment activities.
The City has not had any IDB applicants over the last several years, due to the current low interest rate environment. |
| | | | | | | | DISCUSSION
The IDA can assist the issuance of tax-exempt bonds provided that the company uses the bond proceeds to:
- Foster job expansion or job development;
- Fund industrial, manufacturing, or agricultural projects that create tangible products for sale;
- Fund land, building construction, new equipment or furnishings; and
- Fund cost of architects, engineers, attorneys and permits.
As of November 16, 2017, the IDA has had no request for IDB financing assistance.
Staff recommends the continuation of the IDA program as an economic development tool offering industrial and manufacturing businesses alternative sources of financing for land acquisition, construction, and rehabilitation, and infrastructure improvements for businesses in the city of Garden Grove. Economic Development staff will continue to promote the IDA program as part of its economic development strategy. |
| | | | | | | | FINANCIAL IMPACT
None. If a qualified industrial business seeks IDB financing, the IDA would only act as a liaison in the State bond process. Therefore, there is no financial impact or obligation by the City. |
| | | | | | | | RECOMMENDATION
It is recommended that the Industrial Development Authority:
- Receive and file the 2017 update of the California Industrial Development Financing Advisory Commission and the 2017 update of the California Debt and Investment Advisory Committee.
By: Monica Covarrubias
Project Manager
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