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HomeMy WebLinkAbout2007-063 - Aprroving the Industrial Development Authority of the City of Santa Ana RESOLUTION NO. 2007-063 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF SANTA ANA ENTERING INTO A LOAN IN A PRINCIPAL AMOUNT NOT TO EXCEED $2,500,000 AND LENDING THE PROCEEDS OF SUCH LOAN TO INGARDIA BROS. PRODUCE, INC., AND ALLOCATING AN AMOUNT NOT TO EXCEED $2,500,000 OF THE SANTA ANA EMPOWERMENT ZONE CEILING FOR PRIVATE ACTIVITY BONDS FOR THE BENEFIT OF THE PROJECT TO BE FINANCED PURSUANT TO SUCH LOAN. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council hereby finds, determines and declares as follows: A. Pursuant to the Taxpayer's Relief Act of 1997 (the "Taxpayer's Relief Act"), the federal government has designated a portion of the City of Santa Ana (the "City") as an empowerment zone (the "Santa Ana Empowerment Zone"). B. Pursuant to the Taxpayer's Relief Act, among the tax incentives conferred on the City is the ability to issue up to $130 million in tax-exempt empowerment zone facility bonds (the "Empowerment Zone Ceiling") to make a Loan to qualifying business borrowers to finance the cost of certain commercial, retail, industrial or other facilities qualifying as "empowerment zone facilities" as that term is defined in Section 1394 of the Internal Revenue Code of 1986, as amended (the "Code"). C. As of the date of this Resolution, the City has utilized only Twenty-One Million Seven Hundred Thousand Dollars ($21,700,000) of the City's Empowerment Zone Ceiling, not counting other actions taking place this same date. D. The Industrial Development Authority of the City of Santa Ana (the "Authority") has accepted an application (the "Application") from Ingardia Bros. Produce, Inc., or a related entity, as applicable (the "Applicant"), requesting the Authority to issue its revenue bond and enter into a loan agreement pursuant to the California Industrial Development Financing Act, being Title 10 of the California Government Code, as supplemented and amended (the "Act"), to finance the acquisition of and equipping of certain facilities comprising equipment (the "Project") to be owned and operated by the Applicant, or a related entity and to be located at the Applicant's facility at 700 South Hathaway in the City of Santa Ana; and E. The Applicant has represented in the Application certain facts and information concerning the Project and the Applicant, including but not limited to the requirement that, after a two year start up period, 35% of the Applicant's employees shall be residents of the Santa Ana Empowerment Zone. Resolution No. 2007-063 Page 1 of 4 F. The City Council in evaluating the Project has relied upon the written facts and information represented in the Application by the Applicant as well as any comments made before the City Council in conjunction with the hearing on this matter. G. The Board of Directors of the Authority in its resolutions adopted on July 16, 2007, and August 20, 2007 expressed its intent to issue its revenue bond or other obligation (the "Bond") for the benefit of the Applicant, and the Applicant has revised its application to make a technical correction to its legal name and to increase the principal amount of financing requested to a revised principal amount not to exceed $2,500,000. H. The Authority has made the determinations required to be made pursuant to Section 91530 of the Act preliminary to issuing the Bond. I. The Authority approved and authorized the Bond, subject to certain conditions, on August 20,2007. J. The Authority proposes to lend the proceeds of the Bond to the Applicant. K. This City Council of the City of Santa Ana (the "City Council") has considered the information contained in the Applicant's application and has considered the determinations of the Authority. L. The Bond must be approved by the City Council to satisfy the public approval requirements of Section 147(f) of the Code and Section 91530(f) of the Act. M. It is intended that this Resolution shall constitute the approval of the Project and the Bond as required by Section 147(f) of the Code and Section 91530(f) of the Act. N. The City Council is the elected legislative body of the City and is one of the applicable elected representatives required to approve the execution and delivery of the Bond under Section 147(f) of the Code. O. The Authority has requested that the City Council approve the execution and delivery of the Bond by the Authority to satisfy the public approval requirement of Section 147(f) of the Code. P. Pursuant to Section 147(f) of the Code, prior to their execution and delivery, private activity bonds are required to be approved by the "applicable elected representative" of the governmental units on whose behalf such obligations are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by such obligations is to be located, after a public hearing held following reasonable public notice. Q. There has been published, at least 14 days prior to the date thereof, in a newspaper of general circulation within the City, a notice that a public hearing regarding the Bond and the loan of the proceeds to the Applicant would be held on August 20, 2007. Resolution No. 2007-063 Page 2 of 4 R. Such public hearing was conducted on said date by the City, at which time an opportunity was provided to interested parties to present arguments both for and against the issuance of the Bond. S. The Board of Directors of the Santa Ana Empowerment Corporation, at its regular meeting of July 25, 2007, unanimously recommended approval of this action by the City of Santa Ana and the Industrial Development Authority of the City of Santa Ana. Section 2. The City Council hereby finds and determines that the Project will provide significant public benefits to residents of the Santa Ana Empowerment Zone. Section 3. The City Council hereby approves the Project and approves the Authority issuing the Bond to GE Government Finance, Inc. in an amount not to exceed $2,500,000 pursuant to a loan agreement (the "Bond") by and among the Authority, the Applicant and GE Government Finance, Inc. to finance on a tax-exempt basis the costs of the Project, which Bond and interest thereon shall be paid from revenues received by the Authority from the Applicant pursuant to the Loan Agreement. This resolution shall constitute both "host" and "issuer" approval of the Bond within the meaning of Section 147(f) of the Code and approval of the Bond for purposes of Section 91530(f) of the Act. Section 4. The Authority is hereby designated as an issuer in an amount of the Empowerment Zone Ceiling equal to $2,500,000 for the benefit of the Applicant (the "Allocation"). Such Allocation may only be used by the Authority for the Project, as specifically described herein and represented in the Application. The Authority is not authorized to transfer the Allocation set forth herein to any other governmental unit in the State except the City. Section 5. All actions heretofore taken by the officers, employees and agents of the City with respect to the approval of the Bond are hereby approved and ratified, and the officers and employees of the City and their authorized deputies and agents are hereby authorized and directed, jointly and severally, to do any and all things to execute and deliver any and all certificates and documents which they, bond counsel and the Authority Attorney and the City may deem necessary or advisable to consummate the issuance of the Bond and the loan of the proceeds to the Applicant and otherwise effectuate the purposes of this Resolution. Section 6. Neither the faith and credit nor the taxing power of the State, the City, the Authority or any political subdivision of the State, is pledged to the payment of the principal of, premium, if any, or interest on the Bond, nor is the State or any political subdivision of the State, in any manner obligated to make any appropriation for such payment. The Authority has no taxing power. Section 7. This Resolution shall take effect from and after its adoption. ADOPTED this 20th day of August 2007. Resolution No. 2007-063 Page 3 of 4 APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney By: ('lf~ Lorena C Penalo Assistant City Attorney CERTIFICATION OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2007-063 be the original resolution adopted by the City Council of the City of Santa Ana on AUQust 20,2007. Date: ~ /2-7f7 ~ Patricia E. Healy Clerk of the Council City of Santa Ana Resolution No. 2007-063 Page 4 of 4