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CEDA’s IDB Program Supports California Manufacturers & the Passing of AB 1547 Removes Barriers to this Low-Cost Financing Tool

Manufacturing Day 2018

Since 2012, the first Friday of October has been designated as Manufacturing Day℠ or MFG DAY to celebrate manufacturing successes. This year it is October 5, 2018.  The National Association of Manufacturers (NAM) produces MFG DAY annually with support from the Hollings Manufacturing Extension Partnership (MEP) and the Manufacturing Institute (MI).  Each year, manufacturers invite a variety of audiences (businesses, students, media, etc.) to their facilities to educate them about all that manufacturing encompasses and the industry’s career possibilities, ultimately improving perceptions about manufacturing.

Visit a manufacturer in October in support of MFG DAY℠ 2018
Click here to find a participating manufacturer in California.

Industrial Development Bonds and the Passing of AB 1547

On Friday, September 21, 2018, Governor Brown signed Assembly Bill 1547. Authored by Assemblymember Sharon Quirk-Silva, AB 1547 eliminates the California Industrial Development Financing Advisory Commission (CIDFAC) and, as a result, removes a barrier for small-to-medium sized manufacturers trying to access low-cost financing through Industrial Development Bonds (IDBs).  Since AB 1547 has been signed into law, manufacturers can now access financing tools more easily and build facilities at a lower cost than as previously administered through CIDFAC.

The California Enterprise Development Authority (CEDA) supports manufacturing in California through its role as Issuer of tax-exempt IDB financings which cover up to $10 million in project costs for manufacturers that meet the applicable criteria. Over the past few years, CEDA has been pleased to support the growth of these four manufacturers:

  •  Bay Photo Lab is a professional quality photographic printing and finishing laboratory in Scotts Valley, CA (Santa Cruz County).  Founded in 1976, Bay Photo Lab specializes in wedding, portrait, sport, school, and landscape photography and provides a variety of products to the photographic community, including digital prints and proofs, large format prints, mounting and framing, canvas prints, and much more.  This manufacturer refinanced existing debt and requested additional funding for new capital expenditures under this $12 million deal.  The savings and expansion opportunities that Bay Photo is expected to experience under this deal enables them to put more money back into operations, retain 300 jobs, and generate up to 20 new jobs.
  •    Spooner’s Woodworks, Inc. was established in 1980 and has become one of the premier architectural woodwork firms in Southern California specializing in high-end millwork and production casework. The project which Spooner’s financed through CEDA in 2015 included the purchase of an existing industrial building containing approximately 58,000 square feet for the purpose of consolidating operations into a single building aiming to enhance efficiencies and allow the manufacturer to grow its business. Spooner’s estimated that the project will assist the company to retain its current 75 employees and add approximately 10 new employees within two years of project completion.
  •  Harris Industrial Water Treatment, Inc. d/b/a Puretec was founded in 1944 and has been owned and operated by four generations of the Harris family.  Puretec is an innovative industrial water services company that designs, engineers, manufactures, distributes, installs and services water treatment and purification systems. Puretec’s systems utilize a variety of technologies, including reverse osmosis, deionization, water softening and numerous filtering technologies that remove suspended particles, bacteria, viruses and gasses.  The IDB financing through CEDA provided Puretec an opportunity to expand its operations at its site in the Silicon Valley.
  •  Founded in 1951, Gordon Brush Mfg. Co., Inc. is a leading manufacturer of brushes for industrial and commercial applications for a variety of industries and purposes, including aerospace, printed circuit board production, food production, medical, healthcare, forensic investigation and janitorial services. Financing through CEDA’s IDB program helped the company, located in Southern California, to partially fund the acquisition of an industrial building at their project site to expand their operations within the state.  It was estimated that this project financing enabled the company to retain approximately 73 jobs and create approximately 44 new jobs.
IDBs are tax-exempt securities issued by cities, counties, and joint powers authorities, such as CEDA, to provide small- to medium-sized manufacturers money for land purchases, building construction, facility expansion, new production equipment acquisition, and solar and energy conservation retrofits. Benefits of IDB financing include below market interest rates, long-term financing, and it is available statewide without limitations to specific areas or communities. Overall, IDB financing reduces total financing costs so more capital can be invested back into the organization’s operations.