Monday, August 16, 2010

Bond offerings help Fairfield attract bottling company

August 16th, 2010 02:29am
Bond offerings help Fairfield attract bottling company
By Jenna V. Loceff, Business Journal Staff Reporter
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Frank-Lin to employ 160; city helps with permitting, rail access
NORTH BAY – Frank-Lin, the family-owned bottling company with 160 employees, 2,000 brands and currently located in San Jose, lost rail access and needed to move.

The California Enterprise Development Authority issued the first Recovery Zone Facility Bond through the state’s reallocation process to Frank-Lin totaling $22 million to help finance a 298,000-square-foot industrial building in Fairfield.

Curt Johnston

Curt Johnston, the Economic Development Division manager at the city of Fairfield, said the recovery zone bond issued came out of the stimulus package.

“It was from Build America bonds,” he said. “There were tiny allocations given to jurisdictions all over, and we went to the state and we encouraged them to create a system where the small bonds could be packaged together and used for larger projects.”

It was done, and the Frank-Lin plant is the first to be financed this way.

The Recovery Zone Facility Bonds were created through the Recovery Act. The federal government gave direct allocation, or the ability to issue these bonds to large cities and counties with a population greater than 100,000 that experienced an increase in unemployment in 2007 when compared to the national average, according to the California Enterprise Development Authority.

The reallocation process was developed as a way for any business in a city or county in the state of California that had a small direct allocation to access this bond program.

That is how the direct allocation of $1.4 million was able to be supplemented by $20.599 million in reallocation from the state.

Because Frank-Lin ships product from the distillery in tank cars and then blends and bottles it, rail access was required wherever the plant was located.

“At the current location, rail was across the street, and the city assisted with getting a line across to the site,” Mr. Johnston said.

He said because of the fast approval process Fairfield has, the permitting process was done expeditiously.

“It was just eight weeks,” he said.

The entire project is $34 million, and there was public financing for permit fees.

He said $1.9 million was paid for rail crossing and permit fees as well as adjacent public improvement to be paid off on tax bills over the next 30 years.

In addition to working to get all the financing together, the city helped out with a fee deferral agreement and a public improvement deferral to get the project going.

They are in the planning stage of the second phase, which will be an additional 78,000 square feet.

The expectation is that this will open up 160 jobs in the fall.

Mr. Johnston said the company will “encourage many people to move. If employees are able to relocate, they will be able to find affordable housing in Solano County.”

Mr. Johnston said Frank-Lin is not the only project in the area, and there is a fair amount of activity given the economy.

He said one of the things the city has been able to help out with is the question of why people would want to do business in Fairfield.

It has created a marketing campaign about the central location in Northern California with pre-approved business parks with shovel-ready sites.

Mr. Johnston acknowledged that the number of industrial and office deals is low, and speculative industrial development is not occurring because of the tight credit market.

But he said there are some good signs.

“Permits for new single-family homes are on pace to match the total from last year at about 150 permits,” he said. “It’s much better than 2008 when only 34 permits for single-family homes were issued in Fairfield.”