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HomeMy WebLinkAbout1995-04-04; Industrial Development Authority; 001; Approval Of Inducement Resolutions For CIPI INDUST’ ‘IL DEVELOPMENT AUTHOF Y - AGENDA BILL:. 4~ Yopk //J /y 9B# 06/ TITLE: APPROVAL OF INDUCEMENT RESOLUTIONS DEPT. HO. WTG. 4/4/95 FOR CIP LIMITED/AALTO SCIENTIFIC LTD. AND DEPT. ED CIP LIMITED/ASYMPTOTIC TECHNOLOGIES v ?ECOMYENDED ACTION: - -.. ADOPT Resolution No. 001 APPROVING the California Industrial Development Financing Advisory Commission Project Application and declaring the present intention of the Industrial Development Authority of the City of Carlsbad to issue Industrial Development Revenue Bonds on behalf of CIP Limited and Aalto Scientific Ltd. ADOPT Resolution No. 002 APPROVING the California Industrial Development Financing Advisory Commission Project Application and declaring the present intention of the Industrial Development Authority of the City of Carlsbad to issue Industrial Development Revenue Bonds for CIP Limited and Asymptotic Technologies (a.k.a Asymtek). ITEM EXPLANATION As part of an enhanced Economic Development program, the City Council formed the Industrial Development Authority of the City of Carlsbad. In 1980, The California state legislature passed the California Industrial Development Financing Act, which enabled every city and county in the state to create an industrial development authority (IDA). The Act authorized each IDA to issue tax-exempt industrial development revenue bonds (IDRBs) to finance eligible capital facilities for small manufacturing businesses. Industrial Development Revenue Bonds provide manufacturers in California with an alternative, low- cost source of funds to finance their capital expenditures which will, in turn, increase employment or otherwise contribute to economic development. Funded projects must generate substantial public benefits in return for the implicit public subsidy of tax exemption. The Act also created the California Industrial Development Financing Advisory Commission (CIDFAC) to advise local IDAs and independently review IDRB applications for the provision of public benefits, and approve the sale of IDRBs by the local authority. Both federal and state statutes govern the eligibility of projects for tax-exempt IDRBs. The federal restrictions are primarily contained in the Internal Revenue Code of 1986 and Treasury Regulation Section 103. These requirements affect the use of proceeds, volume limitations and several technical aspects of bond issuance. The State of California, establishes further requirements for approval of IDRB projects, specifically with regard to the categories of projects which are eligible. Recently, the City received a request from CIP Limited (a build-to-suit developer), and two of CIP’s prospective manufacturing tenants, to consider the issuance of tax-exempt Industrial Development Revenue Bonds (IDRBs). IDRBs offer preferential financing terms for projects which meet certain qualifying requirements. Qualifying projects may finance the purchase of land, fund the rehabilitation of a facility, purchase or lease equipment, and finance interest payments and closing costs. IDRBs are available for new projects or expansions. - Page Two of Agenda Bill No. db/ The Industrial Development Revenue Bond issue proposed would be privately placed with First Interstate Bank, with bond proceeds funding construction of the two new manufacturing facilities in Carlsbad. In a private bond placement, bonds are purchased by a bank who agrees to hold them for a minimum period of time in their portfolio, thus the transaction resembles a traditional two-party bank loan. Benefits of a privately placed issue include significant cost savings to the borrower and no requirement for a Letter of Credit or other credit enhancement. Repayment of the Industrial Development Revenue Bonds comes directly from the private sector borrower, not the issuing authority or municipality. The issuer of the bonds becomes a “conduit issuer”, and has no financial obligation to the bond holders. AALTO SCIENTIFIC: One of the projects the City is being asked to consider is a bio industrial firm called Aalto Scientific Ltd. Aalto Scientific manufactures raw materials, both biological and biochemical in nature, for the diagnostic reagent industry. In addition, the company manufactures a broad line of proficiency survey specimens which are distributed by various American, European and Asian professional scientific societies for the purpose of monitoring quality assurance in clinical and medical laboratories. Major customers of the company include: Abbott Laboratories, DuPont, Eastman Kodak, Merck, Boehringer Manwheim GMbH, Oriental Yeast Corporation, College of American Pathologies and various other high- tech/biotech firms. Aalto is currently headquartered in a 9500 square foot industrial facility in Vista, California. However, in order to accommodate their anticipated growth, they will need to relocate to a larger facility. Their new Carlsbad headquarters will be more than twice the size of their existing facility (21,415 square feet). The new facility will be located in the Carlsbad Airport Center Business Park at 1959 Kellogg Avenue. The new headquarters will serve the office, manufacturing, research and development, and warehousing needs for the company for the next decade. Aalto Scientific will retain all current employees (17) with the relocation. In addition, the company projects that their staffing levels will more than double in the next 5 years. Successful development and marketing of one of the company’s new products/technology could eventually bring employment levels up to two hundred or more. ASYMTEK: The second company the Authority is being asked to consider is Asymptotic Technologies (a. k.a Asymtek). Asymtek designs and manufactures automated fluid dispensing systems. Systems are an integration of advanced electronics, mechanics, hardware, software and fluid dispensing technology. Asymtek also manufactures a line of 3-axis motion control products used extensively in benchtop automation applications. Major customers of Asymtek include: Hewlett-Packard, IBM, and Motorola. Page Three of Agenda Bill No. bO/ Asymtek is currently headquartered at 1949 Palomar Oaks Way in Carlsbad, in an 18,000 square foot facility. Asymtek also leases an additional 3000 square feet of warehouse space at 6359 Paseo Del Lago. Asymtek’s new 41,000 square foot facility will be located in the Carlsbad Oaks West Business Center. Construction of Asymtek’s new headquarters will more than double the productive output of the company. Asymtek will retain all current employees and is projected to almost double its employment by the year 2000 (from 75 to over 130). Asymtek’s sales are projected to increase from $ 11 million to $21 million within the next five years. Both of the properties are owned by CIP Limited and have approved Planned Industrial Permits and Grading Permits. Both facilities will be owned by CIP Limited with long term leases executed by Aalto Scientific and Asymtek. The term of the Industrial Development Revenue Bond issue will coincide with the term of the lease agreements. Upon approval of the CIDFAC applications and inducement resolutions by the Industrial Development Authority, the financing application will be forwarded to CIDFAC and the California Dept Limit Allocation Committee (CIDLAC) for review and approval. The legislative authority to issue bonds under the Industrial Development Financing Act lapsed on December 31, 1994, and will require further state legislative action to be extended. However, bond counsel in consultation with the State Attorney General’s Office has determined that approval of the CIDFAC applications and inducement resolutions by the IDA is within the existing powers of the authority. Local agencies may therefore continue to process eligible projects, excluding‘the actual issuance of bonds. Staff has reviewed the request for IDRB issuance and is recommending that the Industrial Development Authority declare its intent to issue Industrial Development Revenue Bonds based upon the following findings: 1. Each project will be a substantial factor in the accrual of employment benefits and consumer benefits which will result from use of the facilities and that the benefits exceed any public detriment from the issuance of the Bonds in the maximum principal amount proposed. 2. Financing and operation of each project will generate employment benefits from the community by increasing the number of employees of the Company within ‘the community. 3. The use of both proposed facilities qualifies under Government Code 391503(a)(l) as an industrial manufacturing use. 4. Each project will be in accord with the purposes and requirements of the California Industrial Financing Act, in that they will enhance and promote economic development and increase opportunities for useful employment. 3 Page Four of Agenda Bill No. do/ FISCAL IMPACT Issuance of Industrial Development Revenue Bonds does not create any financial obligation for the City or the Industrial Development Authority. Any costs related to the issuance of IDRBs will be paid by the private party benefitting from the bond issue. Staff will prepare a Council Policy Statement on IDRBs for review and consideration prior to the actual issuance of Industrial Development Revenue Bonds for these projects. As a part of the policy, Council may elect to establish an administrative fee to off-set any administrative expenses incurred as a result of bond issuance. EXHIBITS 1. 2. 3. Resolution No. 001 approving the CIDFAC Application and declaring the intent to issue Industrial Development Revenue Bonds for CIP Limited and Aalto Scientific. Resolution No. 002 L approving the CIDFAC Application and declaring the intent to issue Industrial Development Revenue Bonds for CIP Limited and Asymptotic Technologies. CIDFAC Application - Aalto Scientific/Asymtek 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 001 A RESOLUTION OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF CARLSBAD APPROVING THE CALIFORNIA INDUSTRIAL DEVELOPMENT FINANCING ADVISORY COMMISSION PROJECT APPLICATION AND DECLARING THE INTENT TO ISSUE INDUSTRIAL DEVELOPMENT REVENUE BONDS FOR CIP LIMITED AND AALTO SCIENTIFIC LIMITED. WHEREAS, the Industrial Development Authority of the City of Carlsbad (the “Authority” herein) has been duly activated by Ordinance No. NM01 of the City of Carlsbad (the “City”), and the City Council of the City has been duly authorized to act as the Board of Directors of said Authority; and WHEREAS, Aalto Scientific, Ltd., a general partnership, and CIP Limited, a California limited partnership (collectively, the “Company” herein), has submitted its Application for the issuance of Bonds on behalf of its proposed Project as described therein, attached hereto as Exhibit 3 and incorporated herein by reference, all as such terms are defined in the ’ California Industrial Development Financing Act (California Government Code § 91500 et seq.) (the “Act” herein) which Application Complies with all authority requirement therefor; and WHEREAS, said Project involves the purkhase of approximately 1.54 net acres of industrial land at 1959 Kellogg Avenue in the City and the construction of an approximately 21,415 square foot facility to be occupied by Aalto Scientific, Ltd; and WHEREAS, the Authority wishes to secure for the people of the City the public benefits which will accrue as a result of the financing of the Project and to express the preliminary intent of the Authority to issue Bonds on behalf of the Project; and WHEREAS, City staff has reviewed said Application and has prepared its report with regard thereto. NOW, THEREFORE, BE IT RESOLVED by the Industrial Development Authonty of the City of Carlsbad, California as follows: 1. That the above recitations are true and correct. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. That the application of the Company for financing pursuant to the Act is hereby accepted. 3 The Authority hereby finds and determines with respect to said Application as follows: (a) It is likely that the undertaking of the Project by the Authority will be a substantial factor in the accrual of the employment benefits and consumer benefits which will result from the use of the facilities, all as proposed in the Application. These public benefits will substantially exceed any public detriment from the issuance of the Bonds in the maximum principal amount proposed in the Application. (b) The financing of the Project and the resultant operation of the Project will generate employment benefits for the community by increasing the. number -of employees of the Company within the community. The Company estimates current employment of 17 employees, which is expected to increase to 37 in the first 5 years of operation. Moreover, the Company estimates that its sales will increase substantially within five years of completion of the Project. (c) The use of the facilities to be financed pursuant to the Company’s Application qualifies under Government Code § 91503(a)(l) as an industrial use for the manufacture of human enzymes, proteins and control sera. (d) The Project, as proposed in the Application, is in accord with the purposes and requirements of the Act in that the proposed Project will enhance and promote economic development and increase opportunities for useful employment, all as set forth in the Application. (e) Aalto Scientific, Ltd. has properly notified the City of Vista that it is intending to move from its present facilities in that community, as required by the Application Guidelines issued by the California Industrial Development Financing Advisory Commission. 2 I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 ’ 21 22 23 24 25 26 27 28 4. The Authority hereby declares its present intention to issue Bonds on behalf of the Company to finance the acquisition and construction by the Company of the Project described in the Application and recitals hereof, in -a principal amount of approximately $1,336,980.00, and in no event to exceed $10 million, and for the purposes described in the Application, a copy of which is on file with the City Clerk of the City. 5. Bonds, if any are issued, shall be issued in accordance with the Act, and shall be secured by the Project, together with any additional security necessary to ensure the marketability of the Bonds. 6. In no event shall the Bonds constitute a pledge of the faith and credit of the City, the State of California, or any political subdivision of the State and the City shall not be liable to make any appropriations for repayment of the Bonds. The Bonds shall constitute a mere special obligation of the Authority payable solely out of the revenues or other sources provided for in the Project Agreement and proceedings to be provided hereafter. 7. This resolution is adopted as official action of the Authority in order to comply with Treasury Regulation Q 1.1038T and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of Authority expenditures incurred prior to the date of issue of the Obligations, is a part of the Authority’s official proceedings, and will be available for inspection by the general public at the main administrative office of the Authority. 8. Anything to the contrary herein not withstanding, in no event shall this resolution bind the Authority in any way, shape or form to proceed with the Project and shall be subject in all respects to the unfettered discretion of the Authority with respect to the issuance of Obligations for such Project. Moreover, the issuance of any Obligations shall be subject to compliance in all respects with all environmental, regulatory and other requirements which the Authority is subject to or may reasonably impose, the sole purpose 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of this resolution being to serve as official action under Treasury Regulation Sections 1.103 8T and 1 .150-2 and acceptance of the application under Government Code Section 91530(c). In any event, the Authority acknowledges it may not issue Bonds until such time, if ever, as the State Legislature provides authority for the issuance of the Bonds for such purposes pursuant to the Act, which authority has lapsed by reason of the operation of Government Code Section 91521.3 set forth in the Act. 9. A copy of the Application shall be filed with the City Clerk of the City. Concurrently, a notice of acceptance of the Application and the filing with the City shall be published in a newspaper of general circulation pursuant to Section 91530(d) of the Act. Such notice shall name the Company, state the estimated maximum bond issue, and briefly summarize the proposed project. 10. A notice shall be published of the public hearing to be held before the City Council of the City with respect to said Application in accordance with Section 147(f) of the Internal Revenue code of 1986, as amended, and the Act. . . . . . . . . . . . . . . . . ,... . . . . . . . . 4 1 : < . L c . E 7 E s 1c 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a regular meeting of the Industrial Development Authority of the City of Carlsbad, California, held on the 4th day of APRIL , 1995, by the following vote, to wit: AYES: Board Members Lewis, Nygaard, Kulchin, Finnila, Hall NOES: None ABSENT: None ATTEST: _ cttk Pd A RAUTENKRANZ, Secretaqj) (SEW 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTlON NO. 002 A RESOLUTlON OF THE INDUSTRIAL DEVELOPMENT AUTHOfWY OF THE CITY OF CARLSBAD APPROVING THE CALIFORNIA INDUSTRIAL DEVELOPMENT FINANCING ADVISORY COMMISSION PROJECT APPLICATION AND DECLARING THE INTENT TO ISSUE INDUSTRIAL DEVELOPMENT REVENUE BONDS FOR ClP LIMITED AND ASYMPTOTlC TECHNOLOGIES (AKA ASYMTEK). WHEREAS, the Industrial Development Authority of the City of Cartsbad (the “Authority” herein) has been duly activated by Ordinance No. NS-301 of the Cii of Carlsbad (the “City”), and the City Council of the City has been duly authorized to act as the Board of Directors of said Authority; and WHEREAS, Asymtek,’ a California corporation, and CIP Limited, a California limited partnership (collectively, the “Company” herein), has submitted its Application for the issuance of Bonds on behalf of its proposed Project as described therein, attached hereto as Exhibit 3 and incorporated herein by reference, all as such terms are defined in the California Industrial Development Financing Act (California Government Code Q 91500 et seq.) (the “Act” herein) which Application Complies with all authority requirement therefor; and WHEREAS, said Project involves the purchase of approximatety 2.97 net acres of industrial land at 2762 Loker Avenue West in the City and the construction of an approximately 41,225 square foot facility to be occupied by Asymtek; and WHEREAS, the Authority wishes to secure for the people of the Cii the public benefits which will accrue as a result of the financing of the Project and to express the preliminary intent of the Authority to issue Bonds on behalf of the Project; and WHEREAS, City staff has reviewed said Application and has prepared its report with regard thereto. NOW, THEREFORE, BE IT RESOLVED by the Industrial Development Authority of the City of Carlsbad, California as follows: 1. That the above recitations are true and correct. -. 1 2 3 4 5 6 7 0 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. That the application of the Company for financing pursuant to the Act is hereby accepted. 3 The Authority hereby finds and determines with respect to said Application as follows: (a) It is likely that the undertaking of the Project by the Authority will be a substantial factor in the accrual of the employment benefits and consumer benefits which will result from the use of the facilities, all as proposed in the Application. These public benefits will substantially exceed any public detriment from the issuance of the Bonds in the maximum principal amount proposed in the Application. (b) The financing of the Project and the resultant operation of the Project will generate employment benefits for the community by increasing the number of employees of the Company within the community. The Company estimates current employment of 75 employees, which is expected to increase to 129 in the first 5 years of operation. Moreover, the Company estimates that its sales will increase substantially within five years of completion of the Project. (c) The use of the facilities to be financed pursuant to the Company’s Application qualifies under Government Code § 91503(a)(l) as an industrial use for the manufacture of automated fluid dispensing systems. (d) The Project, as proposed in the Application, is in accord with the purposes and requirements of the Act in that the proposed Project will enhance and promote economic development and increase opportunities for useful employment, all as set forth in the Application. 4. The Authority hereby declares its present intention to issue Bonds on behalf of the Company to finance the acquisition and construction by the Company of the Project described in the Application and recitals, hereof, in a principal amount of approximately $2,176,376.00, and in no event to exceed $10 million, and for the purposes described in 2 1 2 3 4 5 6 7 0 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Application, a copy of which is on file with the City Cterk of the City. 5. Bonds, if any are issued, shall be issued in accordance with the Act, and shall be secured by the Project, together with any additional security necessary to ensure the marketability of the Bonds. 6. In no event shall the Bonds constitute a pledge of the faith and credit of the City, the State of California, or any political subdivision of the State and the City shall not be liable to make any appropriations for repayment of the Bonds. The Bonds shall constitute a mere special obligation of the Authority payable solely out of the revenues or other sources provided for in the Project Agreement and proceedings to be provided hereafter. 7. This resolution is adopted as official action of the Authority in order to comply with Treasury Regulation Q 1.1038T and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of Authority expenditures incurred prior to the date of issue of the Obligations, is a part of the Authority’s official proceedings, and will be availabie for inspection by the general public at the main administrative office of the Authority. 0. Anything to the contrary herein not withstanding, in no event shall this resolution bind the Authority in any way, shape or form to proceed with the Project and shall be subject in all respects to the unfettered discretion of the Authority with respect to the issuance of Obligations for such Project. Moreover, the issuance of any Obligations shall be subject to compliance in all respects with all environmental, regulatory and other requirements which the Authority is subject to or may reasonably impose, the sole purpose of this resolution being to seIve as official action under Treasury Regulation Sections 1.103 8T and 1.150-2 and acceptance of the application under Government Code Sectior 91530(c). In any event, the Authority acknowledges it may not issue Bonds until such time if ever, as the State Legislature provides authority for the issuance of the Bonds for suet- I 3 I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 purposes pursuant to the Act, which authority has lapsed by reason of the operation of Government Code Section 91521.3 set forth in the Act. 9. A copy of the Application shall be filed with the City Clerk of the City, Concurrently, a notice of acceptance of the Application and the filing with the City shall be published in a newspaper of general circulation pursuant to Section 91530(d) of the Act. Such notice shall name the Company, state the estimated maximum bond issue, and briefly summarize the proposed project. 10. A notice shall be published of the public hearing to be held before the City Council of the City with respect to said Application in accordance with Section 147(f) of the Internal Revenue code of 1986, as amended, and the Act. PASSED, APPROVED AND ADOPTED at a regular meeting of the Industrial Development Authority of the City of Carlsbad, California, held on the 4th day of a, 1995, by the following vote, to wit: AYES: Board Members Lewis, Nygaard, Kulchin, Finnila, Hall NOES: None ABSENT: None ATTEST: WJL) - CALIFORNIA INDUSTRlAL DEVELOPMENT FlNANClNG ADVISORY COMMISSION PROJECT APPLICATION AALTO SCIENTIFIC LOT. 1. ISSUING AGENCY: INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF CARLSBAD, CA James Elliott, Financial Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 Ph: (619) 434-2948 FAX (619) 720-9461 2. PUBLIC JURISDICTION: Cynthia Haas CITY OF CARLSBAD 2075 Los Palmas Drive Carlsbad, CA 92009-1576 Ph: (619) 438-1161 FAX (619) 438-0894 3. BOND PURCHASERS: Arthur W. McAllister, Vice President FIRST INTERSTATE BANK 707 Wilshire Blvd., W16-20 Los Angeles, CA 90017 Ph: 213-614-3652 FAX 213-614-2569 4. APPLICANT (Facility User): Aalto Scientific Ltd. 1160 Joshua Way Vista, CA. 92083 Ph: (619) 598-0903 (303) 728-6135 FAX: (619) 598-0907 Contact: Steve Mauro Shareholders: Steve Mauro 75% Robert Reynolds 25% . Steve Mauro, Chairman, C.E.O. Bob Reynolds, SecretaryjTresurer Date &I Place of Inc: CA 12/94/79 IRS returns are filed in Fresno, CA TAX I.D. #95-3424844 SIC #8071 DBA Aalto Scientific Ltd. . - A _ 5. (Borrowing Entity): CIP Limited, Ltd. A California Limited Partnership 475 W. Bradley Avenue El Cajon, CA 92020 Ph: (619) 440-7424 FAX (619) 440-8914 Contact: Jeffrey C. Hamann Partners: Jeffrey C. Hamann -24.5% Gregg Hamann -24.5% Whammy Inc. -01.0% Eric Dye -00.5% James Graves -00.5% WFP A Ca. Limited Partnership -49.0% Date of Partnership: March 2, 1995 IRS returns are filed in Fresno, CA Tax I.D. #95-3145629 6. DESCRIPTION OF PRINCIPAL PRODUCTS AND/OR SERVICES: Aalto Scientific Ltd. manufactures raw materials and OEM products both biological and biochemical in nature for the diagnostic reagent industry. In addition, the company manufactures a broad line of proficiency survey specimens which are distributed by various American, European and Asian professional scientific societies for the purpose of monitoring quality assurance in clinical and medical laboratories. Aalto Scientific Ltd. is regulated by the U.S. Food and Drug Administration and registered as a contract manufacturer for In Vitro Diagnostics. Since 1979, Aalto Scientific Ltd. -has been producing the highest quality bulk human enzymes, proteins and private label control sera. Aalto Scientific Ltd.' s products are derived from human origin. The enzymes, iso-enzymes, and proteins have a variety of uses in the medical industry, including but not limited to the production of both monoclonal and polyclonal Antibodies, components in diagnostic reagent test kits, which are used to aid the physician in his diagnosis, and used in research projects by universities, industry and governmental institutions. Private label control serums are manufactured from human blood serum to which various enzymes, proteins, etc. are added or removed, and then man isolated in the manufacturing process to accurately reflect a variety of human conditions. These control serums are precisely filled and freeze dried in small glass vials to insure accuracy and stability. All clinical laboratories in the United States are required by law to use control sera to monitor the accuracy of their work. Aalto Scientific Ltd. is one of the largest (if not the Largest) supplier of private label cardiac iso-enzyme control serum in the world, .and is the preferred supplier to the College of American Pathologists. Aalto Scientific Ltd. has built its business with the ultimate commitment to satisfying each customer. For this reason it is easy to see why many of the leading diagnostic firms in the U.S., Europe, and Japan have chosen this small North San Diego County Company to be an integral part of their reagent systems. - -7. DESCRIPTION OF FIRMS PHYSICAL FACILITIES: Aalto Scientific Ltd. currently is headquartered in a seven year old concrete tilt-up, glass industrial/office building. The building is approximately 9500 s.f. in size and has served the needs of the company since its completion. The headquarters building is located at 1160 Joshua Way in the Vista, CA industrial area. The Headquarters building services office, manufacturing, R&D and warehousing functions for Aalto Scientific Ltd. The major customers are foreign and domestic In-vitro, diagnostic manufacturing companies including but not limited to: Abbott Laboratories, E. I. DuPont, Eastman Kodak, E. Merck, Boehringer Manwheim GMbH, Oriental Yeast Corporation, College of American Pathologies, and other Hi Tech firms. There are no other tax exempt financings currently outstanding. a. PURPOSE OF THE PROJECT: The construction of Aalto Scientific Ltd.' s new headquarters building at 1959 Kellogg Ave. will more than double the productive output of the fast expanding company. Company employment will increase from 17 to over 37. Total payroll will increase from $801,000.00 to over $1,740,000.000 all by the year 2000. Estimated useful life of the building is 25 years. The Borrowing Entity owns the site and the project is not located in a state-designated enterprise zone. Estimated Start Date: 2/15/95 Estimated Completion Date: 9/l/95 9. PROPOSED PROJECT DESCRIPTION: Located at 1959 Kellogg Ave., Carlsbad , CA., Aalto Scientific Ltd./s new headquarters building will be constructed in the Carlsbad Airport Center Business Park, located in the Carlsbad Airport industrial area. The site is a currently vacant finished industrial lot of 1.54 net acres, (See exhibit 1). The approximately 21,415 square foot single story building, with a mezzanine level will feature a butt-jointed glass system with recessed reflective glass bands and sand blasted wall panels accented with green architectural indent bands.(See exhibit 2) The new headquarters building will serve the office, manufacturing, R&D, and warehousing needs for the company for the next decade. There is no new equipment being purchased with the proposed bond financing. 10. PROJECT ELIGIBILITY: This project meets all the criteria and qualifications of Section 91503 of the California Industrial Development Financing Advisory Commission Project Application. . - - - 11. COSTS OF THE PROJECT To Be Paid From Bond Proceeds To Be Paid From All Other Sources Acquisition of Land $224,443.00 $ 39,608.OO Fees and other charges related to sale Site Preparation Construction of New Building(s) Utilities Connection Acquisition and Install- tion of New Equipment (a) Invoice (b) Installation (c) Other (please explain) Engineering/Architecture Legal, Permits, etc. Bond Issuance Expenses (including discount) Interest During Construction from 12/l/94 to 10/l/95) Total Bond Amount TOTAL $ 54,400.oo $ 9,159.oo $795,187.00 $ 1,700 none $ 9,600.OO $ 1,616.OO $140.,327.00 $ 300.00 $150,000.00 $ 30,932.oo $i37,783.00 $ 58,898.oo $ 24,480.OO $1,336,980.00 $ 5,459.oo none $ 10,394.oo $ 24,480.oo Total Other costs $ 381,783.OO COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,718,763.00 12. PUBLIC BENEFITS This project will lead to increased employment and payroll among our vendors, service providers and other related companies. Aalto Scientific Ltd. supports continuing eduction and training of employees. Aalto Scientific Ltd. will provide career growth opportunities to employees before looking outside Aalto Scientific Ltd.. There will be no impact on areas of severe unemployment. Number of Locations Currently one Upon Five Years Completion after of Project Comnletion one two Total Sales Volume 2.6 mil 3.2 mil 4.4 mil Number of Employees 17 27 37 Total Payroll $801,000. $1.27m $1.74m Total Employment 17 27 37* Management 5 9 13* Skilled 9 13 16* Unskilled 3 5 a* Total Payroll $801,000. $1.27m $1.74m The Carlsbad Airport Center where the new facility is to be located is a master planned development that addresses all community needs for infrastructure and facilities. Fees to the Community Facilities District of $65,024.00 as part of the permit fees will enhance the areas libraries, parks and other facilities. Civic facilities include the Veteran's Memorial Park and City Hall. Highway interchanges include Palomar Airport Road, La Costa Avenue and Poinsettia Lane. Road Segments include Cannon Road, Faraday Avenue and Leucadia Boulevard. *Aalto Scientific Ltd. has successfully isolated and purified a new cardiac enzyme. A test for this new enzyme will allow for the accurate diagnosis of a heart attack HOURS faster than current technology. A scientific paper will be presented in Europe later this year explaining the importance of this new enzyme. Aalto Scientific Ltd. is currently working with a leading cardiac researcher in the U.S. to develop and patent a diagnostic test for this enzyme. If successful, Aalto Scientific Ltd.'s annual sales volume could reach 50 to 100 million dollars within the next 5 to 7 years. At which point the company would employ in excess of two hundred skilled employees. The Carlsbad Airport Center Industrial Park where the new facility is to be located is a master planned development that addresses all community needs for infrastructure and facilities. Aalto Scientific Ltd. will double the production areas for increased volume of a new lines of products based on this technology. 13. PUBLIC DETRIMENTS There will not be any employment displacement or environmental impact. The infrastructure improvements are already in place. 14. RELOCATION Aalto Scientific Ltd. is doubling the size of the current facility thus necessitating construction of a new building only ten miles from its present site. Relocation is necessary in order to continue to grow. This specific site was selected due to economic advantage over other comparable site. Aalto Scientific Ltd. will retain all current employees and will double its 1993 employment by the year 2000. Because of the proximity of the new facility, there will be no worker displacement and a net increase of local employment. CALIFORNIA INDUSTRIAL DEVELOPMENT FINANCING ADVISORY COMMISSION PROJECT APPLICATION ASYMTEK 1. ISSUING AUTHORITY: INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF CARLSBAD, CA James Elliott, Financial Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 Ph: (619) 434-2948 FAX (619) 720-9461 2. PUBLIC JURISDICTION: 3. BOND PURCHASER: Cynthia Haas CITY OF CARLSBAD 2075 Los Palmas Drive Carlsbad, CA 92009-1576 Ph: (619) 438-1161 FAX (619) 438-0894 Arthur W. McAllister, Vice President FIRST INTERSTATE BANK 707 Wilshire Blvd., W16-20 Los Angeles, CA 90017 Ph: 213-614-3652 FAX 213-614-2569 4. APPLICANT (Facility User): Asymptotic Technologies 1949 Palomar Oaks Way Carlsbad, CA 92009-1307 Ph: (619) 431-1919 FAX: (619) 431-2678 Contact: Sherry L. Guevara Shareholders: Robert R. Ciardella 33-l/3% Alec Babiarz 33-l/3% Phil Maiorca 33-l/3% Phil Maiorca, Chairman, C.F.O. Alec Babiarz, Secretary Date & Place of Inc: CA 6/14/83 IRS returns are filed in Fresno, Ca. TAX I.D. #95-3847943 SIC #3681 DBA Asymtek - h (Borrowing Entity): CIP Limited, Ltd. 475 W. Bradley Avenue El Cajon, CA 92020 Ph: (619) 440-7424 FAX (619) 440-8914 Contact: Jeffrey C. Hamann Partners: Jeffrey C. Hamann 24.5% Gregg Hamann 24.5% Whammy Inc. 01.0% Eric Dye 00.5% James Graves 00.5% WFP A Ca. Limited Partnership 49.0% Date of Partnership: August 4, 1977 IRS returns are filed in Fresno, CA Tax I.D. #95-3145629 5. DESCRIPTION OF PRINCIPAL PRODUCTS AND/OR SERVICES: Asymtek designs and manufactures automated fluid dispensing system solutions. All systems are an integration of advanced electronics, mechanics, firmware, software and dispensing technology. The systems are flexible, portable and easily programmed by varying production requirements. Asymtek also manufactures a line of 3-axis motion control products used extensively in benchtop automation applications. The Automove 400 . DispenseMate 500, and DispensePro 600 fluid dispensing systems automate the dispensing process to provide increased throughput and accuracy. The Automove 400 is a computer- controlled system with true continuous path motion that delivers uniform continuous bead of fluid with an accuracy and repeatability of .OOl The patented DispenseMate 500 series automates and hand-held syringe dispenser with easy-to-use from panel programming for cost effective manufacturing. The DispensePro 600 system is an in-line conveyorized dispensing system for high-volume production requirements. The new DispenseJet technology, available on Fluidshooter systems, is the answer to many of the dispensing challenges in the surface mount industry. The DispenseJet technology achieves throughput rates of 20 dps (dots per second) or 72,000 dph (dots per hour) with a single dispensing head. DispenseJet technology also eliminates adhesive stringing, provides consistent dots, uses off-the- shelf adhesives, and eliminates the need for height compensation, thus addressing many of the causes of dispensing inconsistencies. Dispensejet technology sets new dispensing standards by providing closed-loop positive displacement dispensing and programmable adhesive dot size. Designed to meet the needs of the electronics assembly industry, the Asymtek SMA-GOOFS Fluidshooter system is a high speed surface mount adhesive (SMA) placement system for printed circuit board (PCB) production. Based on the proven technology of ink-jet printing, the .Fluidshooter system is highly reliable and robust. All warranty work is done at the Carlsbad location as well. 6. DESCRIPTION OF FIRMS PHYSICAL FACILITIES: Asymtek currently is headquartered in a seven year old concrete tilt-up, glass curtain wall industrial/office building. The building is approximately 18,000 s.f. in size and has served the needs of the company since its completion. The headquarters building is located at 1949 Palomar Oaks Way in the Carlsbad industrial area. The Headquarters building services office, manufacturing and warehousing functions for Asymtek. Asymtek also conducts off-site warehousing at 6359 Paseo De1 Lago in 3000 square feet of industrial space. In addition to the Carlsbad Headquarters Asymtek has sales regional offices in the Northeast in New Hartford, CT., and the Southeast in Austin, TX., and the Midwest in Schamberg, ILL., and a European Sales and Display and Demonstration Office in Bightonb, Alresford, Hampshire U. K.. The majorcustomers are Hewlett-Packard, IBM, Motorola and other Hi Tech firms. There are no other tax exempt financings currently outstanding. 7. PURPOSE OF THE PROJECT: The construction of Asymtek's new headquarters building at 2762 Loker Avenue West will more than double the productive output of the fast expanding company. Company employment will increase from 75 to over 130. Total payroll will increase from $2,900,000.00 to over $5,300,000.00 all by the year 2000. Estimated useful life of the building is 25 years. The Borrowing Entity owns the site and the project is not located in a state-designated enterprise zone. Estimated Start Date: 2/15/95 Estimated Completion Date: 9/l/95 0. PROPOSED PROJECT DESCRIPTION: Located at 2762 Loker Avenue West, Asymtek's new headquarters building will be constructed in the Carlsbad Oaks West Business Center located in the Carlsbad Airport industrial area. The site is a currently vacant finished industrial lot of 2.97 net acres, (See exhibit 1). The approximately 41,225 square foot single Story building will feature a butt-jointed glass system with recessed reflective glass bands and sand blasted wall panels accented with green architectural indent'bands.(See exhibit 2) The new headquarters building will serve the office, manufacturing and warehousing needs for the company for the next decade. The Borrowing Entity is the current owner of the site. There is no new equipment being purchased with the proposed bond financing. The Asymtek lease begins on October 1, 1995 and ends November 30, 2004. Paragraph 53 of the lease document details a Right To Cancel Provision by which the tenant has the right to cancel the lease after the eighty-sixth (86) month and continuing throughout the term of the lease with a six (6) month notice. The lease payment on a monthly basis is Twenty Three Thousand Nine Hundred Ten 50/100 dollars ($23,910.50). The lease rate is Fifty-Eight Cents ($.58) per square foot, net, net, net. The base rent will be adjusted annually by a at - fixed Three and One half (3.5%) increase. The tenant was given a tenant improvement allowance of Twelve dollars ($12) per square foot. 9. PROJECT ELIGIBILITY: This project meets all the criteria and qualifications of Section 91503 of the California Industrial Development Financing Advisory Commission Project Application. 10. COSTS OF THE PROJECT Acquisition of Land Fees and other charges related to sale Site Preparation Construction of New Building(s) Utilities Connection Acquisition and Install- tion of New Equipment (a) Invoice (b) Installation (c) Other (please explain) Engineering/Architecture Legal, Permits, etc.$ Bond Issuance Expenses (including discount) Interest During Construction (from 12/l/94 to 10/l/95) Total Bond Amount To Be Paid From Bond Proceeds $215.784.00 $ 83,648.OO $ 18,533.oo $1,204,612.00 $ 5,930.oo $240,350.00 $ 24,463.OO $227,579.00 $ 58,915.OO $ 75,199.oo $2,155,013.00 To Be Paid From All Other Sources $ 75,305.oo $ 29,192.oo $ 6,468.OO $420,387.00 $ 2,070.OO $178,650.00 $ 8,537.oo $ 79,421.oo $ 20,560.OO $ 22,559.oo Total Other costs $843,148.00 TOTAL COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,998,161.00 11. PUBLIC BENEFITS This project will lead to increased employment, sales and payroll among our vendors, service providers and other related companies. Asymtek sales will rise an anticipated One Hundred Percent (100%) within the first five years in the new facility. Asymtek supports continuing eduction.and training of employees. Asymtek will provide career growth opportunities to employees before looking outside Asymtek. There will be no impact on areas of severe unemployment. Number of Locations Total Sales Volume Number of Employees Total Payroll Total Employment Management Skilled Unskilled Total Payroll Currentlv Five 11 mil 75 $2.92m 75 8 47 20 $2.92m Upon Completion of Project Five 15 mil 88 $3.5m 88 10 54 24 $3.5m Five Years after Comnletion Six 21 mil 130 $5.33m 129 13 83 33 $5.33m The Carlsbad Airport Center where the new facility is to be located is a master planned development that addresses all community needs for infrastructure and facilities. Fees to the Community Facilities District of $110,000.00 as part of the permit fees will enhance the areas libraries, parks and other facilities. Civic facilities include the Veteran's Memorial Park and City Hall. Highway interchanges include Palomar Airport Road, La Costa Avenue and Poinsettia Lane. Road Segments include Cannon Road, Faraday Avenue and Leucadia Blvd. Asymtek officers are involved in the Carlsbad and North San Diego Community as panelists at the Malcolm Baldrige National Quality Award Conference. Also, by special invitation, Asymtek participated in the U. S. Department of Commerce (International Trade Administration) export conference. Asymtek is a proud sponsor of several local little league, soccer and baseball teams. Through memberships and contributions, Asymtek is also a supporter of the Carlsbad Chamber of Commerce, Toys for Tots Campaign, food and clothing drives for the needy and recycling. Asymtek was recently awarded a patent for the DispenseJet technology. The DispenseJet Technology was introduced at Nepcon West 1993. Officially described as 'Ia method for rapidly dispensing minute quantities of viscous materials I1 the technology potentially has many applications in several markets. Other benefits of the technology 23 include consistent dispensing, repeatable and accurate fluid volume and shape and non-contact dispensing. Asymtek will double the production areas for increased volume of a new lines of products based 'on this technology. 12. PUBLIC DETRIMENTS There will p& be any employment displacement or environmental impact. The infrastructure improvements are already in place. No relocation of company facilities outside Carlsbad is expected. 13. RELOCATION Asymtek is doubling the size of the current facility thus necessitating construction of a new building only two miles from its present site. Relocation is necessary in order to continue to grow. This specific site was selected due to economic advantage over other comparable site. Asymtek will retain all current employees and will double its 1993 employment by the year 2000. Because of the proximity of the new facility, there will be no worker displacement and a net increase of local employment.