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Bonds Provide Dough for Bakers to Expand Operations

Santa Ana, California, EZ

The scent of baking bread and cookies permeates the air in portion of Santa Ana, California, designated as a Federal EZ. Sourdough bread and animal crackers are the primary products of the first two businesses here to take advantage of EZ facility bonds.

Since January 1999, when HUD assigned EZ status to this 3.9 square-mile area, the city of Santa Ana has been able to issue up to $130 million in tax-exempt, EZ facility bonds to qualified businesses. These businesses must substantially conduct their operations within the EZ and focus on hiring residents within the EZ's boundaries. The EZ designation, coupled with local economic expansion and an increased workforce, led Gold Coast Bakery and Stauffer Biscuit Company to solicit financing to expand their production capabilities.

Gold Coast Baking Company, which specializes in sourdough bread, has effectively used State and Federal EZ hiring and sales tax incentives to acquire new equipment, increase its labor force, and spearhead an eightfold expansion of its facilities. With $5 million from EZ facility bonds, Gold Coast enlarged its 2.48-acre plant and purchased new bread manufacturing lines. The company also has received $33,000 annually in Federal tax credits because 11 of its employees reside within the EZ. When it relocated to Santa Ana in 1993, Gold Coast had 25 employees. Today it has 145 workers.

Stauffer Biscuit Company, Inc., a 130-year-old Pennsylvania-based baking company famous for its "Original Animal Crackers" and other baked goods, chose Santa Ana as the site of its new West Coast facility, the Laguna Cookie Company. This food processing company constructed a 217,000-square-foot state-of-the-art facility in the Gateway Corporate Center and began operations in June 2001.

Located in both the Federal and State EZs, the company used $12 million in bond proceeds to finance the construction of its new building and the acquisition and installation of new equipment. Santa Ana's diverse labor pool contributed to Stauffer's decision to establish itself within the EZ. "The work ethic of the people we've encountered is superb," said Carlos Sutton, the firm's chief financial officer.

For more information on the programs of the Santa Ana EZ, call EZ Director Deborah Sanchez at (714) 647-6548.