California Boosts Its Bond Program

The California Enterprise Development Authority (CEDA) has praised the State Treasurer’s office for increasing the funding allocation from approximately $120 million to $150 million for the 2009 Industrial Development Bond (IDB) program. This annual IDB issuing volume, which funds projects for California manufacturers, is established by the State Treasurer and represents a $30-million, or a 25%, increase, over the IDB limit set in January 2008.

Through the program’s small-issue IDBs, CEDA can access the increased funding limit of $150 million to finance projects statewide to support expansions of existing manufacturers as well as create much needed jobs in today’s economy. Manufacturers can use these tax-exempt, private-activity bonds, which are issued through state and local governmental agencies like CEDA, to assist in purchasing facilities and financing capital expenditures.

Wayne Schell, president of the California Association for Local Economic Development and Chairman of the CEDA Board of Directors, praised the Treasurer’s Office for “gearing up to help small- to mid-sized manufacturers in California in a difficult lending environment. This shows the state is working proactively to continue its support of California manufacturers, despite the current economy. The IDB program is an excellent economic development financing tool.”

Manufacturers interested in tapping these funds must be credit worthy and meet other state and federal requirements. However, according to Dan Bronfman, president of Growth Capital Associates, Inc., “In most cases, the approval process is worth the effort when you realize how much a business owner can save with an IDB versus a conventional loan. Since this program is aimed at helping mid-sized manufacturers, it supports a critical segment of California businesses.”

Wind Farms Whistle Across North America

Valero Energy Corporation, one of the largest oil and gas refiners in North America, has begun
its Phase I operation of a 50-megawatt (MW) windfarm located in McKee, TX. Just north of Amarillo, the McKee Windfarm will be constructed in two phases.

Initiated in December 2008, energy production from six General Electric (GE) 1.5-MW wind turbines of Phase I has been commissioned for startup. Phase II will consist of 27 GE 1.5-MW wind turbines expected to be erected and ready before the end of June 2009.

Though Texas has the largest installed capacity of wind power in the United States, Iowa also is a recognized leader in the development of wind-generated electricity. By successfully attracting such top turbine manufacturers as Siemens, Clipper and TPI Composites, Iowa has established itself as the major wind-turbine manufacturing hub in North America.

Acciona, a Spanish turbine manufacturer with operations in Iowa, awaits environmental approval for a 103.5-MW windfarm to be built in the Coquimbo region of Chile. And while Acciona lies in wait, construction has already been completed on two other windfarms in North America.

Central Plains Power LLC is in the commissioning stages of the Central Plains windfarm project, which broke ground in June 2008. Located in Marienthal, Kansas, the project consists of a 99-megawatt farm developed by RES and owned and operated by Westar.

Also, Cartier Wind Energy LLC has begun full commercial operation of the $110 million, 110-MW Carleton Windfarm in Québec, Canada. Comprised of 73 wind turbines, the farm should generate 340,000 MW per hour of energy per year.

"Gray Lady" Battles Red Ink

With its stock price plunging more than 60 percent in the past year, its print advertising sales collapsing, and a reported $1 billion in debt, The New York Times Co. is urgently trying to raise $225 million by offering a sale-leaseback deal on its new 52-story headquarters building in midtown Manhattan.

The move to sell a portion of its gleaming new skyscraper, designed by architect Renzo Piano, is the latest in a series of cost-cutting steps by the newspaper giant, according to Crain's New York Business.

Previously, The New York Times Co. has slashed its dividend for investors by 75 percent, cut companywide staff by 8 percent, and raised its newsstand price while merging sections of the newspaper, Crain’s reports.

However, the publishing conglomerate still is grappling with a 92-percent plunge in net income in the first nine months of 2008, and is in the midst of negotiations with lenders regarding more than $600 million in loans that are coming due this year and next. The Times parent company also is trying to sell its stake in the Boston Red Sox baseball franchise.

Industry analysts expect the Times to survive any consolidation of the newspaper business during the current global recession, but some real estate specialists believe the company may have waited too long to try to sell off a piece of its headquarters building.

While the current credit squeeze generally makes leaseback deals an attractive option, the overall unavailability of financing limits the number of potential players, analysts told Bloomberg News.

IBM Eyes Iowa

Iowa recently announced that IBM will open a new technology service delivery center in Dubuque, IA. It is expected that the $100-million project will create up to 1,300 high-quality jobs.

IBM has signed a 10-year lease, with optional extension years, to occupy a historic building in downtown Dubuque. The City of Dubuque, Dubuque Initiatives and IBM plan to upgrade the facility to make it a “green” building. The renovation of the building will utilize industry-leading energy-efficient technology.

“We selected the City of Dubuque for our new delivery center based on several criteria, including the strong positive public-private partnership within the city, its competitive business model and the talent and skills that Iowa and the Midwest have to offer,” says Mike Daniels, senior vice president, IBM Global Technology Services.

The IBM announcement follows the addition of Microsoft building a large server farm in West Des Moines and Google's $600-million data center in Council Bluffs; both centers are slated to be completed in the spring of 2009.

IBM intends to employ several hundred people in the new facility by the end of this year and up to 1,300 by the end of 2010. IBM will work with institutions of higher learning in the tri-state area of Iowa, Illinois and Wisconsin for recruitment and training of potential employees.

The technical service delivery center in Dubuque will primarily support IBM’s U.S. strategic outsourcing clients, providing server systems operations, security services and end-user services, including maintenance and monitoring of computer hardware and software systems. Employees will manage IBM’s world-class servers and storage systems that are critical for assuring optimal IT infrastructure performance. IBM’s global delivery network incorporates more than 80 strategic centers around the world and serves thousands of clients.

IDA Loans Create Jobs in PA

The Pennsylvania Industrial Development Authority has approved two low-interest loans totaling $1.36 million to fund Philadelphia-area projects, the Pennsylvania Department of Community and Economic Development said Wednesday.

The PIDC Financing Corp. will receive a $680,000 loan to acquire and renovate an existing facility on East Hunting Park Avenue in Philadelphia. The site contains eight buildings totaling 45,000 square feet and has three tenants: Beletz Brothers Glass Co. Inc., a glass and metal fabricator; R&M Supply Co., an industrial-welding company; and Tasty Way Inc., an industrial bakery. The tenants are expected to create 25 jobs at the facility.

Sealstrip Corp., which makes easy-opening and resealable consumer packaging, will get a $680,000 loan to acquire and renovate the building it leases in Gilbertsville, Montgomery County, Pa. The company’s $1.7-million project, sponsored by the Montgomery County Industrial Development Corp., will create 16 jobs and retain 39 existing ones.

Kuwait kills $17.4 billion K-Dow deal

Kuwait's government decided on December 28 to cancel a $17.4 billion joint venture with U.S. petrochemical giant Dow Chemical. The venture, known as K-Dow, was announced with great fanfare in July as the crown jewel of economic development initiatives in Michigan.

Michigan, already home to Dow Chemical's headquarters in Midland, had been slated to become the home as well to the new K-Dow Petrochemicals, a partnership between Dow and Kuwait's Petrochemical Industries Company (PIC), a subsidiary of Kuwait Petroleum Corp.

According to the Associated Press, the venture became a political football in oil-rich Kuwait after the dual collapse of the global financial system and the price of oil during the fall. In a statement carried by the state-owned Kuwait News Agency (KUNA), the Kuwaiti government said the K-Dow venture was ''very risky'' in the wake of the financial meltdown and cratering oil prices.

The K-Dow contract was canceled just a few days before a planned Jan. 1 startup date by the Supreme Petroleum Council, Kuwait's highest oil authority, according to the statement from KUNA.

The project, in which Kuwait was to hold a $7.5 billion stake, reportedly had been criticized in Kuwait as ''a ''waste of public funds'' and Kuwaiti lawmakers threatened to question the prime minister in parliament if it was launched. Such a move could have led to Sheik Nasser Al Mohammed Al Sabah's impeachment, sparking a new political row in the country just weeks after the Cabinet resigned in protest after an effort by a group of Islamist lawmakers to question the premier over corruption allegations within the government, AP reported. Sheik Nasser was reappointed to his post though he has yet to form a new Cabinet.

Kuwaiti Oil Minister Mohammed al-Eleim defended the venture as profitable, saying it was carefully studied by international consultants for over two years. But Kuwait's Cabinet said in its Sunday statement that it ''rejected'' politicizing the issue.

The venture between chemical giant Dow and PIC was designed to enable the partners to snare the lion’s 'hare of the global chemicals market. The new company was to be headquartered in the Detroit area.

Crude oil prices have plunged from mid-July highs of nearly $150 per barrel to a current level of under $40. The Kuwaiti stock exchange also has fallen by about 35 percent since the beginning of 2008. Dow announced in early December that it was cutting about 11 percent of its work force, closing 20 plants and selling off several businesses to cut costs amid the financial downturn.