State’s bank helps finance Central Valley business expansion

STOCKTON
September 30, 2009 7:44am

The California Infrastructure and Economic Development Bank says it is issuing $2.5 million in industrial development bonds to help finance a nut processing facility in Stockton.

Kennfoods USA LLC, a tree nut processing company, will use the money to set up a plant in a small business park in the South Stockton Enterprise Zone, according to the bank, which refers to itself as I-Bank.

“I-Bank bonds combined with the California Enterprise Zone Program provide localities with the opportunity to revitalize their most impoverished areas," says I-Bank Executive Director Stan Hazelroth.

The bank’s IDB program provides tax-exempt financing up to $10 million for qualified manufacturing and processing companies for the construction or acquisition of facilities and equipment. IDBs allow private companies to borrow at low interest rates normally reserved for state and local governmental entities.

Kennfoods began operations in San Leandro in 2006, initially focusing on processing imported macadamia and cashew nuts. The company soon began processing more domestic and local nuts such as almonds, pecans and walnuts, and outgrew its facility, I-Bank says.

Unable to find a suitable facility to house its expanded production in San Leandro, Kennfoods located a building in Stockton that meets its space needs and is closer to local nut growers. Bond proceeds will be used for the purchase and rehabilitation of land and two adjacent buildings.

The I-Bank describes itself as the state’s only general purpose financing authority and has broad statutory powers to issue revenue bonds, make loans, and provide credit enhancements for a public infrastructure and economic development projects throughout California and for other governmental purposes.