Industrial Development Authority
City of Los Angeles
The Industrial Development Authority (IDA) of the City of Los Angeles is authorized under the California Industrial Development Financing Act (IDFA) to serve as a conduit issuer for the City’s private activity tax-exempt bond program. The IDA is administered by the City of Los Angeles Economic and Workforce Development Department and an appointed Board of Directors. All IDA bond issuances require the approval of the IDA Board, the Mayor and the City Council, and the Office of the State Treasurer.

Our Purpose


The IDA was established to promote economic development by facilitating growth through industrial development bonds for qualified businesses and nonprofit organizations. Encouraging businesses to locate or expand within LA City limits creates jobs and boosts the local economy.


IDBs and COBs Explained


Small issue Industrial Development Bonds (IDBs) are tax-exempt securities issued by state or local governments to help manufacturing operations finance real estate acquisition, construction, rehabilitation and equipping of new and expanding businesses. IDBs are a valuable tool to help improve underserved communities.

The use of IDBs is governed by both federal and state laws and regulations. Some benefits of an IDB may include low interest rates, long-term financing, comprehensive funding, and no prepayment penalties.

Certificates of Participation (COPs) are tax-exempt lease-financing agreements and are commonly found in municipal financing as an alternative to municipal bonds. COPs can be used for various projects, including real estate acquisition, development and refinancing.


Frequently Asked Questions


  • What are tax-exempt bonds?
    They are municipal, private activity, non-housing bonds consisting of industrial development bonds (IDBs), and certificates of participation (COPs) issued by the City for qualified projects from 501c(3) non-profit organizations within the City.
  • How are bond proceeds used?
    Bond proceeds are used to acquire and develop real property and equipment. Tax-exempt IDBs are available only for manufacturing operations. The COPs can be used for acquisition, development, and refinancing.
  • What is the eligibility criteria?
    Qualified projects must be backed by a 100% letter of credit or bond insurance from, or privately placed with, a publicly rated financial institution. The project should also create jobs and/or provide goods and services to low- to moderate-income City residents.
  • What are the funding limits, terms and collateral requirements?
    IDB issues range from $2 to $10 million; there is no limit for COPs. The maximum financing participation is 80% of total project costs or the appraised value of the underlying property. The bond term usually ranges from 5 to 20 years and amortizes over 30 years. The collateral typically consists of real estate assets and/or equipment.


    Type of Bonds Funding Limits Eligibility
    Industrial Development $2 - $10 million Manufacturers Only
    Non-Profit 501c(3) $2 million - Unlimited 501c(3) Organizations

Contact


The IDA was established to promote economic development by facilitating growth through industrial development bonds for qualified businesses and nonprofit organizations. Encouraging businesses to locate or expand within LA City limits creates jobs and boosts the local economy.


Resources

California Infrastructure and Economic Development Bank - an overview of Industrial Development Bonds
www.ibank.ca.gov/bonds/industrial-development-bonds

U.S. Government Accountability Office: Industrial Development Bond Information (1992)
www.gao.gov/products/rced-92-247r

CA Public Finance Authority on IDBs
www.calpfa.org/private-activity-programs/industrial-development-bonds-idbs-manufacturing



This page does not constitute a comprehensive prospectus nor is it illustrative of all aspects of the IDA bond program. The City of Los Angeles and IDA make no representation as to the accuracy and completeness of this page. The opinions and estimates represented on this page constitute an indicative perspective as of August 2014, and is subject to change at any time without prior notice. Users should consult their financial advisors for their qualification and eligibility under the program. This material may not be quoted, reproduced nor used as sales material without the prior written permission of the City and the IDA.