Press Release | City of San Diego

City Helps Retain Local High-Tech Manufacturing Firm
Assistance with Tax-Exempt, $4.6 Million Industrial Development Bond Saves Money,

SAN DIEGO – In an effort to save San Diego jobs and retain a local high-manufacturing company, the City of San Diego assisted Multiple Peptide Systems with an Industrial Development Bond (IDB) valued at nearly $4.6 million. Low-cost, tax-exempt IDBs are designed to help promote job creation and are part of a comprehensive program of business assistance provided by the City’s Community and Economic Development Department.

Multiple Peptide Systems is financing tenant improvements to its San Diego specialty chemical manufacturing facility, where it produces research-grade and pharmaceutical-grade synthetic peptides. Such synthetic peptides are a basic raw material input critical to the biotech and health sciences industry, one of San Diego’s major high-tech industry clusters.

The IDB played a major role in Multiple Peptide Systems’ decision to stay in San Diego. “The final selling point was the opportunity of being able to finance a portion of our capital expansion project with tax-exempt private activity bond financing,” said Jeanick Pacal, chief executive officer of Multiple Peptide Systems. “The City of San Diego was instrumental in the approval process of this financing project. Their committed assistance with processing our applications, inspections and permits made a huge difference in meeting not only our deadlines, but the ultimate completion of our project.”

Since IDBs are tax-exempt municipal bonds, interest rates are substantially lower than commercial financing rates. The bonds also allow long-term amortization periods up to 30 years (depending on the useful life of the assets financed), so a growing company will devote less cash flow to service loan principal repayment.

“Economic Development staff can expedite the permit process and facilitate government approval concurrently with the bank credit underwriting and business deal negotiation process,” said Hank Cunningham, director of the Community and Economic Development Department. “Combined, these incentives can save a company hundreds of thousands of dollars.”

San Diego’s “hourglass economy,” with highly degreed technicians, management and professional service providers at the top, retail and other service workers at the bottom, makes the preservation of its manufacturing job base-particularly in targeted industry clusters-a high priority. The 40 jobs Multiple Peptide Systems is retaining, as well as those it projects to create, are high quality jobs that provide high pay and full benefits to high-tech workers who may not possess advanced technical degrees.

Councilmember Brian Maienschien was pleased with the closing of the transaction. “This bond issue will help maximize Multiple Peptide Systems’ production capacity, contributing significantly to San Diego’s biotech industry. The indirect job creation potential within this industry cluster will help ensure that San Diego retains its competitive advantage over other regions in the nation and world.”

For more information on Industrial Development Bonds, visit the City’s web site at www.sandiego.gov or call Mark Sullivan, business finance manager, at (619) 533-7502.

With an emphasis on the City’s urban core neighborhoods and low and moderate income residents, the Community and Economic Development Department strives to improve the quality of life and ensure a healthy economy in San Diego through job development, business development, neighborhood revitalization, public improvements, redevelopment, social services, and revenue enhancement.

Community & Economic Development