Santa Ana Approves Bonds to Avoid Expected Controls

Seeking to protect Santa Ana’s ability to issue tax-exempt bonds for construction projects, the City Council on Monday voted unanimously to authorize issuance of mortgage and industrial development bonds for 26 projects.

The move was prompted by the expected introduction in Congress today of a bill aimed at limiting the ability of cities to issue tax-exempt bonds. Santa Ana and several other California cities learned last week that Rep. J. J. Pickle (D-Texas) planned to introduce the legislation with an effective date of Jan. 22, if it is approved and signed into law by President Reagan.

Other cities that acted to beat the deadline include Huntington Beach--which had 19 bond resolutions on its council agenda Monday night, Los Angeles and San Francisco, officials said.

The bond financing authorized in Santa Ana totals $273.35 million, the bulk of it in industrial development bonds. The biggest single item was a $90-million authorization for the construction of a sports arena on the site now occupied by Santa Ana Stadium.

Hank Cunningham, executive director of the city’s Economic Development Corp., said the arena and several other projects are in “very preliminary stages” and may never come to fruition. However, he added, if the sports complex is eventually deemed feasible, the tax-free bond incentive for investors will provide a major thrust toward realization.

Other projects include two hotels, several shopping centers and the rehabilitation and expansion of a number of buildings.

Rep. Pickle has long been an opponent of tax-exempt bonds, and the expected legislation may be in response to abuses of the funding arrangements, particularly in Southern states, Cunningham said. One case involved using the funding mechanism to purchase airplanes for doctors, he said.