Bond Helps Engineering Firm Buy Land and Grow
Over the past several years officials of Vortech Engineering have been eyeing possible sites for relocation and expansion. The product line and staff of the 7-year-old Moorpark company have been growing so steadily that the headquarters are virtually bursting at the seams.
“We now can’t add people or machinery, and that can have a dampening effect on our ability to grow,” said Chris Cowles, marketing director for Vortech, which manufactures superchargers for the automobile industry. “We started to explore how we could pull off [the purchase] of land and building.”
The solution to the company’s financial concerns has arrived in the form of a $3-million industrial development bond awarded by the California Economic Development Financing Authority.
Vortech, which has a staff of about 50, will use the low-interest loan to purchase a 4-acre parcel for a facility at the Channel Islands Business Park in Oxnard. The bond is to be repaid over 25 years at a rate of about 6%.
Although the award is granted by the state, it is supported by a letter of credit from California United Bank of Camarillo. This year the state has awarded $160 million in industrial development bonds, backed by various community banks, each representing the individual recipients.
“This will allow us to quadruple the size of our business, it gives us more manufacturing capabilities, we will be able to expand our testing facilities and it will allow more office space,” Cowles said. “As we move forward to the years ahead, a lot of things are on the books.”
Cowles said Vortech officials plan to enter new markets and expand the company’s presence in existing markets, introduce new products and handle more manufacturing in-house, all of which will create more jobs.
“We are really talking about across-the-board opportunities to add staff to meet our sales and production goals,” Cowles said. “I’m not saying we’ll double our staff but we could easily see 30 to 40% growth in staffing in a multiyear period.”
Vortech’s plans are typical of recipients of the federal industrial development bonds, which were established in 1986 to encourage domestic manufacturing.
“This is not a financial resource for start-up companies, it is for established companies that are looking to go to the next step,” said Daniel Bronfman, principal at Growth Capital Associates of Santa Monica, which assisted Vortech with the application process.
“In the case of Vortech, they will go from a modest-sized building to a substantial building,” he said. “The low-interest rate is designed to make that jump easier.”
Cowles said the company could move into a new facility within 18 months.
“When we originally began our search we were intent on staying in the city of Moorpark, but when we looked at what limited land was available and the size of the land, in the long run it wasn’t going to work out,” Cowles said. “This building will give us a window of seven to 10 years.”
