Santa Cruz County Bank In The News
Congressman, USDA See Impact of Federal Loan Program
March 8, 2011
By Jennifer Squires - Watsonville Patch
Congressman Sam Farr (D-Carmel) and Judith Canales, U.S. Department of Agriculture's rural development administrator, visited Watsonville Coast Produce Monday to see the results of a federal loan program.
The longtime Watsonville company received a $4.6 million business and industry guaranteed loan from Santa Cruz County Bank last year, thanks to the backing of USDA Rural Development's business and investment program. The loan helped the produce-distribution company save jobs and complete the construction of a new state-of-the-art plant on Kearney Street.
"It was really a lifesaver for us," said Gary Manfre, who owns Watsonville Coast Produce with Doug Petersen and John Burkett.
Last year was a banner year for the Rural Development's Business and Industry Guaranteed Loan program. About $100 million in funding was distributed in California alone, according to Canales.
"Our mission is to invest in rural business," Canales said. " ... This is an excellent example of the types of businesses we like to see."
Watsonville Coast Produce started as a family business in 1937. Today, it does $30 million in annual sales and employs about 85 people.
The company's new 44,000-square-foot building can store 700 pallets of fresh produce—both conventionally and organically grown— juice and eggs. Every day $75,000-$80,000 in food is shipped from the nine loading docks.
This time of year, the climate-controlled coolers are packed with ripening bananas, bags of potatoes, grapes, avocados, even California strawberries, but the produce isn't Watsonville-produced. However, as the seasons change, the cold storage facilities will be packed with locally grown greens, strawberries and other produce. About 85 crops are grown in the Pajaro and Salinas valleys and many pass through Watsonville Coast Produce on their way to market, Farr said.
"It's huge, it's just huge," Farr said, calling the region "the Silicon Valley, the Fort Knox" of agriculture.
"There's nothing better than what's grown here," he added.
Two years ago, while transitioning from three buildings on Lee Road to the Kearney Street property, the company tried to restructure its loan but was turned down by a big bank, Manfre said.
The federal loan-backing program helped save the company's finances. Essentially, it enhanced the company's credit rating without any penalties. Then Watsonville Coast Produce just had to shop for a bank to take on the debt.
Santa Cruz County Bank stepped up first.
Canales said the majority of these USDA-backed loans are handled by community banks, not large chains. In this instance, Watsonville Coast Produce got a 25-year loan with a favorable interest rate, and, in return, Santa Cruz County Bank got all of the company's banking business.
"We jumped on it," said Sue Chandler, senior vice president at the bank. "We want to work with people in our community."
The federal loan guarantee program dates back more than 30 years and is the flagship program of USDA's Rural Development arm, according to Canales. Two decades ago, other Watsonville businesses used similar loans to rebuild following the 1989 Loma Prieta earthquake.