The rating on Watsonville Redevelopment Agency, Calif.'s bonds reflects a limited local economic base, a concentrated project area tax base, strong coverage of maximum annual debt service (MADS) from tax increment revenues, and a strong additional bonds test. The project area covers 569 acres in downtown Watsonville, which is six miles inland from Monterey Bay and 14 miles south of Santa Cruz. Watsonville (population 36,000) is a service and food processing center, with below-average income levels and very high unemployment (the annual unemployment rate has averaged 20%). Agribusiness is the dominant industry in Watsonville and intense international competition has changed the industry over the past five years. Food processors are the major taxpayers in the project area and, despite changes
