The 'BBB' rating on Watsonville Redevelopment Agency, Calif.'s tax allocation bonds reflects: A limited, but growing, local economic base; A concentrated project area tax base; Strong debt service coverage by pledged revenues; and A good additional bonds test. The bonds are secured by incremental property tax revenues generated from Watsonville's merged redevelopment project area. 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, with a population of about 36,000, is a service and food-processing center, with below-average per capita income and very high unemployment. In 2000, while the median household effective buying income (EBI) of $40,944 was 92% of California and 104% of the
