Representatives of the newly anointed Gilroy Gardens are asking
the city to purchase 516 acres of wooded foothills where the
nonprofit group now operates a theme park.
Gilroy – Representatives of the newly anointed Gilroy Gardens are asking the city to purchase 516 acres of wooded foothills where the nonprofit group now operates a theme park.
The deal, which will be presented to City Council in a closed session Wednesday night, could permanently remove the risk of creditors foreclosing on the park’s west Gilroy land and carving it up for future development. It could also mean that a new arts center, neighborhood parks and other major projects get bumped down the city’s priority list.
“We’re going to have to put some things off for a few years, but it’s something I believe is so important that a little sacrifice now is well worth what we’ll get in the future,” said City Councilman Dion Bracco, an appointee to the park’s board of directors. “I think it’s an option that would give the city full ownership of the park. This thing would be equivalent to Golden Gate Park in San Francisco or Central Park in New York. It will be preserved forever for the city of Gilroy, for our citizens. That’s some of the most beautiful land in the city.”
Bracco will pitch the deal to fellow council members Wednesday. Any purchase would require the city to “retire” – or pay off all or part of the park’s remaining $13 million in debt to bondholders, said Joel Goldsmith, another park board member.
“Right now any uses of the park, any sale of land, any development of land can be done according to zoning on that property,” Goldsmith said. “If the city controls the park, then they’re going to be the ones controlling those decisions as to what goes on out there.”
The idea of selling the park to the city was discussed as far back as five years ago, Goldsmith said, when park founder and grocery store magnate Michael Bonfante approached City Hall with a controversial land deal. The arrangement, which involved selling 33 acres of the park’s land for development as part of the adjacent Eagle Ridge golf community, helped the park reduce its debt from $70 million. As part of the deal, Bonfante agreed to set up a “community benefit” nonprofit group with the city named as ultimate beneficiary. In other words, if the park were to generate profits, the city would receive a share of those funds for educational purposes. If the park was carved up by creditors, the city would receive any leftover proceeds from the sale.
“The bottom line is, from both directions – from a positive direction and from a negative direction – there is a financial link to the city,” said Bob Kraemer, president of the park’s board of directors. “There is no obligation of the city to us.”
It remains unclear, however, if the city would have to cover any losses if the park failed to turn a profit. In that last two years, park officials have succeeded in boosting revenues by adding attractions and seasonal events. The latest change came last month, when park officials announced a name change from the original Bonfante Gardens to Gilroy Gardens. Officials hope the change will enable the park to cash in on Gilroy’s fame as the Garlic Capital.
Bracco and Goldsmith said the name change was not made in anticipation of the sales pitch to Gilroy. The idea of selling the park to Gilroy resurfaced earlier this year, shortly after Bracco joined the board, the councilman said. Neither he nor Goldsmith could remember who proposed the idea, but Bracco said it came up during a “round-table discussion.” Bracco brought the idea to City Administrator Jay Baksa several weeks ago, he said, to see how the purchase would fit into the city’s overall budget picture.
The city currently has more than $100 million in what are called “unfunded liabilities,” including cracked sidewalks, uprooted storm drains and unpaved or dilapidated alleys, to mention a few. At the same time, officials have budgeted for a $10 million arts center and are scrambling to find funds for a new $20 million public library.
Given the list of priorities, Councilman Craig Gartman said he would be “very hesitant” about purchasing Gilroy Gardens.
“Where’s the best place for us to be investing the money that we have?” he said. “The people in our neighborhoods need to come first. If the private sector, who are professionals at running parks, cannot turn a profit, I doubt very seriously that a government entity can make that happen. I know that Michael Bonfante had a beautiful dream, but we don’t want it to turn into the city’s nightmare.”
Gartman also questioned whether council can legally discuss the Gilroy Garden’s proposal in closed session.
“We aren’t in any negotiations,” he said. “It sounds like a policy issue. … if we made a decision that we’re going to buy something, then we can talk about it in closed session. But this sounds like we’re going to discuss whether we want to do this at all or not.”
State open meeting laws allow elected bodies to hold a closed session with its negotiator “prior to the purchase, sale, exchange, or lease of real property by or for the local agency, to grant authority to its negotiator regarding the price and terms of payment for the purchase sale, exchange, or lease.”
Tom Newton, general counsel for the California Newspaper Publishers Association, said “the law allows a closed session for a body to instruct its negotiator on two narrow issues: price and terms of payment.”
He added that a court has found a city council to be in violation of open meeting laws when officials were briefed on land acquisition matters, work of architects, infrastructure and parking development, among other broader topics.
City attorney Andy Faber declined to comment on whether or not the meeting should be held in closed session. Gartman, who received a call from Faber, said the attorney told him that his office feels a closed session is appropriate. Gartman said he plans to walk out of the meeting if policy is discussed behind closed doors.
Mayor Al Pinheiro also declined to share his opinion about a possible city purchase of Gilroy Gardens.
“As soon as the whole council gets briefed, then together we can start forming an opinion on what it all means,” Pinheiro said. “That will set the stage for whether we want to pursue anything or say “Thank you for the information,’ and walk away.”
