30 acres of Bonfante Gardens land on the market in hopes of
adding to park’s reserve fund
Gilroy – Just a few months after staving off bankruptcy and reducing its debt load by millions of dollars, Bonfante Gardens, the city’s nonprofit horticultural park, is looking to pad its reserve fund by selling off 30 acres of land.
Bob Kraemer, president of the park’s board of directors, declined to give the asking price for the property surrounding the park’s entrance off Hecker Pass Highway. The land includes five acres north of Hecker Pass as well as land to the east and west of the park’s entrance on the south side of the road.
Kraemer said the land was listed for sale in August, but that officials are in no rush to sell.
“‘Up for sale’ is maybe too strong a wording,” he said. “It has been listed with a commercial Realtor at a price that if we achieve that price we would look very seriously at it.”
A property agent reached after business hours could not provide the exact listing price by press time.
Kraemer said that proceeds from the sale will help boost the park’s reserve fund, which has dwindled as officials dip into the funds to keep creditors at bay.
At the beginning of the month, the park sent out $831,000 in checks to bondholders as one of two two annual debt payments. That figure is less than half the amount the park paid under its prior debt load of $70 million, according to Kraemer.
Over the summer, the park reduced its financial obligations to less than $13 million by completing the sale of 33 acres of residentially-zoned land to Shapell Industries. The sale of that land, which will serve as a northern adjunct to the Eagle Ridge housing community, was part of a bail-out package city officials approved to help keep the park out of bankruptcy.
The 30 acres now up for sale is zoned for commercial use, though any specific proposals would have to receive the council’s blessings.
Mayor Al Pinheiro said that any proposal for the Bonfante land would receive the same consideration as other development.
“Any project that comes before us would have to be weighed on its merits,” he said. “There’s no reason at this point why (Bonfante) would be given any special treatment.”
Any land sale would also have to be approved by investors who hold the park’s remaining debt.
Chris Lippman, an investor who represents about $1.5 million in park debt, welcomed plans to sell off more of the park’s land.
“It’s a win for the park and a win for the community of Gilroy,” he said.
Ken Dekker, another bondholder representative, also leaned in favor of a land sale but said he would scrutinize the proposed use of the proceeds before signing off.
“We’re not just going to let them go in there and do things willy-nilly,” Dekker said. “We’re going to have to see how they want to spend the money.”
Dekker and Lippman are among the more fortunate holders of the park’s debt. Other investors who bought bonds that were not backed by the park’s land or other assets received only pennies on the dollar as part of the debt restructuring this summer.
Asked if investors who ultimately lost millions of dollars had demanded the sale of the 30 acres earlier, Kraemer replied: “No one can make a demand on us to sell this land. At this stage, we are in good standing with the bondholders.”