It’s just like a big earthquake. We all know one is coming, but
we don’t know when, and nothing can be done about it until it
happens.
It’s just like a big earthquake. We all know one is coming, but we don’t know when, and nothing can be done about it until it happens.
It has happened, and it has hit the unreinforced masonry building that is Bonfante Gardens, which has collapsed. I am saddened no federal disaster relief is available, as in an ordinary earthquake, because the City of Gilroy now has a gigantic mess on its hands.
Let’s look at why. Although almost everyone in this town hoped and prayed that the unique park would survive, most of us understood that it would not. From the ominous early closing the first year and subsequent financial troubles for years, it became increasingly apparent that the concept has no commercial legs.
Even with outside management, the park failed financially. While the city has several small “enterprises” (sewer and water and the golf course, which is contracted out) the source of the funds alone will cause our city staff and councilmembers to clean out the antacid section of the local drugstores.
Where the city would find funds to retire the bonds is a fascinating question. Could, for instance, our parks and recreation impact fees, or other impact fee funds, possibly be used? General obligation bonds seem unlikely, as the city has pleaded poverty on bonding out sidewalk repairs because repayment would have to come from the continually-short General Fund. Under these circumstances, continuing operation and risking a loss operating the park is not sound fiscal management on any level.
It will take $13 million to retire the bonds and obtain title. That represents a gigantic sucking financial black hole for funds that should be used for things which will benefit us all. I’m talking about sidewalk repair, the proposed art center, a new library and the list goes on practically forever. Moreover, these things have been promised, and in some cases, funds have been expended to implement them. Why should the city put everything else on hold for this?
One reasonable answer might be, because they have to. Bob Kraemer, president of the Bonfante/Gilroy Gardens Board of Directors said, “The bottom line is, from both directions – from a positive direction and from a negative direction – there is a financial link to the city. There is no obligation of the city to us.”
I’m sure the thought never crossed Bob’s mind that essentially what he was saying to the city was “We’ve got a gun to the city’s head,” but that’s what I heard, especially when Joel Goldsmith also said, “Right now any uses of the park, any sale of land, any development of land can be done according to zoning on that property. If the city controls the park, then they’re going to be the ones controlling those decisions as to what goes on out there.”
I know the Board has struggled for years with debt, and I should point out that the Board is composed of volunteers who are trying to do a terribly difficult job without compensation. But the remarks above point out the dilemma in which the city finds itself. The ongoing financial problems have essentially made the two entities adversaries.
Sadly, the city owning the park might well be the least ugly solution to an ugly set of problems. Much of the land is zoned commercial. If the bondholders wind up with the property, commercial enterprises can and will crop up. The City Council has limited authority to deny such enterprises, because if the proposed various enterprises meet the criteria for commercially-zoned property, an arbitrary denial is legally dubious. Yes, it’s an environmentally sensitive, beautiful area, but the city zoned it and the city will have to live with that zoning if the land falls into the hands of others.
So, what’s to be done? The first thing is, don’t rush. The bond payments are due in May and November. The number one question that needs answering is whether or not the spring bond payment is available. If it’s not, time is short. After writing down the park’s debt 80 percent, I’m sure the bondholders are not in any mood to be merciful if the funds are not going to be paid on time.
A city owning land within it’s own borders is not a bad idea. I’ve heard several ideas over the weekend that could make sense. Perhaps the city is not the only viable purchaser willing to step up. Also, maybe some other options will surface if the May payment can be made. Some breathing room would be nice.
However, if the city does acquire the park, it should be closed forthwith. The enterprise never has been financially viable, and it’s not fair to the residents of our town, who have other needs, to have the funds for those needs bled out by the park.
