The group of Asian investors who offered to buy Gilroy Gardens
have suspended their proposal until the city council and residents
figure out exactly what they want to see along the city’s western
corridor.
The group of Asian investors who offered to buy Gilroy Gardens have suspended their proposal until the city council and residents figure out exactly what they want to see along the city’s western corridor.
Earlier this month, Tangram Global Group and Jangwon Group, which represent investors in South Korea and Guam, surprised the city council with a $35 million offer for the park and the 536 acres of mostly untouched land it sits on, according to people involved in the discussion. The investment team has told the city it intends to put additional money into the Gardens and operate it as a “world-class” theme park, but uncertainty surrounding the land’s future and residents’ desires led Tangram to put things on hold while Gilroyans figure out what they want.
“We think this will cause less confusion and allow the city to take the time it needs to chart a course for the future of Gilroy Gardens. Tangram Group would be pleased to resubmit our Letter of Intent to purchase Gilroy Gardens if and when the City Council determines they would like to see the property remain a theme park, and they determine they are willing to sell the property,” read a letter addressed to City Administrator Tom Haglund last week signed by Tangram’s chairman, John Kim, and its CEO, Greg Pack. Neither one returned messages Monday.
The group’s representative, Michael Russell of Carmel Business Sales, reiterated much of what the letter said.
“Our party just wants to make certain the city can decide what it wants first,” Russel said. “They want to put a lot of money into the theme park, and that’s where the rub is, whether the city wants that.”
Residents will have a chance to voice their opinions Oct. 27, when the council will hold a public meeting to discuss the future of the Gardens and what sort of zoning changes, if any, should occur. The park sits on about 70 acres, another 116 acres is zoned for development subject to council approval, and the remaining 350 acres sits as open space. But even before the council entertained the $35 million offer, the body had already directed staff to create a task force of residents to help guide its decision.
“It has always been the intention of the council that bought that land to put together a public group to study the pros and cons and what could happen in the future,” Mayor Al Pinheiro said Monday. “The park didn’t give us a discounted sale price for us to then turn around and sell it less than a year later for more money.”
Last February the city bought most of the physical park and all the surrounding land for $13.2 million, and city staff pointed out that the purchase could help the city avoid $41.6 million for a new community park and an additional corporation yard for city vehicles and equipment. The county tax assessor has pegged the overall property value for all the involved parcels at nearly $19 million, and council members hailed the land deal as a “steal” at the time of purchase, as well as an invaluable environmental and bargaining asset for the city.
Getting $35 million less than a year later is quite a return, Councilman Bob Dillon said, but it’s nothing the council would act on until hearing from residents.
“It is tempting, almost three times your investment in less than a year, and everybody understands the fiscal prudence of that, especially the seven of us tasked with looking after that on the council,” Dillon said. “But this is prudent on (the investors’) part.”
Councilman Dion Bracco likened the rapid succession of events – from a surprise closed session meeting Oct. 6 to discuss the investors’ offer to their suspension 11 days later – as “throwing Jell-O on the wall and seeing if it’ll stick.”
“I get offers for my business (Bracco’s Towing) all the time, and none of them ever pan out,” Bracco said.
Bracco also sits on the Garden’s nonprofit board of directors, which leases the land the park sits on at a discounted rate from the city and then contracts the park’s operations to Cedar Fair. The board’s contract with Cedar Fair expires in February 2009, and it has entered into preliminary talks with Parc Management, a Florida-based theme park operator that has expressed interest in adding a water park for children to Michael Bonfante’s struggling horticultural dream.
There’s also Councilman Perry Woodward idea of selling a roughly 10-acre parking lot to Eagle Ridge. The gated community borders the expansive and vastly under-used parking lot that serves the park’s administrative staff. Woodward suggested selling the lot to raise revenue for sidewalk repair and also to help narrow the city’s $3.9 million deficit.
