GILROY
– It will be up to half a dozen people, not the roughly 450
homeowners in Eagle Ridge, to decide whether a blockbuster land
deal with Bonfante Gardens can take place.
GILROY – It will be up to half a dozen people, not the roughly 450 homeowners in Eagle Ridge, to decide whether a blockbuster land deal with Bonfante Gardens can take place.
President of the Eagle Ridge homeowners association Dave Light confirmed Monday that Eagle Ridge developer Shapell Industries will only have to convince a handful of voting delegates to let the company acquire 33 acres of the cash-strapped park.
And the harsh reality is not sitting well with some Eagle Ridge residents.
“This should not be left to a few delegates. This should involve all the homeowners,” Eagle Ridge resident Joe Botta said. “This is not something that should be decided by the minority.”
Getting the approval of the homeowners association is mandatory for Shapell, which hopes to build up to 100 luxury homes on a 33-acre parcel abutting the northwest end of the existing Eagle Ridge development. The housing permits are currently tied to Michael Bonfante’s nursery property off Hecker Pass outside the park’s boundaries.
Shapell must convince City Council to authorize their transfer, so it could build the homes.
Botta says he will lobby City Council equally hard, asking the city dais to make Shapell come through with basic services he claims the developer promised but never delivered.
“We’ve got a gate on Ballybunion (Drive) that stays open from 7 to 7 and they won’t put a security guard there. I’m afraid some kid is going to get hit on his bicycle because people are driving 50 and 60 and 70 miles per hour on these streets,” Botta said. “I’m going to be there and ask the City Council who’s responsible for the safety of the people here.”
Delegates are elected by the homeowners and must own Eagle Ridge lots, but Light said the association’s bylaws do not call for a majority vote of the residents.
Some Eagle Ridge residents greeted the news of the Bonfante Gardens land deal optimistically late last week. They saw in it as an opportunity to press Shapell for amenities – such as a swimming pool, tennis courts and basketball courts – they thought were coming to them when they moved in.
Shapell officials have said they want to offer at least some of these amenities – if the land deal goes through – at no extra charge to monthly homeowners’ fees, but a handful of delegates may be less demanding than hundreds of disgruntled residents.
“Maybe there’s an exception to everything, but my understanding from talking to our attorney is that we have to follow our (bylaws) and let the delegates vote,” Light said. “We don’t have the option of throwing out our CC&Rs.”
CC&Rs, or Covenants Codes and Restrictions, are the binding rules for homeowners associations in California.
“I think it’s an overall fair process. These delegates were voted in by the people within their district so they probably have the closest relationship with the homeowners,” Light said.
It does not seem likely the board of directors for the Eagle Ridge homeowners association will push for a vote of the landowners, Light said.
Only one of the board’s five members was elected by Eagle Ridge landowners. The other four were appointed by Shapell, a right the developer has since it still owns many of the undeveloped lots.
Two of the appointed directors are Shapell employees.
If the Eagle Ridge homeowners association agrees to acquire the 33 acres, the matter will go in front of City Council. Councilmen played a wait and see approach after digesting the news that they would be soon ruling on yet another Bonfante Gardens matter.
In January, Council changed a bondholders agreement, allowing the park to miss its monthly debt payment without being foreclosed. In 2001, Council granted the housing permits to Michael Bonfante to make it easier for him to sell bonds using the nursery parcel as collateral.
The result was a $7.5 million loan from Bonfante’s friend John Fry, the technology store mogul. The money went into park operations to keep the struggling venture alive.
The permits were granted by Council on condition Michael Bonfante loosen his grip on the park’s operations. This cleared the way for a new board of directors and a new park operator – Paramount Parks, which produced last year the park’s first profitable season since its inception, according to officials.
“I think no matter what path you take with this it can look like the city’s giving special treatment to (Michael Bonfante),” Councilman Paul Correa said. “The major challenge is deciding whether or not it benefits the community. It’s not good if the city always has to step in to keep the park afloat, but I’m willing to take proper steps and tweak things to help the park for the long-term.”
Councilman Bob Dillon said he would likely support a housing permit transfer. However, Dillon said he would not support granting additional housing permits to Bonfante to replace the ones he will have lost.
“I would not approve more (housing permits) under any circumstance,” Dillon said. “That would be unacceptable to me.”
Meanwhile, some bondholders with liens on the park reacted to the deal with cautious optimism Monday.
Bud Byrnes, a Southern California investor representing a $2 million interest in the park, called the prospective land deal “ultimately a good thing for bondholders.”
Byrnes said if the park is able to sell excess land – including dozens of other unused acres it owns – it will reduce its debt, making it easier to use newfound profits to pay off the remaining creditors.
Several days ago, Byrnes expressed concerns that the city, by amending the bondholders agreement, was making it difficult for bondholders with liens on the park to ever realize their money. He would have preferred a foreclosure on the park, triggering excess land sales and a sale of the theme park to an outfit like Paramount or Six Flags.
“This isn’t the way I would have played it, but this is a good first step and I hope the homeowners association approves it,” Byrnes said.
