Gilroy
– City leaders agreed Wednesday night to move forward with the
proposed purchase of Gilroy Gardens Family Theme Park, a deal that
could cost the city millions.
Gilroy – City leaders agreed Wednesday night to move forward with the proposed purchase of Gilroy Gardens Family Theme Park, a deal that could cost the city millions.
The decision, announced in open session following a two-hour closed session meeting of city council, could one day eliminate risk of developers carving up the park’s 516 acres of wooded foothills along Hecker Pass Highway. Fears of losing the land to development have flourished in recent years as the park struggled to avoid bankruptcy court.
On Wednesday, Mayor Al Pinheiro capped the closed meeting by announcing that although no formal action was taken, “council decided to continue to further explore the financial aspects of acquiring Gilroy Gardens.”
He declined to discuss additional details, saying only that more information would become public this morning during a press conference at Gilroy’s new police headquarters.
After announcing the proposed sale Friday, Joel Goldsmith, a member of the park’s board of directors, said the sale would involve paying off all or part of the nonprofit theme park’s $13 million debt. If approved, the sale could mean other projects get bumped down the city’s list of priorities.
“I think Gilroy needs other things,” said resident Sarah Aceves on Wednesday morning. “Fix the sidewalks or the parks that you already have first.”
Larry Hernandez, another Gilroyan, took the opposite view.
“Be it New York or Hong Kong, every great city needs great attractions and parks,” Hernandez said. “Anything that adds value to the city, money should not be a factor. It may not make money, but it’s a valuable asset.”
In its six years of operation, the park has only once earned enough to cover its annual debt payments to bondholders. In 2005, Gilroy Gardens brought in nearly $1.9 million, leaving plenty of funds to cover an $800,000 payment in November and $500,000 in May. The park also covered its November payment last year and has enough money in its reserve account for its upcoming May payment, according to annual financial statements released in February.
It remains unclear, however, if Gilroy Gardens can pay creditors beyond this spring. Kraemer would not say how much money remains in the park’s reserve fund, which must be restored to at least $1.3 million by the end of 2008.
The baseline level is required under the terms of a financial restructuring completed in June 2005. The deal reduced the park’s debt from $70 million to its current levels, but it also drained the park’s reserve fund, Kraemer said. If the park fails to pay creditors or boost reserves to required levels by 2008, it could find itself in bankruptcy court and at the mercy of creditors or developers.
Kraemer and Goldsmith will hold a joint press conference today with Mayor Al Pinheiro and Councilman Dion Bracco. The councilman recently replaced Pinheiro as the city’s appointee to the park’s board of directors.
Bracco has strongly endorsed the purchase as a chance for Gilroy to get its own Golden Gate Park. Following the meeting, he said was “even more behind” the proposal.
“There are just so many advantages for the city,” he said. “In the future this is going to save us money. We won’t have to build another regional park on this side of town. This will complete our trail system. And then when you look at that park, it’s more than a theme park – there are baseball diamonds, a swimming pool, a whole bunch of buildings, warehouses, corporate picnic areas, an amphitheater. This is really going to be a plus. I’m really for it.”
Responding to concerns about excessive secrecy, Bracco said council avoided topics that must be discussed in public meetings. State laws allow public agencies to meet in private and discuss the price and terms of payment for a specific piece of land, but they do not allow secret discussion of broader policy issues such as how a land sale fits within a city budget.
“Nothing at all broached the area of policy,” Bracco said. “It was strictly about finances and the procedure of the steps we’ll have take.”
The meeting attendees included city council, City Attorney Linda Callon and an associate, City Administrator Jay Baksa, Assistant City Administrator Anna Jatczak and City Community Services Director Susan Andrade-Wax. Absent were Councilmen Paul Correa, who was ill, and Russ Valiquette, who recused himself because he works at the park.
