GILROY
– Just days after Bonfante Gardens directors signed a
much-talked-about debt-repayment deal, the president of the park’s
board has released details on even more of the park’s financial
status.
The letter comes at the same time Mayor Al Pinheiro is seeking a
ruling from the state regarding his right to simultaneously sit on
City Council and the Bonfante Gardens board of directors.
GILROY – Just days after Bonfante Gardens directors signed a much-talked-about debt-repayment deal, the president of the park’s board has released details on even more of the park’s financial status.
The letter comes at the same time Mayor Al Pinheiro is seeking a ruling from the state regarding his right to simultaneously sit on City Council and the Bonfante Gardens board of directors.
In a letter sent to the editor of The Dispatch, Bonfante Gardens Board President Bob Kraemer said more than one-third of the park’s $70 million debt is owed to Michael and Claudia Bonfante. However, the Branson, Mo. couple will receive none of the cash generated by the planned sale of 33 Bonfante Gardens acres to Shapell industries, the developer of Eagle Ridge.
Kraemer said the information was released partly because the debt agreement was finalized, and partly to dispel beliefs that the city’s recent decisions related to the park had an underhanded purpose of helping the Bonfante family.
The Eagle Ridge land deal will generate the cash to pay off a major chunk of the debt.
”We are not sure how anyone can believe that the restructure will financially help Michael and his family. It will not, and it will surely cost them considerably,” Kraemer wrote in the letter to the editor. ”What Michael will get is settlement of the debt issue, and most of all, the belief that the … park will be saved and continue to enrich and educate the people who visit.”
The Bonfantes could not be reached for comment.
In the letter, Kraemer says the park cost about $120 million to build and the current debt is $70 million.
”We are not sure where the difference of $50 million came from, but we assume that it came from Michael’s own resources,” Kraemer’s letter states.
The 33-acre land deal will reduce the $70 million debt to $14 million. The $14 million is owed to Putnam Securities, the majority senior creditor of the park.
Other bondholders are getting paid back at a percentage-on-the-dollar rate. Senior bondholders will receive an offer at close to full value of their bonds. Junior bondholders and other lenders are receiving a significantly smaller portions.
As for Pinheiro, he is asking the city attorney to request a ruling by the state’s Fair Political Practices Commission by next week. The mayor has been pressured by The Dispatch to refrain from voting on Bonfante Gardens issues when they come before the City Council.
While City Attorney Linda Callon has already issued an opinion that Pinheiro is not violating conflict of interest statutes, the mayor says he wants to have the question answered once and for all.
”I don’t want to be part of something if it’s illegal,” Pinheiro said. ”If there is a question, then we should get it answered.”
Callon has said Pinheiro is not in conflict since he has no financial ties to the nonprofit park. The Dispatch has argued that Pinheiro’s presence on both boards makes it impossible to vote with only the best interest of the city in mind.
Pinheiro said he has not felt pressure from the community to recuse himself from voting on park matters. He also said he considers his vote as, essentially, weightless. Since there are five other Council members voting on park matters, Council can reach a majority with or without his vote.
Councilman Russ Valiquette, a Bonfante Gardens employee, has recused himself from votes related to the affairs of the park.
“We can do the math. My vote isn’t going to mean anything,” Pinheiro said.
The latest information on the debt restructuring deal is accompanied by ongoing questions. The Dispatch obtained a copy of the original senior bondholders agreement which contains a clause prohibiting additional debts.
The information raises questions about how the park was able to take on additional debt after issuing the original senior bonds.
”I can’t worry about anything that happened ahead of time,”Kraemer said Wednesday. “All we can do is make this (debt restructuring) deal as good as we can for as many people as possible.”
