Council acknowledges need to clarify relationship between city,
Bonfante Gardens and possibly recast appointee’s role
Gilroy – Hoping to quell talk of potential ethical conflicts, Mayor Al Pinheiro has once again asked his colleagues to ponder Gilroy’s relationship with a struggling nonprofit theme park.
For three years, Pinheiro has stood in the middle of a rocky marriage between City Hall and Bonfante Gardens. His dual role as council member and appointee to the nonprofit park’s board of directors has inspired repeated conflict-of-interest charges.
In January, Pinheiro defied calls by the Dispatch editorial board to relinquish the appointment and instead asked for and received the blessing of city council to continue serving on the board. The informal vote came two months after revelations that the park planned to buoy its financial reserves by developing several acres of land facing its entrance along Hecker Pass Highway, a scenic corridor framed by farmland and hillsides.
During informal policy talks Friday, a different tone marked discussion about Pinheiro’s involvement on the board. Rather than dismissing complaints about a potential conflict of interest, Pinheiro and council members acknowledged the need to clarify the nature of the relationship and possibly recast the role of appointee.
“There was one council member that felt there was need for more information to be brought back to council,” Pinheiro said, referring to Councilman Peter Arellano. “In turn, it brought up the question of how much you can bring back to council. If for example there is a board meeting where there are land discussions (about Hecker Pass)…obviously that’s a direct impact to the city and that council member should be talking to the council about that. We’re getting that answered so that there’s a clear understanding by council what the requirements should be.”
Officials did not delve into the possibility of substituting a citizen representative for the council appointee, or the potential of a rotating schedule that would allow all seven council members to serve on the park board. City Attorney Linda Callon, who did not return a call for comment, repeatedly cut off discussion on the topics. She warned councilmen that such changes could affect the park’s status as a nonprofit and the long-term financial arrangement between the city and the park.
The roots of the relationship between Bonfante Gardens and the city date back to the late ’90s, when grocery store magnate Michael Bonfante, whose family created Nob Hill Grocery, convinced city leaders to issue bonds to help finance his vision for a horticultural park. At the time, the deal looked like a smart move for the city: any profits the park earned would go toward the city’s tax coffers while the bonds would be secured by the 500 acres that comprise the park and its surroundings. The city agreed to issue $70 million in bonds that helped Bonfante create manicured gardens and “circus” trees that seem to have sprouted from the imagination of Dr. Seuss.
But instead of crowds, the park only saw losses. In 2002, Bonfante convinced city leaders to allow the park to cash in on 33 acres of land in a development deal with Shapell Industries, the Bay Area company that created the adjacent gated Eagle Ridge golf community. As part of the deal, which helped the park reduce its debt load from $70 million to $13 million, the nonprofit was required to create a seven-member board of directors that included a city council appointee.
By serving on the board, the city hoped to keep a close watch on the park’s activities. Council members touted the importance of having “eyes and ears” on the park’s board before unanimously re-affirming Pinheiro’s appointment in January.
The more wary tone of council members last week comes after recent revelations that Pinheiro, in his role as Bonfante appointee, is helping to negotiate a rent hike for the South Santa Clara Fire District. A fire official has said that cost increases could force the agency to close or relocate the facility in the distant future, though he stressed that any changes would ensure adequate fire coverage for west Gilroy.
The failure of such information to reach council in a timely fashion has led city leaders to rethink the city’s role on the park’s board.
Bob Kraemer, president of the Bonfante board of directors, declined to comment on council discussions that could alter the city’s relationship with the park. But he found no ethical dilemma with a mayor or council member serving on the park’s board.
“There are 20 or more boards and organizations that city council members sit on and I frankly don’t see any difference,” he said. “We are a private organization and that was known when the whole arrangement was set up and it’s up to the city to determine where they are legally and where they should go from there. I know of nothing that has changed since 2002 as far as the desirability of having Bonfante Gardens…have a very close relationship with and be in support of Gilroy.”
But Councilman Craig Gartman pointed one difference between serving on the Bonfante board and sitting in on discussions at other agencies such as the Valley Transportation Authority.
“It’s not like VTA because those are public meetings, with public minutes,” Gartman said. “The difference is if I walked up to that (Bonfante board) meeting and asked to sit in, they’d say ‘Forget it.'”
Council members made no decisions about the city’s future involvement on the board. They directed Callon to study the legal implications of redefining the relationship.
