The firm that hopes to develop Gilroy Gardens into a $200
million water park and high-end resort will offer the city about
$50 million in cash and building projects to acquire the 536-acre
park, an investor with the firm said.
Gilroy – The firm that hopes to develop Gilroy Gardens into a $200 million water park and high-end resort will offer the city about $50 million in cash and building projects to acquire the 536-acre park, an investor with the firm said.
The offer will come Monday before a closed session of the Gilroy City Council regarding the park purchase, and just one week after the park board rejected a lesser offer from the firm, Alliant Real Estate and Financial Services.
“We want the community to be benefited from this,” said Robert McDuff, Alliant investor and consultant. “I wouldn’t have done this, if I didn’t live (in Gilroy), if I didn’t believe in Michael (Bonfante’s) dream.”
Included in the offer is $32.5 million in cash, roughly $10 million toward a planned arts center and more than $6 million to cover the city’s contribution to a public aquatics center and gymnasium at the new high school slated to open in 2009. The firm would also pay for an extension of Third Street east from Santa Teresa Boulevard to the park and give the city a 5-percent holding.
Councilmen were open to the possibility, but wanted to wait until they received a formal offer Monday morning before making decisions.
“Like any offer, I think it’s worth exploring and understanding what the details are,” Councilman Craig Gartman said. “I think we need to keep an open mind and take a look.”
Yet City Administrator Jay Baksa said the offer was “incredibly premature.” The city has not even decided that it wants to purchase the park, which would involve assuming a $12.5 million debt to park shareholders and delaying construction on a city arts center. If the city did buy the park, it would solicit public input on the best uses of the park and could not sell it before 2010 because of the nature of the park’s bonds, he added.
However, the city’s park purchase hinges on offers such as the one the firm is making, McDuff said.
“I guarantee the people of Gilroy are not going to want to buy the park outright,” he said.
Residents will not want to delay the arts center and drain the city’s construction budget for three years, McDuff said. The offer could put cash into the city’s hands within three months after the city handed over the park and would allow construction on the arts center to start within a year, he added. By the park’s proposed completion in summer 2009, it would supply about 1,700 jobs, McDuff said.
A risk involved in accepting such an offer is that the city has no guarantees that the firm would develop the park in a way residents approve, Baksa said. The city wants the park to maintain a low profile and is considering making the park public. Councilman Dion Bracco even envisions it as Gilroy’s Golden Gate Park.
McDuff and his associates have proposed an indoor-outdoor water park with a model downtown and six-story hotel. The grounds would host two roller coasters, a “mega water ride” and four music theaters. Despite this development, the foliage-dense, family atmosphere of the park will remain, McDuff said.
Yet Baksa suspects it will be hard to do this with the large-scale buildings that have been proposed.
“They’re talking about a major development, not a minor development,” he said.
The city would also want to get the park assessed before it accepted any offer, he said. While the offer to come Monday totals roughly $50 million, the park was assessed at $60 million in recent years, park board president Bob Kraemer said.
The city is taking its time to make certain that all intelligent steps are taken before committing to any offers, Baksa said.
“We’re trying to do this prudently and professionally,” he said. “Does that meet the timeline of the developers? I don’t know. That shouldn’t be the driving course of this thing. Our timeline should be dictated by doing this correct.”
