Freshman Councilman Perry Woodward sparked a long debate among
colleagues and staff when he said he wanted to watch over the
latter’s shoulders as it works out the purchase details of Gilroy
Gardens.
Freshman Councilman Perry Woodward sparked a long debate among colleagues and staff when he said he wanted to watch over the latter’s shoulders as it works out the purchase details of Gilroy Gardens.
This follows Woodward’s Dec. 3 introduction of his signature open government ordinance tailored for Gilroy, but transparency was not the only issue Monday night.
Councilman Bob Dillon told city staff they should embrace the free market and take out a 20-year loan to purchase the gardens in February 2008 for about $13.1 million – but the city should not lease the operations of the park back to Gilroy Gardens’ nonprofit board of directors for only $1 per year, he said, as recommended by city staff. The board’s contract with the park’s current operator, Cedar Fair, expires at the end of February 2008.
Such a cheap lease could irk residents who want the city to make more money from it to fix sidewalks and finance a new library and arts center, Dillon said. City Administrator Jay Baksa said city accountants kept money in the bank for the potential arts center and library and planned to repay the $13.1 million loan by borrowing about $20 million over 20 years from city funds dedicated to storm drains, sewer projects, city fleets, equipment and possibly gas tax and water funds.
The $13.1 million figure represents how much all of the park’s outstanding bonds will be worth in November 2010, when they are up for sale. The 536-acre property is valued at closer to $60 million, but the park’s board of directors offered to sell it to the city at a discounted rate in the fall of 2006.
“I can’t for the life of me figure out – perhaps because I am a capitalist – why we would lease back Gilroy Gardens for $1 a year,” Dillon told the council. “OK, they choked on $1.3 million, fine, but that doesn’t mean they get it for a $1 … I don’t want to make their lease payment as punitive as the debt, but it has to be something reasonable.”
The park’s nonprofit board of directors pays about $1.3 million a year to bondholders – a far cry from a single dollar, Dillon said. The board met its latest payment date in November when it forked over $800,000, according to Bob Kraemer, the board’s president. The next payment of $500,000 is set for March, according to Jatczak.
Councilman Peter Arellano and city staff pointed out, though, that the city has similar discounted leases with the Visitor’s Bureau and the library because they service the community.
But local conservative activist Mark Zappa seemed to fulfill Dillon’s vision of angry residents when he said the city should ask voters what they think about the gardens at a time when the city should be saving money for infrastructure to accommodate the proposed Westfield Mall, among other things.
“By the way, here’s two bucks to support the lease for two years,” Zappa said as he slapped two dollar bills on the podium before walking off.
When it came to the lease itself, Woodward told the council that Berliner-Cohen, the city’s law firm, recently denied him access to drafts because if Woodward had them, then the law firm would have to acquiesce the entire council, thus making the drafts public record and hindering the negotiation process, according to City Attorney Andy Faber.
The only way for Woodward to see the drafts, Faber said, would be for the council to create a subcommittee of three or fewer councilmembers, which it did by a 4-3 margin after much debate.
Councilmembers Craig Gartman, Cat Tucker, Bob Dillon and Woodward approved the creation of a subcommittee consisting of Gartman and Woodward, who will be able to view the leases but not publicize them, according to Faber.
“My goal is not to re-write the lease. My goal is to understand what the deal really is,” Woodward told visibly vexed city staff, Mayor Al Pinheiro and Councilmen Dion Bracco and Arellano. “This is an incredibly complicated, $13-million deal, and (Berliner-Cohen) has given us five sheets of paper. There’s more to it than that … I’d like to just make sure, that’s all.”
Before the 4-3 vote, Gartman told councilmembers they should not preempt himself and Woodward for wanting to do a little extra homework on the mammoth land deal.
“There are some people who don’t want to spend the time and effort to do an investigation. They just want to wait for staff to approve or disapprove,” Gartman said. “If you don’t want to participate, that should be OK, but please do not restrict other councilmembers.”
But Councilman Dion Bracco, who sits on the park’s board as a council representative, said Tuesday that it seemed ironic for Woodward, who has pushed for transparency, to concede to a two-member subcommittee that lies outside of public scrutiny. Pinheiro is the board’s former city representative.
Pinheiro and Arellano added that Berliner-Cohen and city staff should be allowed to do their jobs and then report to council Jan. 22 with a final lease agreement that the council can vet before approval or denial. But Woodward maintained that he needed more time to inspect the actual draft leases, not Berliner-Cohen’s “legal baby talk.”
“We’re going down the path of micro-managing and doing staff’s work … We’re going to have a long four years if this is the case.” Pinheiro told Woodward. “I don’t want to go to Berliner-Cohen and sit there and read their documents because then they might as well not do their job.”
“Well, that’s the beauty of it,” Woodward quipped, “you don’t have to be on the subcommittee.”
At one point during the meeting, Baksa stood up and asked if city staff and consultants should halt environmental, title, land and chemical inspections on the gardens, none of which have raised red flags so far, according to Assistant City Administrator Anna Jatczak. Woodward told an eye-rolling Baksa he just wanted to monitor the process.
Nonsense, said Gilroy Unified School District Trustee Denise Apuzzo, who approached the dais to admonish the council for its lack of faith in city staff.
“(School board members) don’t jump off to ad hoc committees to discuss something staff is working on. We don’t want to see every page of paperwork,” Apuzzo said.
But Woodward and Gartman do: “We’re going to do a lot of reading,” Gartman said.
