Gilroy
– A development plan that will rescue Bonfante Gardens from
looming bankruptcy received quick approval Monday night from City
Council members eager to see the park continue on its path to
financial recovery.
Gilroy – A development plan that will rescue Bonfante Gardens from looming bankruptcy received quick approval Monday night from City Council members eager to see the park continue on its path to financial recovery.
Following a 10-minute presentation by the city’s planning manager and brief comments from Chris Truebridge, president of Shapell Industries of Northern California, City Council spent five minutes unanimously approving a series of ordinances that allow the developer to build on a block of land now owned by Bonfante. Councilman Russ Valiquette, who works for the park, recused himself from the voting.
“It’s a good thing for Gilroy in many ways,” Mayor Al Pinheiro said following the approvals. “Hopefully Bonfante will make Gilroy a destination place.”
The development proposal allows the nonprofit park to sell 32.9 acres on its eastern border to Shapell, which will use the land to build 118 new homes as a northern adjunct to its Eagle Ridge golf course and residential community. The approval means that in coming months, Shapell will release millions of dollars to Bonfante, allowing the nonprofit horticultural park to keep up with interest payments to bond investors while reducing its $70-million debt load to a more-manageable $14 million.
“Without the project, we would not have had a Bonfante Gardens in the very near future,” said a relieved Bob Kraemer, president of Bonfante Gardens’ board of directors. The park will exhaust its reserve fund to make an estimated $1 million in interest payments to bondholders in May. The next payment, due in November, is expected to come from Shapell’s payments for the Bonfante land.
Only one person appeared before the council Monday night to voice minor concerns, including taking issue with Shapell’s plans to switch from a guarded gatehouse to a phone-operated gate at its Santa Teresa Boulevard entrance. Councilmen felt the concern is an issue for homeowners to address to the developer. The existing zoning and regulatory guidelines addressed the remaining concerns of the individual, who expressed support for the project overall.
“I think the process worked,” said Truebridge, referring to the lack of any significant opposition to the project. “We approached the homeowners before we ever approached the city and we allowed them to express their concerns about the project and went back there two or three times to address those concerns. It’s all about building a consensus. That’s the hard part. If we were making this presentation and we had a 100 homeowners down here telling them not to approve it, City Council would not feel good about acting.”
City Council has scheduled a special session April 11 for a final public reading of the ordinances – the last part of the bureaucratic process needed to move forward with the project.
To help restructure Bonfante Gardens’ debt, the City Council in August unanimously approved the park’s request for 99 housing permits on the property, an exception to the city’s growth-control law. Shapell has shifted 19 units approved previously as part of its Eagle Ridge development to the current proposal.
Under the approved plan, the new 118-house addition will have dual entry points. Primary access to the new homes will be through the Eagle Ridge development; secondary access through an existing gate at Bonfante Gardens is planned for weekday hours, but will be limited during the park’s peak weekend hours.
The nonprofit park posted nearly $23 million in losses during its first two seasons of operation, according to financial statements released in September. It did, however, post a profit in 2003 and figures for the first three quarters of 2004 indicate another profitable year.
“It’s nice to see that the community rallied around the park,” said Chris Lippman, a bond broker in Reno, Nev., whose firm represents $2 million worth of investments in Bonfante. “It bodes well for the community, for the park and for the bondholders. Time will prove that the park is beneficial overall for the area.”
