The Garlic Festival Association’s room is just how it left
it.
The Garlic Festival Association’s room is just how it left it.
Nearly a year after the nonprofit moved into its spacious downtown digs at 7600 Monterey St. – expecting to sell the 24 condos above its first-floor office space – the nonprofit’s board of directors voted unanimously last month to return to its old office across the street. The Gilroy Chamber of Commerce will lease the office at 7471 Monterey St. to the association at a generous discount.
The move is a financial boon for the association after it lost more than $1 million developing its commerical-residential project as the housing market crumbled. Last October, after the condos spent five months on the market without a single offer, the festival board decided to stop making payments on the $8.8 million construction loan it took out with its partner, Pleasant Valley Development Group, to co-finance the project built by Tanglewood Construction, whose president, Randy Moen, also heads Pleasant Valley.
“For us it makes perfect financial sense to move,” said 2009 Board President Kirsten Carr. “All that money – that is what happened in the past … Now we’re going to focus on maintaining the success of future festivals.”
With only three months to go until this year’s garlic gala, May and June may seem like a bad time to pack and lug boxes, but the association will have the help of long-time friends at the Chamber of Commerce, which owns the building at . The chamber has also agreed to a “favorable” monthly lease payment of $1,000, or about 28 cents per square foot in a city where the average price per square foot runs about $1.60, according to online real estate listings.
“More important than the lease terms is that we will be able to create that atmosphere again,” Carr said. “This is making a positive … out of our situation.”
The breezeway that splits the Chamber’s building and connects Monterey Street with Gourmet Alley will once again play host to festival folks and others at the Chamber and the Economic Development Corporation. The EDC has occupied part of the Chamber’s side of the building free of charge for 13 years along with other community groups that occasionally need space, according to Susan Valenta, executive director of the Chamber.
“We’re very excited about having the festival move back,” Valenta said. “They’re the perfect neighbor.”
Before the association moved last May – and before the chamber gave the building’s facade a makeover – it sold its half to the chamber and an additional nearby lot for a total of $600,000. It then took $400,000 of its own money to come up with the $1 million down payment for the loan, which the Pleasant Valley Development Group matched. That money disappeared with the housing bubble, though, and South Valley National Bank now owns the unoccupied building. But Brian Bowe – the association’s executive director who could not be reached for comment – assured residents in October the association’s reserve still held more than $850,000, and Carr said Thursday the rainy day fund remains robust.
“The reserve fund is still very healthy,” Carr said without going into specifics. She added that the association had never formally signed a lease for its office at 7600 Monterey St. and was free to move out.
South Valley National Bank Senior Vice President Kurt Michielssen declined to comment on the future of the four-story terracotta stucco building at 7600 Monterey St. and bank spokesperson Debbie Whiteley did not return messages. Whether the condos go up for auction, rent or sit vacant for an indefinite time, Michielssen, who also sits on the EDC’s Board of Directors as its chairman, said he looked forward to welcoming the association back home.
“This brings back a group of organizations that have a long history together,” Michielssen said.
That history dates back to 1992, when the festival originally bought the building from the former Continental Telephone Corporation as a step up from its previous office on First Street near Togo’s sandwich shop. When the festival moved out last summer, it effectively resigned its co-ownership of the building it had shared with the chamber since the early ’90s.
The lease by the numbers
$1,000 – rent per month
5 – years on the lease with Chamber
$1.60 – going rate per square foot in Gilroy
28 cents – rate per square foot the festival will pay the Chamber
4,500 – square footage of festival’s office at 7600 Monterey St.
3,500 – square footage of festival old office in Chamber of Commerce building
