After three years of discussions, the City of Gilroy took a major step forward June 20 in a process to construct a pair of ice rinks at the Gilroy Sports Park.
With a 6-0 vote, the city council approved a term sheet with Sharks Sports & Entertainment that will pave the way for a future operating agreement. Councilmember Carol Marques was absent due to testing positive for Covid-19.
The Gilroy City Council entered into an exclusivity agreement with Sharks Sports in 2019, and the agreement has been renewed yearly since then, as the pandemic stalled negotiations.
The city and Sharks envision a 100,000-square-foot facility located at the Sports Park at 5925 Monterey Frontage Road that would house two National Hockey League-sized ice rinks, as well as spectator seating, training rooms, multi-purpose rooms, offices, a restaurant and pro shop. About 387 parking spaces are expected to be part of the project.
Per the term sheet, the Sharks are expected to offer public skating times at the facility, while also offering after-school programs that include free admission and instruction for up to 5,000 youth per year.
Jon Gustafson, senior vice president of Sharks Sports and Entertainment, said the proposed facility will help grow the sport in the region.
“Not only will it be a draw for the local community, it will be a regional draw for events such as youth hockey tournaments and figure skating competitions,” he said.
To fund the $30 million project, the city would issue municipal bonds, which would then be reimbursed by the Sharks over a 30- to 35-year period with interest.
The term sheet is non-binding, City Administrator Jimmy Forbis said, and it provides a basis for more detailed documents in the future.
But before those negotiations continue, two things must happen first.
Gilroy officials are seeking to amend the city charter in a way that modernizes and speeds up the construction bidding process.
Specifically, a “design-build” form of contract would prove beneficial for the Sharks project, Forbis said, where the city would only have to bid the project with a contractor. That contractor, in turn, would then form a team that includes a designer.
Currently, the charter requires the city to bid the project separately to a designer and construction contractor, which adds extra time and complexities, according to Forbis.
Being a charter amendment, the proposal must be approved by voters, and the council earlier in the June 20 meeting agreed to place the matter on the November ballot.
In addition, the city needs to comply with the state’s Surplus Lands Act, which requires jurisdictions to make all “surplus” properties—defined broadly as land that is not currently in use by cities, counties and districts—to be made available to affordable housing developers before they can be sold or leased.
As such, the council is scheduled to declare the land as surplus at its July 5 meeting. When that happens, the city will notify the state of its decision, and the state’s housing department will need to notify affordable housing developers.
Under the law, affordable housing developers have 60 days to state their interest after a jurisdiction declares the property a surplus. If a developer does step forward, the jurisdiction must enter into “good-faith” negotiations with them for 90 days.
The city is not required by law to sell the property to a housing developer.
The Gilroy Sports Park and the Sharks facility are part of the focus of the Gilroy Economic Development Partnership, a group that consists of representatives from the Gilroy Chamber of Commerce, Gilroy Economic Development Corporation, Downtown Gilroy Business Association, Visit Gilroy, Gilroy Gardens and Gavilan College, as well as Mayor Marie Blankley, Councilmember Zach Hilton and City Administrator Jimmy Forbis. The group, formed in early 2020, has tasked itself with identifying ways to grow the city’s assets and elevate its status as a recreation destination.
Jane Howard, executive director of Visit Gilroy, said she couldn’t contain her excitement over the Sharks project, noting that the approval of the term sheet “feels like it’s Christmas Eve.”
“This is a gift to Gilroy,” she said. “Here we now have a huge opportunity for this community. We will have sports tourism in this community. Never have we been able to offer that.”
The term sheet can be found at bit.ly/39P6AXY.