Gilroy Gardens Sold

[Shockwave]

Gilroy Gardens was sold a couple of days ago to the city of Gilroy for $13.2million.

 

Here's a couple of articles on it.

 

Residents got their new 536-acre park Friday for exactly $13,247,484.76.

 

Council members rallied together late January to unanimously approve the city's purchase of Gilroy Gardens, and the close of escrow and final hand shake came Friday afternoon.

 

"Congratulations! The deed was recorded (Friday) afternoon, and the City is now the proud owner of an additional 536 acres or so of lovely property!" wrote City Attorney Andy Faber in an e-mail to city councilmembers, city officials and consultants.

 

There are still some post-closing real estate matters to deal with, Faber wrote, in addition to the $140,525 in expenses the city spent on due diligence inspections, bond counseling, boundary surveys and property valuations that had been going on since August 2007. For the most part, though, it's done.

 

What's not done, though, is a pending lawsuit by a former gardens employee, David Lee.

 

Lee filed a labor practices lawsuit in Los Angeles County Superior Court Jan. 11 against the park, according to court documents. The case is in the process of moving to the Santa Clara County Superior Court in San Jose, according to Eric Kingsley, a partner at the Los Angeles-based law firm, Kingsley & Kingsley, that is representing Lee.

 

Lee claims, among other things, that the park failed to provide him with adequate meal breaks and failed to reimburse expenses he made related to the job. Lee could not be reached for comment.

 

A representative for Cedar Fair, which owns Gilroy Gardens and 16 other amusement parks - four of which are in southern California - said the company will treat the lawsuit seriously, but declined to comment further.

 

"We really don't comment on ongoing litigation," said Director of Sales Jim Stellmack. "We always take any lawsuit or any litigation seriously."

 

Councilman Perry Woodward, a lawyer who has handled class action lawsuits in his past, said he did not think the city would be affected by Lee's lawsuit because Lee has issues with the business, not the land that the city owns.

 

Lawsuit aside, the city's deal with the park allows the former to charge the latter's nonprofit board of directors 10 percent of its positive earnings. The city owns the 536-acre horticultural park and all of its rides and buildings and will lease the whole package back to the board.

 

Over the past six years, the park has earned about $258,000 annually after subtracting its operating expenses from its operating revenue and then adding other revenue such as interest on investments, according to Assistant City Administrator Anna Jatczak. This translates into an annual lease payment of about $25,800.

 

This is a far cry from the $1.3 million the park had to pay bondholders each year. The gardens earned enough to cover its annual debt payments to bondholders only once in 2005 when it ended up with nearly $1.9 million. This left plenty of funds for the board to cover its $800,000 payment in November and its $500,00 payment in May. The rest of the years the park has had to rely on reserves to cover its two annual payments.

 

Now that does not matter, though, and when it comes to dissolving the park, the council will have the power to do so whenever it wants - and for whatever reason - with a simple majority. If the park fails on its own, though, it would naturally fall into city hands without a council vote. Either way, the city would need to find another tenant or use for the land, and council members have said they have not yet fleshed out these hypothetical situations.

 

The city's 20-year loan for about $14 million represents how much all of the park's outstanding bonds would have been worth in November 2010, when they were up for sale, plus ongoing consulting and legal fees.

 

In his e-mail, Faber specifically thanked Jatczak "for being the lead negotiator and spark plug, and (former City Administrator Jay Baksa) for putting the wheels in motion." He also thanked Facilities and Parks Development Manager Bill Headley for help in the environmental area, Finance Co-directors Christina Turner and Cindy Murphy, the bond counselors, his own law office, Berliner Cohen, the council, and, of course, Gilroy Gardens.

 

http://www.gilroydispatch.com/news/237436-park-changes-hands

 

 

Second Article:

 

The "Gilroy" in Gilroy Gardens has become more meaningful.

When the park opens for the season later this month, the city now owns the theme park land and its rides.

 

Gilroy closed escrow Feb. 29 with Gilroy Gardens, formerly called Bonfante Gardens, on its $13 million purchase of a 530-acre site on Hecker Pass Highway.

 

"By and large, citizens that I've talked to think it's a good deal," said Councilman Dion Bracco, who sits on the theme park's board and has been among the biggest supporters of the expected city purchase. The city council voted unanimously to purchase the park.

 

Despite the new ownership, nothing much will change for the average family who shows up looking to ride the Ferris wheel or tour the thousands of trees and flowers that provide the theme park its name.

 

What's really changed is who owns the land and equipment: The city bought those two assets from Gilroy Gardens by paying off $13 million in debts the non-profit owners owed bond investors. Ohio-based Cedar Fair Entertainment Co., which also operates Great America in Santa Clara, will continue to manage Gilroy Gardens' daily operation.

 

To finance the purchase, Gilroy is dipping into about five other city accounts, and will pay itself back over the next 20 years.

 

While $13 million may seem like a lot of money, at $23,000 an acre, many analysts said that price is a good deal.

 

Supporters of the purchase had worried that since the park likely wouldn't

be able to make its payments, a developer would step in and turn the beloved area into cookie-cutter homes and condos.

Critics, however, voiced concern that Gilroy wouldn't have enough money to build a long-awaited cultural arts center and spend on other city priorities.

 

The park has struggled. Annual attendance ranged from 400,000 to 460,000, and brought in revenues of $12 million a year, which barely allowed it to pay the bills.

 

While the park is governed by a voluntary board, it had been managed for the past 5 1/2 years by Cedar Fair. In March 2007, the site was renamed Gilroy Gardens to more closely identify with the city and ride the coattails of the famous Gilroy Garlic Festival, according to officials.

 

The park was the brainchild of Michael Bonfante, former owner of the Nob Hill grocery chain, who conceived of the horticultural oasis more than 20 years ago. He originally built a recreational area at the site, complete with swimming pools, baseball diamonds and soccer fields for the employees of his 27 stores. An avid horticulturist and past owner of Tree Haven Nursery in Gilroy, Bonfante conceived the idea to build a theme park that would combine his passions for flowers and trees with his desire to entertain young families.

 

In 1997, Bonfante established the park as a non-profit organization, with Gilroy as the beneficiary. The next year, Bonfante sold his family's grocery chain to Raley's to focus on the park that became known as "'Hecker Pass - A Family Adventure." After finally opening in 2001, the cost of building the park had zoomed from its original estimate of $25 million in 1988 to $120 million and its name had changed to Bonfante Gardens.

 

Even as it opened, the park was staggering under a $70 million debt. To help with payments, Gilroy allowed the park to sell a 33-acre parcel on which a developer could build almost 120 homes. The park sold the land to Shapell Industries for $18 million. Those deals combined to reduce the debt to a more manageable $13 million.

 

And to prevent more land sales, the board turned to the city to consider paying off the remaining bond debt of $12.6 million and placing the park under Gilroy's control.

 

"Ten years from now, people will go out there and be very glad the city council took this on and saved this area of town," Bracco said.

 

http://www.mercurynews.com/breakingnews/ci_8478853?nclick_check=1

 

 

 

 

So that means Cedar Fair can't ruin it. Good news I'd say.

[cfc]

I hope this park survives. It's actually a very nice place, especially for families.

[Tanks4me05]

I may have never gone to California before, but I saw plenty of pictures and videos, and GG looks amazing! But sadly, the place needs some thrill rides. Even a custom Maurer Söhne creation (Booster or Xtended SC) would be nice - relatively cheap and effective and can potentially be themed very well. (The small track guage of the Spinning coaster can make it easier in terms of removing trees and stuff, and a terrain spinning coaster would actually be very awesome.)

 

I hope that this park will keep running. Despite the lack of thrills, I have this as a high priority visit for my super huge West Coast/Central/South America trip I have been planning for my post College Years (I'll graduate high school in 2011 - yes these super trips are still a ways away.)

[cfc]

Another family coaster would be nice, but I think it could use a first-class flume (or even rapids) ride. Gilroy is one hot place during the summer.

[Rocket Rodder]

This place is in California???

 

Wow. I'm SO there next chance I get! It looks amazing!

[ebl]

^^ Agreed. A flume would work very well there. The two coasters they have are...OK, but a good family coaster would round out the ride package nicely. Something unique would be ideal.

 

I've only been to the park once (2004), but I've always wanted to go back and bring Diana. She'd get a kick out of it.

 

Eric

[Big Mike]

I will be visiting in October, will they still let me use my Cedar Fair Maxx Pass?

 

 

Peace, Big Mike

[Reality15]

Read the second article again...

 

Ohio-based Cedar Fair Entertainment Co., which also operates Great America in Santa Clara, will continue to manage Gilroy Gardens' daily operation.

Cedar Fair is still going to manage the park. They never owned it in the first place, in the same way they don't actually own Star Trek: The Experience or the former Camp Snoopy (Nickelodeon Universe). They only manage these two properties.

[Big Mike]

OK, thanks dude!

 

Go Wings!

 

Formally from St. Clair Shores.

 

 

Peace, Big Mike

[Mechanic]

It's a very nice little park for families. I absolutely agree that a flume or river rapids ride would be a great addition for the park. If they were to ever add another coaster, I think a terrain hugging suspended coaster would be a great fit as well.

[knottslover77]

I always wanted to visit this park it looks wonderful. I hope it survives.

 

--Jay

[darklingscribe]

I still think this park has a lot of potential. I think of it as being similar to Holiday World before they got the Raven (though truthfully I have no idea what Holiday world was like before 1995).

 

Gilroy Gardens really can't afford any huge addition at the moment, but the rides I think it needs in order to really start brining in people are a flume, a small wooden coaster (something that wouldn't cost much but could bring in enthusiasts like the Raven did) and a water park. It is so hot in Gilroy that any water park would, I think, bring in a ton of locals.

[DBru]

I think this is a smart move for Cedar Fair. The park just didn't seem to fit in with the rest of the Cedar Fair parks... (even if they are still going to help out with daily operations...)

[Sean Menefee]

I'm glad to hear this. This park has soo much potential because of it's natural beauty and terrain. For the people who aren't very familiar with Gilroy, you can see some photos of the park from 2006, when it was still Bonfante Gardens.

 

http://www.sm2designs.com/gallery/thumbnails-18.html

 

-Sean

[Alpenguy]

Gilroy Gardens needs a themed flume with singing vegetables.

 

I'm just glad to see it's apparently stable for now, cause it's a fantastic little park plagued by mediocre location and an image that isn't eXtReM3 enough for people to mindlessly flock to it.

[Sean Menefee]

Yeah the park itself is very pretty, the town of Gilroy not soo much. We love visiting the park, but it's usually an afterthought of a CGA or Santa Cruz trip to be honest. If you're not in the general Bay Area, it's a hike to get all the way out to Gilroy, and that tends to make it so we only see the Gardens a few times a year.

[Reality15]

I think this is a smart move for Cedar Fair. The park just didn't seem to fit in with the rest of the Cedar Fair parks... (even if they are still going to help out with daily operations...)

Cedar Fair never owned the park in the first place. They've only been managing it, never owning it.

[DBru]

^Oh, who owned it then?

[Reality15]

I'm actually not quite sure who owned the park before. I believe it was just a bunch of investors, if I'm not mistaken. Once again, I'm not quite sure, but I know for a fact that Cedar Fair (and Paramount Parks before them) did not own the land. I'll try looking at older articles from back around '01-'02... I think that's when it was sold for the first time.

[bbison]

Yeah the park itself is very pretty, the town of Gilroy not soo much. We love visiting the park, but it's usually an afterthought of a CGA or Santa Cruz trip to be honest. If you're not in the general Bay Area, it's a hike to get all the way out to Gilroy, and that tends to make it so we only see the Gardens a few times a year.

 

I would dare say it's easier to get to Gilroy than Santa Cruz for most everyone that's not already on their side of the hill. It's 35 minutes from Downtown San Jose to Gilroy; it could easily be double that to get to SCBB on a sunny weekend.

 

Glad to see my hometown park will be around for a while longer. My kids have been spoiled by having it so close all these years, and for the under 10 crowd it's hard to beat the place.

 

Oh, the "owners" were a non-for profit corporation set up by the founder, Michael Bonfante. There wasn't much to "own" as they were saddled with construction debt from day 1. But the land it's on in the foothills is adjacent to one of the nicer parts of Gilroy where houses run $1-$2 million each.