GILROY
A group of investors from South Korea and Guam are behind the latest proposal to buy Gilroy Gardens and the 536 acres of mostly untouched land it sits on, according to city officials.
The off-shore outfit has been behind resort-like projects in America before, according to City Administrator Tom Haglund, but its offering price for the Gardens and any development plans the investors have will remain unknown to the public until the city council can sort things out.
“As soon as we can make any information that’s pertinent to the community available, we’ll do so,” Mayor Al Pinheiro said Tuesday. “We want to keep an open mind and pursue all of our options.”
In a closed session Monday night, the council voted unanimously to have Pinheiro and Council members Perry Woodward and Cat Tucker sit on an ad hoc sub-committee. The three will explore the “unsolicited” and “unexpected” real estate deal proffered by a Carmel-based business broker on behalf of TanGram Global Group and Jangwon Group.
“They’re basically very large investor groups,” Haglund said, adding in an e-mail that they also have “other unrelated business ventures in the states.”
The California Secretary of State has had a Los Angeles-based business on file by the name of Tangram Global Group USA since Aug. 15, but the person on file could not be reached and calls to the registered office building went unanswered. The secretary’s office also had a Jangwon International Trading Co. on file, but a company profile described a drug company. And Michael Russell – the business broker and president of Carmel Business Sales who has tendered the Gardens offer on behalf of his overseas clients – did not immediately return messages for comment.
While figuring out exactly who the city is dealing with is one thing, figuring out exactly what residents want to do is another, Councilman Bob Dillon said.
“I don’t know who these investors are, but let’s see if they’re serious, and if they are, then we need to see if we really want to sell,” Dillon said.
Russell did say information about his clients and their proposal would surface as discussions with the council advance, but when, exactly, the public will have a chance to comment is still up in the air.
Under state law, the council may hold closed sessions to discuss only the price and the terms of payment being offered for a particular parcel of property – which Haglund assured is all the body has done. In that closed session, council members cannot discuss the pros and cons of a hypothetical, what-if transaction with other could-be buyers.
The Fourth District Court of Appeal in San Diego also ruled in 2002 – in Shapiro v. City Council of San Diego – that it is unlawful for councils to discuss the future design work of, say, a high-end resort at a sale site or to gab about future environmental reports or infrastructure and parking improvements there. The Court of Appeal also agreed with the lower trial court’s judge, who wrote that councils must “limit topics to instructions to its negotiators regarding the price and terms of payment for the purchase, sale, exchange or lease of specific real property.”
Assistant City Attorney Andy Faber and Haglund have agreed that the state’s open government law, known as the Brown Act, does prevent the council from striking development plans with negotiators – a process conducted in an open forum by the planning commission and city council – but they have also said “broad” provisions in the act allow the council to discuss issues related to the sale of the Gardens. Any materials received and compiled by the sub-committee are also off-limits under the Brown Act because it is a temporary committee that will dissolve when negotiations end.
“The council needs to stay on topic and stay within the broad safe harbor area provided by the Brown Act,” Haglund said. “In terms of evaluating (the investors’) offer, it would not be inappropriate for the seller (the city) to want to know why someone wants to buy it.”
Still, council members and Haglund have said they know how big of a deal the Gardens is to taxpayers who paid $13.2 million last February for what many have called a “land steal” and an invaluable environmental and bargaining asset for the city. When the city bought the land, council members believed the property could fetch upwards of $60 million on the fair market.
“This is a very large question for city coming quickly on heels of the purchase,” Haglund said. “The council may well hold some sort of study session or public hearing to figure out some way to solicit public input in all this.”
Council members have directed staff to create a task force of residents to help it decide the future of Gilroy Gardens, but opening the current closed session discussion up at this point is a bit premature; the council should have a chance to try and get the best terms for the residents and then bring that to them in an open session for consideration, just as it did with the purchase of Gilroy Gardens.
Councilman Woodward called the investors’ offer “very intriguing” and said he was “interested to see what happens next.”
Everyone seemed interested in getting more information the council can then compare with other offers.
“It’s only being responsible to the citizens to take a look at everything,” said Bracco, who sits on a separate sub-sommittee that also includes Woodward and Dillon; that committee meets regularly with the Garden’s nonprofit board of directors, which leases the 70 acres on which the park sits at a discounted rate from the city and then contracts the park’s operations to Cedar Fair. The board’s contract with Cedar Fair expires in February 2009, and as the nonprofit plans for the future, council members have agreed that the park deserves clear direction. That has become increasingly difficult, though, as Russell’s client’s offer is the second since the city bought the land and the physical park.
Parc Management, a Florida-based theme park operator, made a previous offer that a sub-committee of the city council – which includes Councilmen Perry Woodward, Dion Bracco and Bob Dillon – will discuss with the board soon. The company has indicated replacing Michael Bonfante’s struggling horticultural dream with a water park for children.
Then there’s Councilman Perry Woodward much smaller business idea, which he floated Sept. 15. He suggested the possibility of selling a roughly 10-acre parking lot to Eagle Ridge. The gated community borders the expansive and vastly under-used parking lot that serves the park’s administrative staff. Woodward suggested selling the lot to raise revenue for sidewalk repair and also to help narrow the city’s $3.9 million deficit.
“The prospect of getting quick money is appealing, but we bought this park for the citizens,” Dillon said.
