GILROY
– For the first time in its financially troubled history,
Gilroy’s horticultural theme park will turn a profit this year,
park officials say.
At Bonfante Gardens, attendance is up 14.5 percent from last
year, sales of season passes have doubled and daily operations are
running smoothly since opening for a third season in April under
the direction of Paramount Parks.
GILROY – For the first time in its financially troubled history, Gilroy’s horticultural theme park will turn a profit this year, park officials say.
At Bonfante Gardens, attendance is up 14.5 percent from last year, sales of season passes have doubled and daily operations are running smoothly since opening for a third season in April under the direction of Paramount Parks.
But given a still looming multi-million-dollar debt, it will take flexibility from the park’s creditors before Michael Bonfante’s vision-turned-fiasco is out of the woods.
“Having been in business and seeing many turnarounds in my time, I think it’s definitely fair to say this is a turnaround,” said Bob Kraemer, chairman of the park’s board of directors. “There’s no doubt that having Paramount take over daily operations has made the significant difference we’d expected.”
Paramount Parks, which owns and operates Great America amusement park in Santa Clara and is under a five-year contract to manage Bonfante Gardens, releases little financial or attendance information, but Kraemer and fellow board member Al Pinheiro both described financial records for the months of April through June as “in the black.” The newfound profitability, attributable in large part to the piggybacking of season pass and advertising campaigns between the two parks, means that Bonfante officials must now begin the second phase of the turnaround project – paying off its monstrous debt.
The park, which cost $100 million to build, has a four-armed debt that includes an $8.5 million loan from John Fry of Fry’s Electronics, roughly $28 million in bonds and an undisclosed amount of other bonds and direct loans.
“We’re at a point in time where things are looking good operationally. We’re in the black instead of in the red,” Pinheiro said. “However, that does not take away from the debt service of the park we inherited from day one.”
Bonfante Gardens officials, Kraemer confirmed, have been meeting with Fry, park founder Michael Bonfante and other creditors to discuss the theme park’s financial status. Kraemer said the meetings were not loan restructuring attempts by the Bonfante Gardens board.
There had been rumors and concerns that the board wanted to ask its deep-pocketed creditors to let the park pay back what it owes at pennies on the dollar. Although this is not happening, Kraemer said he does hope Bonfante creditors can be “flexible.”
“We need to make it through the season (which goes through October), gather all of our operations information and then go back to our creditors,” Kraemer said.
Creditor Michael Bonfante did not return phone calls made to his Branson, Mo., home. And Fry said through a company spokesperson he was uncomfortable discussing a private financial situation between him and Michael Bonfante.
The good news for Bonfante Gardens is that creditors do not seem to be demanding they get paid.
“John (Fry) didn’t evidence to me any outward concern or negativity. He’s not losing sleep,” Fry’s spokesperson Manuel Valerio said.
Bonfante Gardens has previously reworked payment plans. Deals were cut and payment plans were restructured when Bonfante Gardens struggled to pay the park’s various suppliers. Kraemer stressed that in the last year and a half Bonfante Gardens has never missed a payment to one of its suppliers.
There is another set of payments Bonfante Gardens hopes it can miss – property taxes.
The park’s board of directors is appealing the state to relax the amount of property taxes it must pay. As a non-profit entity, Bonfante Gardens can have some of its roughly $400,000 property tax bill waived.
The board is asking the state waive a larger amount than what it had initially approved. The state made certain parcels on the park tax exempt if educational uses were housed there, but park officials believe more acreage qualifies.
“The biggest hurdle is that it is an amusement park and the state has to define a fine line between what is amusement and what is educational,” Pinheiro said. “We’ve been going piece by piece hoping they ultimately see it our way.”
Pinheiro, a Gilroy Councilman, got fellow City Council members to approve a letter of support that will be sent to the state, asking for the property tax amount to be lowered. Kraemer broached the topic at a school board meeting earlier this week, but the topic needs to be placed on a future agenda.
