Resolution 2008-03
RESOLUTION NO. 2008-03
RESOLUTION AUTHORIZING EXECUTION OF (A)
PURCHASE AND SALE AGREEMENT BETWEEN CITY
AND GILROY GARDENS FAMILY THEME PARK, INC.
("GILROY GARDENS") FOR PURCHASE OF PROPERTY;
(B) SINGLE TENANT LEASE TO LEASE BACK THE
PROPERTY TO GILROY GARDENS FOR
APPROXIMATELY TWO YEARS; (C) BOND PURCHASE
AND SALE AGREEMENT TO PURCHASE BONDS FROM
INSTITUTIONAL INVESTOR; (D)ESCROW AGREEMENT
FOR BOND DEFEASANCE; (E) ESCROW INSTRUCTIONS
FOR CLOSING THE ACQUISITION; AND (F) OTHER
DOCUMENTS REQUIRED TO PURCHASE AND DEFEASE
THE BONDS AND TO CONCLUDE THE ACQUISITION;
AND APPROVING UPDATE TO FINANCING PLAN
PREVIOUSLY ADOPTED ON DECEMBER 17, 2007
(INCLUDING APPROVAL OF INTERFUND LOANS) AND
AUTHORIZATION TO EXPEND MONIES FOR THE
PURCHASE PRICE AND COSTS AND EXPENSES
NECESSARY TO CARRY OUT THE TRANSACTION
WHEREAS, Gilroy Gardens Family Theme Park, Inc. intends to sell to the City of Gilroy,
and the City of Gilroy intends to purchase from Gilroy Gardens Family Theme Park, Inc., that
certain real property in the City of Gilroy described in Exhibit "A" attached to the Purchase and
Sale Agreement as hereafter referenced, including APNs 783-05-011, -013, and -012,810-17-026,
and -029,810-17-014, -015, -021, -024 and -025,810-18-010 and -011, a portion of which contains
the horticultural education and theme park known as Gilroy Gardens, and including certain related
personal property and intangibles (collectively, the "Property"); and
WHEREAS, the City of Gilroy intends to lease and license the Property back to Gilroy
Gardens Family Theme Park, Inc.; and
WHEREAS, the City Council conducted a public study session on July 11, 2007 concerning
the City's potential acquisition of the Property, at which time the City Council directed City staffto
develop a term sheet covering the major points of the potential acquisition; and
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WHEREAS, the City Council held a duly noticed public meeting on August 6, 2007, at
which time the City Council was presented with and approved the term sheet for the acquisition of
the Property and, further, the City Council directed City staff to begin the due diligence process and
commence negotiations for the City's acquisition of the Property;
WHEREAS, the City Council held a duly noticed public meeting on December 17,2007, at
which time the City Council considered the December 8, 2007 memorandum from the Assistant
City Administrator and the December 8, 2007 memorandum from the Co-Finance Director, and
approved a financing plan and general conceptual terms for the City's purchase and lease back of
the Property (the "Project"); and
WHEREAS, City staff and Gilroy Gardens Family Theme Park, Inc. have agreed to the
terms of a purchase agreement and a lease agreement; and
WHEREAS, under the terms of the purchase agreement, the purchase price will include the
amount necessary to defease and discharge the outstanding revenue bonds issued against and
secured by the Property; and
WHEREAS, City staff have recommended that the City lease and license back the Property
to Gilroy Gardens Family Theme Park, Inc. for a period of approximately two years; and
WHEREAS, City staff have recommended funding the acquisition of the Property through
the use of interfund loans and have prepared an update to the financing plan approved on December
17,2007 to cover such interfund loans as necessary in an amount of up to approximately Fourteen
Million Dollars for the purchase price and costs and expenses necessary to carry out the transaction.
This includes purchase of bonds from the institutional investor and possibly other bond holders,
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funding an escrow for the defeasance of any outstanding bonds, and paying professional, legal and
consulting fees and all costs incident to the transaction; and
WHEREAS, a draft Purchase and Sale Agreement for the acquisition of the Property, a draft
Escrow Agreement, and a draft Single Tenant Lease were presented to the City Council and made
available to the public prior to a study session of the City Council held on January 14, 2008, and
revised drafts of these documents were presented to the City Council and made available to the
public prior to or at the duly noticed meeting of the City Council held on January 22, 2008, along
with a draft Bond Purchase and Sale Agreement; and
WHEREAS, the California Environmental Quality Act ("CEQA") provides a categorical
exemption for existing facilities pursuant to section 15301 of the CEQA Guidelines, which applies
to the Project for the following reasons: the City's acquisition of the Property will involve only the
operation and maintenance of existing facilities, topographical features, existing landscaping and
native growth, and will involve no or negligible expansion of use; the City's lease back of the
Property constitutes the leasing of existing facilities to the present owner, involves no changes in
management and negligible or no expansion of use beyond current uses; master planning for any
changes in use and/or development of the Property will take at least two years to complete and no
expansion of existing uses of either the Gilroy Gardens theme park or the remaining portion of the
Property are currently planned; and, finally, under section 15004(b) of the CEQA Guidelines,
environmental review of the City's acquisition of the Property would be premature because there
are no potential or proposed development projects for the Property that have evolved enough to
provide meaningful information for environmental assessment; and
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WHEREAS, none of the exceptions to the CEQA exemptions, as set forth in section
15300.2 of the CEQA Guidelines, apply to the Project because: the cumulative impact of successive
projects of the same type in the same place over time is insignificant; there is no reasonable
possibility that the Project will have a significant effect on the environment due to unusual
circumstances; the Project will not result in damage to scenic resources; the Property is not a
hazardous waste site or otherwise included on any list compiled pursuant to section 65962.5 of the
Government Code; and the Project will not cause a substantial adverse change in the significance of
any historical resource.
NOW, THEREFORE, BE IT RESOLVED THAT:
1. The Interim City Administrator is authorized to execute, on behalf of the
City, the following documents (in substantial conformance to those draft documents
presented to the City Council at or prior to its meeting of January 22, 2008): (A) Purchase
and Sale Agreement between City and Gilroy Gardens Family Theme Park, Inc. ("Gilroy
Gardens) for purchase of Property; (B) Single Tenant Lease to lease and license back the
Property to Gilroy Gardens for approximately two years; (C) Bond Purchase and Sale
Agreement to purchase bonds from institutional investor; (D) Escrow Agreement for bond
defeasance; (E) escrow instructions for closing the acquisition; and (E) other documents
required to purchase and defease the bonds and to conclude the Acquisition;
2. Staff is authorized to implement the interfund loan transactions contemplated
in the Update to Financing Plan previously adopted on December 17,2007 and to expend up
to approximately Fourteen Million Dollars for the purchase price and costs and expenses
necessary to carry out the transaction. This includes purchase of bonds from the institutional
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investor and possibly other bond holders, funding an escrow for the defeasance of any
outstanding bonds, and paying professional, legal and consulting fees and all costs incident
to the transaction; and
3. For the reasons stated above, the Project is hereby found to be an exempt
project under the California Environmental Quality Act pursuant to section 15301 of the
CEQA Guidelines and not subject to any of the exemption exceptions set forth in section
15300.2 of the CEQA Guidelines.
PASSED AND ADOPTED this 22nd day of January, 2008, by the following vote:
AYES: COUNCILMEMBERS:
ARELLANO, BRACCO, DILLON, GARTMAN,
TUCKER, WOODWARD, and PINHEIRO
NOES: COUNCILMEMBERS:
NONE
ABSENT: COUNCILMEMBERS: NONE
APPROVED:
/-)
(
A*ES~/
X
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I, SHA WNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Resolution No. 2008-03 is an original resolution, or true and correct copy of a city
resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council
held on the 220d day of January, 2008, at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the City of Gilroy this 8th day of February, 2008.
Freels, CMC
erk of the City of Gilroy
(Seal)