Gilroy Council Cancels Proposed $64M Sharks Ice Facility After 7 Years

After 7.5 years of planning and more than $1 million in predevelopment expenditures, the Gilroy City Council voted unanimously last week to cancel its proposed Sharks Ice complex with Sharks Sports & Entertainment, according to San José Spotlight reporter Lorraine Gabbert.

$15 Million to $35 Million Gap Above Gilroy's $49 Million Borrowing Capacity

First proposed in May 2019 as a regional sports tourism anchor on 9.1 acres at Gilroy Sports Park, the 100,000-square-foot facility was designed to feature 2 National Hockey League-sized indoor ice rinks, 1 covered outdoor roller hockey rink, a restaurant, and a pro shop:

• Ad Hoc Committee Financial Review: Under the original framework, the city of Gilroy would issue municipal lease revenue bonds to build the complex and Sharks Ice LLC would lease and operate it. However, an ad hoc council committee comprising Councilmembers Zach Hilton, Terence Fugazzi, and Tom Cline reported that post-pandemic construction inflation pushed the full project estimate to $84 million and a value-engineered version to $64 million.
• Unfunded $10 Million Infrastructure Costs: Because projected lease payments could support at most $49 million in city bond borrowing, Gilroy faced a $15 million shortfall on the $64 million design and a $35 million shortfall on the $84 million design—before accounting for another $10 million in required off-site street, water, and sewer infrastructure upgrades. Councilmembers voted unanimously to end the agreement and explore lower-cost multi-use athletic fields for the 9.1-acre park site.