Quick Take
The Watsonville City Council voted to authorize a lease revenue bond to help address funding gaps for the city’s Ramsay Park and downtown plaza renovation projects. The $12 million bond will be split between the two.
The Watsonville City Council voted unanimously Tuesday to approve raising $12 million in bond money to help pay for the remaining costs for two of the city’s biggest renovation projects, at Ramsay Park and the downtown city plaza.
The city is working on a major overhaul to address outdated features of Ramsay Park, such as making the playground more accessible and inclusive for all children. It’s been 30 years since Watsonville’s largest park has undergone any renovations.
The project is expected to improve the park’s existing soccer field, and convert its softball field into a multiuse sport field. Residents will also get to enjoy a new dog park, which will include seating and two areas for dogs, once the project is complete. Meanwhile, the renovations to the downtown plaza — which have yet to begin — will include upgrading its gazebo and lighting.
The $12 million bond would give the city enough to finish work at Ramsay Park project, said deputy city manager Nick Calubaquib. Renovations on the 26-acre park along Main Street began last year, already totaling $33 million in construction costs. The park will receive $8.5 million of the bond money, said Marissa Duran, administrative services director.
However, Calubaquib noted that the $3.5 of the bond funds allocated to the city plaza project might not be enough to cover all costs. “We’re probably about a million short of doing the entire master plan,” he said. Calubaquib said the city is prioritizing three main elements of the plaza — the gazebo, a new stage and new lighting — when considering bids from contractors for the project.
Both projects are currently funded by a mix of city and state money, federal COVID stimulus funds and money from Measure R, a half-cent sales tax increase approved by Watsonville voters in 2022.
The city will raise the additional $12 million for the projects using what’s known as a lease revenue bond — a type of municipal bond used to help finance the construction of facilities that will be leased to a government entity.
The city’s public finance authority will issue the bonds and enter into a ground lease with the city at the same time, said Wing-See Fox, municipal advisor from Urban Futures, a financial advisory firm for local municipalities. The bond will not result in a tax increase for residents, said Duran.
Under the ground lease, the city will essentially lease out city-owned property unrelated to the renovation projects — in this case, city hall, the Watsonville Youth Center, Parks and Community Services building and the police and information technology building — to the public finance authority, Fox said. The properties serve as collateral for the bond. The authority then leases the property back to the city for semiannual payments, which are used to pay the debt service from the bonds, she said.
City Councilmember Jimmy Dutra expressed concern over whether the $12 million would be enough for both projects. Dutra said he doesn’t want to misinform residents about what new features will be added to the park and plaza, in case the city can not afford the renovations given the rising cost of construction supplies.
“We don’t know how tariffs are going to affect us,” Dutra said.
The city will not be able to borrow any extra money to finish the two projects, if needed, said City Manager Tamara Vides. The $12 million bond is the maximum amount the city can afford at the moment, said Calubaquib.
The city’s financing team will issue a preliminary official statement to potential bond buyers by Monday, and a bond sale is expected to happen around June 10, said Fox. The city is expected to receive the bond money by the end of June.
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