Gilroy Halts Sharks Ice Rink Project Due to Financial Viability

Gilroy city officials have determined that a proposed multi-million-dollar Sharks Ice recreation facility at the Gilroy Sports Park is economically unviable, ending seven and a half years of discussions led by Sharks Sports & Entertainment, sanjosespotlight.com reported.

Unanimous Council Vote Halts Project

The Gilroy City Council voted unanimously last month to approve the findings of a special ad hoc committee, concluding that the ice skating facility proposed for the local sports park lacks economic viability. The project originally envisioned a 100,000-square-foot facility featuring two ice sheets, a restaurant, a cafe, and a specialized retail shop across roughly 9.1 acres of parkland.

City representatives and Sharks Sports & Entertainment have left the door open for a potential reconsideration if financial conditions shift. “Tamar la ciudad de Gilroy como Sharks Sports & Entertainment siguen interesados en llevar adelante el proyecto si las condiciones financieras cambian o si surgen otros socios,” city spokesperson Rachelle Bedell told sanjosespotlight.com. Yet, no financially viable option currently exists.

Mounting Costs and Funding Deficits

The ad hoc committee, comprising Councilmembers Zach Hilton, Terence Fugazzi, and Tom Cline, formed in August 2025 to evaluate whether the project could be salvaged. The committee reported to the council on Oct. 5 that initial estimates had been outpaced by steep construction inflation and an inability to fully fund the facility’s projected net operating income to service the necessary debt.

Negotiations between the city and Sharks Sports & Entertainment began in May 2019, followed by an operational terms agreement approved by council members in June 2022. Initial designs carried a $64 million price tag for a smaller footprint, while a larger installation was estimated at $84 million. With the city’s borrowing capacity capped at $49 million, officials faced a $15 million funding gap for the smaller design and a $35 million deficit for the larger version.

An additional $10 million in municipal spending would have been required for utilities, site and street improvements, and related infrastructure. Gilroy has already spent more than $1 million in predevelopment expenses.

Councilmember Zach Hilton told sanjosespotlight.com that they spent a year exploring all options to cover the funding deficit, including proposals from Sharks partners. He stated that the Sharks did not want to build facilities they would not feel proud of, and that residents had repeatedly told him they were not interested in spending or issuing bonds with city money to cover the deficit.

Local Support Cools for South County Growth Market

The Bay Area currently hosts three Sharks training facilities, including the main practice hub in San Jose, along with locations in Fremont and the Oakland Ice Center. Sharks representatives continue to view South County as a strategic growth market.

While community enthusiasm initially accompanied the arrival of a professional sports brand, local support cooled over time. No residents spoke either for or against the project during the recent council meeting. Reid Lerner, a Gilroy resident, architect, and former planning commissioner, told sanjosespotlight.com that the city was right to halt the undertaking.

Lerner told sanjosespotlight.com that the Sharks Ice rink was a bad deal for the city and the environment, adding that the city had already spent too much money on the burden.