Supreme Court Won’t Expedite Sale of 11 State Buildings

This item by David Siders of the Sacramento Bee was posted on December 28, 2010:

The California Supreme Court rejected Gov. Arnold Schwarzenegger‘s request to lift a stay blocking the sale of state office properties until after he leaves office next week, likely sinking the deal.

Gov.-elect Jerry Brown has been critical of the transaction and, as the state attorney general, declined to defend it in court.

Schwarzenegger and the Legislature last year approved selling 24 buildings on 11 properties to private investors for immediate cash, while promising to lease back the properties for 20 years.

Though the deal was criticized by many observers — the Legislative Analyst’s Office called it the equivalent of borrowing at more than 10 percent interest over 35 years — even Brown acknowledged that the transaction, if nixed, would add some $1.3 billion to the state budget deficit.

Brown’s transition team has said he will review the deal once he takes office.

Three former state building officials sued to block the sale, claiming it an illegal gift of taxpayer funds. Proponents said the sale was adequately reviewed and that the state is in need of immediate cash.

The case is in the 6th District Court of Appeal in San Jose, where oral arguments are scheduled for late January.

The Supreme Court is housed in one of the buildings involved in the proposed sale, and all seven justices have recused themselves from the case. Seven appellate court judges were assigned to act in their place.

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