Tag Archives: state buildings

Just Who Are The People Trying to Buy Our State Buildings?

The deal would sell the building that houses the California Supreme Court
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Arnold Schwarzenegger was quite keen to get the sale of buildings through before he left office.  That’s no surprise, considering that Jerry Brown was never really a fan of the deal.  His latest statements have been somewhat ambivalent, essentially saying that he wants 30 days to review the deal before he does anything.

But the deal is now rapidly losing investors, and the Bay Citizen (a website you should be reading), notes that in addition to the shrinking pool of investors, there is also the question of who the investors are that are left paying the up-front costs.  Well, turns out it isn’t that easy to find out:

Most of the members of a shadowy investor group that agreed to finance the sale of tony state office buildings last year appear to have dropped out of the deal, and those that remain are tight-lipped about their involvement in the transaction, which is being challenged in court as an illegal gift of state assets to a group with political pull in Sacramento.

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The identities of the people and companies behind California First LLC have been a mystery. And the increased public scrutiny and court challenges have done little, thus far, to shed light on them. The group declined to participate in the legal battle to close the deal, a stance that Renne finds “extraordinarily unusual. I think, frankly, they cannot stand to see the light of day on their transaction.”

The Bay Citizen reporter continued to follow the trail of money, but ended up with more questions than answers.  People avoided her calls, said they weren’t really helping, merely advising, and generally being unhelpful.  That being said, the three “main partners” in the deal have long history in government and ties to past administrations.

Even if you were to look at this deal from a totally outside perspective, without this information, the deal would look like a bad one.  We aren’t really getting enough money to make this worthwhile.  It’s a short-term fix for a long-term problem. Oh, and it leaves us with a huge pile of debt to deal with over the next generation.  Adding on the mysterious and rather shady nature of this deal, you really have to question Schwarzenegger’s motives for this deal.

We still have a while before we get a decision from Gov. Brown, but one hopes that we can once and fully put this stinker of a deal behind us.

Building Sale is Blocked

Well, and the ball is officially in the Governor (Once and Future) Jerry Brown’s court.  In a brief, one sentence ruling, the California Supreme Court (well, actually some appellate justices sitting in for the Supreme Court), left the stay from the lower court in place.

“The petition for writ of mandate and request for immediate relief from stay are denied.” (Document here

So, Governor Schwarzenegger will now have to see how Jerry Brown feels about this particular gimmick. It is worth pointing out that Brown refused to defend these sales, take of that what you will.

All Supreme Court Justices Recuse Themselves From Building Case

Yesterday I noted that the Supreme Court would likely try to deal quickly with the appeal on the building case, as Schwarzenegger was practically begging for action.  If the 6th district’s stay isn’t overturned shortly, the ball will be in Jerry Brown’s court.  Apparently, Arnold isn’t too down with that, as well, Jerry Brown seemingly opposes the sale.

One problem: the Supreme Court is housed in one of those buildings, and so they have an interest in the litigation.  And under the ethics guidelines, that means that they should recuse themselves from the litigation.  They’ve now done that:

All seven state Supreme Court justices have removed themselves from participation in a lawsuit seeking to block the sale of 11 state buildings. They did not offer a formal reason, but it is safe to assume they did so because their court is housed in the San Francisco Civic Center Complex, one of the properties up for sale.

Because the Supreme Court justices recused themselves, the state will call upon seven appellate court judges to serve in their place, according to Judicial Council spokeswoman Lynn Holton. To select them, the Supreme Court will go down an alphabetical list of judges. That could happen as soon as this week.(SacBee)

Of course, because the 1st and 3rd districts are also housed in the buildings, the pool of judges is a bit thinner than otherwise would be the case.  With all this wrangling, Arnold is rapidly running out of time for his little corporate endeavor here.

Also in that SacBee article was the fact that Schwarzenegger has just named the San Francisco Civic Center the “Ron George Civic Center.”  You’d think that he would confer with the city, but no dice. The whole complex, mind you, not just one building. But lest you be worried, the deal requires the new owners to retain the names of all of the facilities.

Schwarzenegger is Desperate to Get His Gimmicky Giveaways

Arnold Schwarzenegger has been pressing pretty hard for the sale (and subsequent lease-back) of state buildings.  He thinks it nets us $1.2 Bn in short term dollars, and that’s true.  But long term? Well, the other side is a business, so they understand that it is a long-term win for the corporate interests financing this little ploy.  So, needless to say, Schwarzenegger was miffed when the California Court of Appeal, Sixth Appellate District blocked the sale from going forward.

Well, the administration has now filed an appeal, and clearly they are worried that Governor Elect Brown will not be nearly as interested in this gimmick:

Schwarzenegger’s attorneys, in a legal brief filed Monday, asked the high court to step in “because time is of the essence and the transaction must close by year end or probably be lost forever.”

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The state Legislature approved the sale in 2009, and Schwarzenegger has vigorously pursued it since.

“For those who say that California is ungovernable, this litigation should serve as Exhibit A,” Schwarzenegger’s lawyers wrote. “This court must act now to prevent this abuse of the legal process by those who put their own petty grievances above the will of the people and the needs of this state.” (LA Times)

If the Supreme Court does not remove the stay from the appellate court, the sale will have to be ultimately concluded by the Brown administration. Brown has previously declined to defend the actions in court, so he’s obviously not a big fan of the plan.  As to whether he wants to dig out another $1.3 billion of debt, well that’s a good question.  However, Brown now seems inclined to stare headlong into the abyss of the budget, and completing this sale seems pretty much the opposite of that.

Expect a ruling from the CA Supreme Court very soon.

Court Blocks State Building Sale Pending Appeal

Last week, a state court judge said the sale of state buildings could proceed as scheduled.  

Today, however, that sale has been postponed as the California Court of Appeal, Sixth Appellate District, has issued an Order staying the sale of eleven state-owned office complexes to a private investment consortium — California First.  The Court of Appeal has invited the parties to submit briefs prior to the end of the year.  Today’s order means that the Schwarzenegger Administration can no longer move forward with the sale of the properties, which was slated to close on December 15, 2010.

Looks like the sale of the state buildings is just one more ball that landed in Jerry Brown’s court.  We’ll see what he does with it.

Judge: State Building Sale Can Proceed

From CapitolAlert, here’s the latest on the sale of the state buildings:

Superior Court Judge Charlotte Woolard rejected a bid for a temporary restraining order by two former building officials who claimed the sale is illegal and a waste of taxpayer money.

Opponents of the sale said they will appeal the decision Monday, hoping to block escrow from closing Wednesday.

Gov. Arnold Schwarzenegger and the Legislature last year approved selling properties statewide to raise money in the budget crisis, netting about $1.3 billion. Andrew W. Stroud, a lawyer representing Schwarzenegger, said lawmakers appropriately approved the transaction.(SacBee)

The leaseback program is going to be a big net cost for the state, after all, it has to be for somebody to pay $1.3 billion for it.  Frankly, the privatization of our state facilities is just a bad idea, in the short and long term.  It’s a result of our failed political system to reach any sort of budget agreement that can be achieved without a slew of gimmicks.

Jerry Brown hasn’t officially said whether he supports the sale of the buildings, but this just might drag on to his term if attorneys for the opponents of the sale can get a stay before next Wednesday.  We’ll keep an eye on this case.