Stopping State Asset-Stripping

And no, this time I’m not talking about TSA scanners. Instead I’m talking about the wasteful and very costly plan to raise money for the state budget by selling off state-owned office buildings, including the State Building in San Francisco seen at right. The State of California saves a lot of money by owning its own office space, but like a junkie looking for a quick buck and deciding to sell their car rather than get a job and generate new income, the state is going to sell it and ten other buildings in the hopes of raising $1.2 billion.

After a state board controlled by Governor Arnold Schwarzenegger’s appointees ruled in favor of the sale on Monday, two former officials fired by the governor for objecting to the sale sued on Tuesday to block it:

The lawsuit claims the sale to a group of private investors, due to be completed in mid-December, is illegal and unconstitutional. It alleges the sale will cost taxpayers at least millions and possibly a billion dollars….

Their lawsuit has two legal claims.

First, it alleges the sale of two court buildings violates a law giving the California Judicial Council authority and control over state appeals court facilities….

The second claim is that the sale amounts to an unconstitutional gift of public funds.

Treasurer Bill Lockyer has opposed the plan, and today delayed the sale of state bonds because of the uncertainty caused by the suite:

Because the lawsuit came after the state advised investors of the known risks – and in the midst of this week’s bond sale – the Treasurer’s Office had to add a supplemental disclosure today and give investors the opportunity to rescind purchases made Monday and Tuesday….

“If this lawsuit succeeds in creating a $1.2 billion hole in the budget, the state is still going to have ample cash to repay the (bonds) on time and in full,” Lockyer spokesman Tom Dresslar said. “And if the legal challenge is successful, it will give the governor and the Legislature an opportunity to adopt a smarter approach to come up with that money.”

Lockyer sold 59% of the bonds that were offered on Monday and Tuesday, and there’s no reason to believe purchases will be rescinded or that future sales will be hurt – despite what some foolish market analysts claim, California is not at risk of default.

Instead California would be taking a step to securing its finances by keeping these buildings. Selling them and then renting the space would be a waste of money, costing more in the long run than it would save in the short term – and thereby weakening state finances.

Let’s hope this suit is successful and that Jerry Brown moves to stop the sale when he is inaugurated in January.

(Flickr image by wallyg)

6 thoughts on “Stopping State Asset-Stripping”

  1. State Buildings in SF were not constructed to SF’s far stricter building and planning codes. The 455 Golden Gate property is a huge block building with inadequate sidewalk width compared to new construction and avoids all the codes that were set in place to avoid “canyoning”. As a result, the area around this building is incredibly windy in the late afternoon.

    In addition, the accessibility features of this complex leave a lot to be desired, which is odd since the Department of Workers Compensation is located there with many visitors with mobility issues.

  2. This is a Fitting Legacy for Arnold Schwartzenegger

    Another gimmick that will leave Californians Holding the Bag

    But, my rep Mark Leno (D-SF) seems OKK with this

    He dosen’t want to make hard decisions about budget cuts

    He won’t get my vote for anything any more

  3. Thank you for your coverage of this important issue.  I hope you continue to follow the status of this sale and its related lawsuit.  I have been following this robbery-in-plain-sight for the past year and have been frustrated by the seeming lack of interest by the press, public and legislature about just how stupid this deal is for California.  I’ve called both my representatives and they both seem to be oblivious to the implications of the impeding sale.  Please keep following the progress of this sale and its related lawsuit.


    Can Governor Brown stop this sale when he takes office?

    What is the status of the lawsuit and when are hearings scheduled?

    What can individual legislators do to stop this sale?

    What can Californians do to protect these and other assets from plunder?

    How important is this assets sale to the budget?

Comments are closed.