Judge OKs sale of Calif buildings in early ruling

December 10, 2010 7:08:40 PM PST
Despite some angry opposition, the governor's plan to sell a bunch of state-owned buildings can go forward. ABC7 looks into why the judge made that decision and what happens next.

The California Supreme Court in San Francisco is one of 24 state buildings in the Bay Area, Los Angeles and Sacramento that could be owned privately this Wednesday. A judge said the $2.3 billion sale, then leaseback of those offices, does not violate state law, nor is it an unconstitutional gift of public funds.

"It confirms what we've always known, that the sale/leaseback transaction is valid. We will be moving forward to close the escrow process and complete the sale at this point," says Eric Lamoureux from the California Department of General Services.

About half of the proceeds will be a one-time infusion to the state budget to help shrink the deficit; the other half towards paying off bond debt for those buildings.

"It just doesn't pass the smell test."

Legislative hearings and reports have questioned whether the sale makes sense. In the long run, it'll actually cost taxpayers more to rent back the office space over 35 years, especially since a number of those properties are nearly paid off and state is close to owning them free and clear.

"This was an Unconstitutional -- watch this word -- stealing of taxpayers money," says Joseph Cotchett, the attorney to stop sale. "This is an outrage that these magnificent buildings are being sold for this amount of money."

Besides the cost to taxpayers, the sale also raised questions over the $500,000 finder's fee Santa Ana Mayor Miguel Pulido was in line for if the deal went through, but that has since been cancelled.

"The state of California is not paying a finder's fee to anyone," says Lamoureux.

Don Casper was one of two long-time building authority members Gov. Arnold Schwarzenegger fired for questioning the sale.

Even though he lost this round in court, Casper says it's worth it to keep fighting.

"My voice is now being heard in court and that's gratifying because that's what democracy is all about," says Don Casper, the Fired Building Authority Member," says Casper.

Opponents of the sale are set to file an appeal on Monday. The courts would then have only two days to act to stop everything in its tracks.


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