Bad Deal for State Involves a UC Regent
[Note: If you have trouble using the link above directly, simply go back to the December 3, 2010 entries for this blog.]
Since the prior post went into the reasons why the deal – which is essentially a complicated way of borrowing at very high cost – is (to say the least) questionable, I will not repeat the analysis here. However, questions about the merit of the transaction have been raised by the Legislative Analyst, the state controller, and the state treasurer. Various officials were essentially fired from their positions for objecting to the deal. Governor-elect Jerry Brown has asked outgoing Governor Schwarzenegger to delay the sale until he takes over in early January. As attorney general, Brown has refused to defend the sale in court.
As the article below indicates, opponents of the sale have just lost a round in court. They say they will appeal. However, the sale will occur next week.
Judge OKs sale of state buildings
Dec. 11, 2010, Sacramento Bee, David Siders
SAN FRANCISCO – The sale of 11 state office properties to a group of private investors may proceed, a judge ruled Friday. San Francisco Superior Court Judge Charlotte Woolard rejected a bid for an injunction by two former building officials seeking to block the sale. They claimed it is illegal and a waste of taxpayer money. Their lawyer, Joseph Cotchett, said he will appeal the decision Monday to the 1st District Court of Appeal. Escrow is scheduled to close two days later. The ruling was a victory for Gov. Arnold Schwarzenegger, who with the Legislature last year approved the sale of 24 buildings on 11 properties statewide to raise money in the budget crisis, netting about $1.3 billion…
Los Angeles businessmen Jerry Epstein and Rusty Doms said Schwarzenegger dismissed them from the Los Angeles State Building Authority after they questioned the transaction. They claimed the sale is illegal because it lacks approval by the state Judicial Council. Two of the properties house court facilities, and lawyer Mary Maloney Roberts, a lawyer for the Judicial Council, said the council was not consulted in any meaningful way. She asked for more time to review it. Woolard ruled the Judicial Council does not own the buildings and that its approval was not required. Another former building official, Donald Casper, said he was dismissed from the San Francisco State Building Authority after he, like Epstein and Doms, raised concerns about the sale. The buildings are historic and cultural resources, he said…
The Legislative Analyst's Office said selling the buildings and leasing them back will amount to paying 10.2 percent interest on the $1.3 billion in immediate cash…
Full article at http://www.sacbee.com/2010/12/11/3249757/judge-oks-sale-of-state-buildings.html
We'll give you a different version of the song from the prior post below:
FURTHER UPDATE HAS THE DEAL BLOCKED BY A LATER DECISION: http://blogs.sacbee.com/capitolalertlatest/2010/12/state-building-sale-blocked.html
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