Free Republic

Gov. Jerry Brown pulled the plug last month on selling 11 state office properties to raise $1.2 billion in cash, but the investor group in line to buy the buildings has fired back this week with a lawsuit asking for the deal to proceed. California First LP announced today that it filed a lawsuit in Los Angeles Superior Court asserting that the state failed to meet its contractual obligations when Brown halted the building sale. The group said that California, under Gov. Arnold Schwarzenegger, had committed to sell the buildings and was required to follow through. It is asking for...

More notes on Gov. Jerry Brown's decision today to end the state sale of 11 office properties to private investors: • The deficit grows from $25.4 billion to $26.6 billion, as Brown foresaw in a previous press release. By eliminating the sale, the state will not receive a onetime infusion of $1.2 billion, so that amount gets tacked on to the previous deficit total. • Brown's proposal nearly doubles the amount of internal borrowing from special funds. His previous proposal relied on $1 billion in internal borrowing; the new plan takes that up to $1.8 billion. The governor also relies...

Sacramento -- California will not go through with its controversial plan to sell state buildings then lease them back to help plug the budget deficit, Gov. Jerry Brown announced this morning. The proposed sale of the California Supreme Court headquarters in San Francisco and ten other buildings would have raised $1.2 billion for the state but critics argued that the state ultimately would have lost $1.4 billion by leasing back those buildings over a 35 year period."The sale of the buildings really didn't make much sense,"...

The California Supreme Court on Tuesday 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. 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.

As Gov. Arnold Schwarzenegger prepares to decamp from Sacramento on Jan. 3, he has displayed zealous determination to complete what critics say will be among the worst deals the state has ever made: the sale of 11 premier state office complexes to a group of politically connected private investors. ...California would pocket about $1.3 billion after debt is paid off, but would then be a tenant in the same buildings. According to the nonpartisan Legislative Analyst’s Office, the deal would cost taxpayers $6 billion over 35 years. ....Two prominent Bay Area lawyers sued to halt the sale, and the state...

According to state records, one of the investors in California’s $2.3 billion sale of 11 state office buildings is a Newport Beach company founded and run, until 2008, by Hadi Makarechian, a contributor of more than $314,000 to Gov. Arnold Schwarzenegger since 2003 and nearly $175,000 to ballot measures backed by the GOP governor. Makarechian, 62, a long-time real estate developer and investor, was appointed by the GOP governor as a University of California regent in 2008. ... Makarechian was traveling and unavailable, his office said. Kern said Makarechian was still an owner and officer of the company. In his...

The plan to sell California state office buildings contained in this year's budget will cost taxpayers $1.4 billion over 35 years, the nonpartisan legislative analyst said Wednesday. The analysis released this week says the state will pay an effective interest rate of 10.2 percent to lease back the parcels, which include 24 separate buildings, from the new owner. That is about double what the state pays on existing bonds used to build its offices. "There are long-run costs and short-term benefits," said Mark Whitaker, who wrote the 12-page analysis for the Joint Legislative Budget Committee. "It's going to cost a...

The state announced Monday it is selling 24 government office buildings — including the Ronald Reagan State Building in Los Angeles and the San Francisco Civic Center — to a group of private investors for $2.3 billion.