Posted on 12/25/2002 11:27:30 AM PST by patton
SACRAMENTO - State officials digging for ways to close a stunning budget deficit acknowledged Thursday that they have uncovered a potential gold mine - sale of surplus state land.
The idea of paring a property inventory that equals the size of Los Angeles County - resurrected from the fiscal crisis of a decade ago - is sure to stir up everyone from environmentalists to the real estate sector, officials conceded in interviews with ANG Newspapers.
But the state's efficiency watchdog agency says the effort could be worth hundreds of millions of dollars, especially considering the value of land or buildings that might be deemed surplus in the Bay Area and Southern California.
A state department charged with compiling an inventory of state properties is working to update its list before the end of the year, although few of those properties are expected to be identified as surplus because of bureaucratic obstacles and an absence of incentives.
The watchdog agency - the Little Hoover Commission - also has long recommended improving state property management through negotiation, for instance, of more lease-purchase agreements and long-term leases. Other alternatives include selling state buildings, then leasing them back.
The state, with an annual budget of less than $100 billion, is scrambling to erase a $34.8 billion deficit over the next 18 months, mostly with spending cuts and likely tax hikes. Gov. Gray Davis is scheduled to unveil the bulk of his plan to close the gap Jan. 10.
"We obviously have to look everywhere we can to solve this problem," the Democratic governor said Thursday during a Capitol interview. But he refused to preview his proposals.
Asked specifically about surplus-land sales, Anita Gore, a spokeswoman for Davis' Finance Department, said, "Everything is on the table. Nothing has been ruled out."
The Legislature will consider Davis' proposed budget but also ponder its own courses of action, especially as majority Democrats clash with Republicans, whose votes are needed to pass a spending plan.
"With everything on the table, that includes sale of surplus property," said Chris Woods, the chief consultant to the Assembly Budget Committee. "That will be evaluated and looked at closely."
"There's valuable property out there. Some prudent sale of property would probably make a lot of sense," Woods said.
The state owns 2,000 individual properties that total more than 2.5 million acres, according to records at the Department of General Services. The state also owns more than 19,100 buildings with more than 183 million square feet of space - the equivalent of 18 New York City's former World Trade Centers.
"The parcels reflect the diversity of the Golden State - windy hillsides populated by oaks and acorn woodpeckers, rocky cliffs pounded by the Pacific surf, rectangles of downtown San Francisco and Los Angeles valued by the square foot, sprawling suburban university campuses and patch-worked farm fields," says a Little Hoover Commission report.
The study, prepared during the budget crisis of the early 1990s, said some of the property was under-used or unneeded altogether. Statewide examples included land purchased by Caltrans for freeways that have never been built, as well as office buildings, prisons and state hospitals.
Among potential properties the commission report identified were San Quentin prison in Marin County and Folsom Prison in Sacramento County. San Quentin is more than 400 acres and Folsom is more than 1,200 acres, and both are in prime real estate markets.
"Everyone's looking at this (sale of surplus property) again now because we're trying to find every nickel that we can find," said James Mayer, executive director of the Little Hoover Commission.
"If there's one piece of property out there that could be better put to use at this point and provide health care for a poor kid, it's a pot of gold," Mayer said.
But there has been little incentive by the scores of departments that own land and buildings to declare any of it surplus since proceeds from sales go into the state's general operating fund, he said.
Proposals to allow departments to keep part of the proceeds have been unpopular with legislators, who want to retain fiscal control over the bureaucracy.
In citing frustrations, the Little Hoover Commission reported that agencies also were "reluctant to relinquish control of their fiefdoms."
It concluded a decade ago, during a much smaller deficit crisis, that "substantive reform is doomed to be bogged down in a political quagmire."
The idea of selling state offices, though, and then renting them back is idiotic. Not that they don't have too much, they do - but again, this scheme is just another way of stealing from their kids.
They are talking about raising 100's of millions (less than a billion?).
The resultant increase in tax revenues would be a small help, but it would be offset by the new lease expenses.
This is nothing more than using capital (savings) to pay normal living expenses, sorta like refi the house to buy new cars and other goodies and vacations.
At some point they are going to have to reduce the financial demand of the state government.
In California, LOL. One can only hope.
Sure, you can buy the land, BUT...
1) The State will retain all rights pertaining to said property, even if you get some kind of paperwork assuring you otherwise, they'll find a way to get it back.
2) The EPA will prevent you from any development/improvement of said property, because of the endangered left-testicled Yemeni Fruit Fly they found on your property (a la the Lynx fur fraud that was perpetrated recently).
3) The State will then Tax you at a greater rate on an undevelopable parcel that they will claim rights on...and demand you pay some sort of "retro" tax they will come up with in the future.
All the while you will be accused of "destroying the Environment", and if you complain, you will be called "unfair" and "greedy". Then when the illegals from Mexico make their dream of "Aztlan" come true, you will be out money, time, AND the property!
My suggestion...they are hell bent on bankruptcy now...why bail them out at THEIR rates, when "distresses owner" sales are so much more buyer friendly, and probably will accompany a Tax-Revolt of staggering proportions!
That's not sarcasm (anymore).
I wonder if there's a way to take advantage of govt. deficits and get this land back into private ownership. The Utah Escalante oil lands, for example.
If anybody still owns property in California, this is the time to sell.
California Gov't has a problem with spending too much. Let that be known.
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