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Judge OKs sale of Calif. state buildings

December 11, 2010 12:00:00 AM PST
The impending sale of two dozen California state buildings will help shrink the state's massive deficit, but some are outraged over the decision.The California Supreme Court building in San Francisco is one of the many buildings in the Bay Area, Los Angeles and Sacramento that could be owned privately this Wednesday.

A judge said the $2.3 billion sale and then the 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," said Eric Lamoureux of the California Department of General Services. "We will be moving forward to close the escrow process and complete the sale at this point."

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

Legislative hearings and reports have questioned whether the sale makes sense.

In the long run, it'll actually costs 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," said Joseph Cotchett, an attorney to stop the 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 question 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," Lamoureux said.

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 said it's worth it to keep fighting.

"My voice is now being heard in court, and that's gratifying," Casper said. "That's what democracy is all about."

Opponents of the sale are set to file an appeal Monday. The court will then have only two days to stop the transaction in its tracks."


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