The sale of California state office buildings has been blocked by the 6th District Court of Appeal until January 23, 2011. Last week, Gov. Schwarzenegger asked the California Supreme Court to force the sale, citing that the deal wouldn't get done unless it was completed before he left office on January 3, 2011. The California Supreme Court recused themselves en banc and the case went to a lower court for a hearing. Read the brief here. Download SupremeCourtFilingDec21
The sale has been controversial from the start. The Legislative Analyst's Office wrote two reports (Evaluating the Sale-Leaseback Proposal: Should the State Sell Its Office Buildings? and Sale Leaseback of State Office Buildings) which concluded that the sale of the office buildings in daily use by State employees would cost the taxpayers money in the long term.
In March 2010, Jerry Epstein and Rusty Doms (Los Angeles State Building Authority) and Stan Moy and Don Casper of the San Francisco State Building Authority were dismissed from the committee after opposing the sale of the office buildings. Epstein and Doms later filed suit to stop the sale alleging harm to taxpayers.
The winning bidder for the buildings, California First LLC, was controversial. Partners are reported to include Richard Mayo (a appointee for former Gov. Pete Wilson whose job it was to sell off state property) and Mumbai real estate investor Chandra R. Patel. The other partners in the real estate deal have not been identified. At one time, Santa Ana Mayor Miguel Pulido claimed to be eligible to receive $500,000 if the deal closed. Pulido has since backed off that claim.
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