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By Tim Hunt

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About this blog: I am a native of Alameda County, grew up in Pleasanton and currently live in the house I grew up in that is more than 100 years old. I spent 39 years in the daily newspaper business and wrote a column for more than 25 years in add...  (More)

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Can the governor hold the line on spending?

Uploaded: Jan 23, 2014
Gov. Jerry Brown delivered a State of the State address Wednesday that was full of optimism and accomplishments.
Some of it rang true—the non-partisan Legislative Analysts Office forecasts that the state—if it controls spending—will run a surplus over the next several years. The office points out that revenue are soaring—predictably in the boom-and-bust cycles that are typical with California's taxes so dependent on personal income taxes. The source of the money is capital gains from the soaring stock market plus the Prop. 30 tax increase that the governor convinced voters to approve. The improved economy in certain regions (much of the Bay Area) also contributed significantly. Overall, the general fund proposal is up 8.5 percent-how is your income doing?
The governor's $106.7 billion budget plans to repay debt—an excellent move—although it's a win-win politically for him. The biggest debt repayment will go to schools, $6.2 billion in previously deferred income. Next year will be a good one to be a school employee after several very dry years.
There is still substantial debt to be repaid as well as huge unfunded liabilities for pensions ($100 billion—the proposed budget is $106 billion) as well as billions in liabilities for retiree's health care and an estimated $65 billion in infrastructure.
To his credit, the governor proposes a rainy day fund of $1.6 billion. It's better that nothing, but nearly a drop in the bucket. State law requires school districts to maintain a 3 percent reserve annually—applying that to the state would mean $4.8 billion.
Sadly, the governor continues to advocate the absurdly expensive and totally unnecessary high-speed rail with a budget allocation of $250 million from the state's cap-and-trade climate change auction fund. Perhaps, it is better that I say the train connecting no-where to no-where in the San Joaquin Valley. Here's hoping that the judge's decision that the state cannot spend any more money on the giant boondoggle holds.







Sunset Development Co., developer and owner of much of Bishop Ranch, made a bold move this week when it purchased the AT&T Regional headquarters back from the telecom giant. Sunset partnered with MetLife for the $250 million deal for the 1.8 million square-foot complex.
Sunset originally sold the land to Pacific Bell more than 30 years ago and the phone company built the largest single structure west of the Mississippi River. The Sunset-AT&T deal calls for the telecom to lease back 800,000 square feet, while Sunset will refurbish and then market the other 1 million square feet.
Given the architecture with wings of about 500,000-square-feet, Sunset will be able to accommodate very larger users. There are very few of those currently in the East Bay market.
Sunset President Alex Mehran Jr. said that the refurbished office space coupled with the 500,000-square-foot City Center retail and residential project across Camino Ramon could make for a very desirable location for the right companies.
He also said in the San Francisco Business Times that it is part of the broader strategy to urbanize a suburban business park.
It leaves Sunset with an immense amount of space to lease. You wonder if there aren't potential tenants waiting in the wings to hedge the huge investment.

Comments

Posted by conserve, a resident of Another Pleasanton neighborhood,
on Jan 23, 2014 at 8:51 am

It is good news for California. Hope Brown can hold the line. Hard times ahead with drought. Still good news.


Posted by Roz Rogoff, the San Ramon Observer,
on Jan 25, 2014 at 2:43 am

Roz Rogoff is a registered user.

Tim,

You and I both know Alex Mehran is very savvy about these things. I would guess he has some potential tenants lined up already. When the economy was downsizing, Bishop Ranch downsized -- offering small office suites for small businesses and new startups. Now that the economy is expanding around here, so are the suites in Bishop Ranch. Mehran knows how to play the accordion.

Roz


Posted by spcwt, a resident of Danville,
on Jan 27, 2014 at 4:21 pm

California's government is in much worse shape than Tim's article indicates. The combined debt of California's state and local governments is at least $848 billion and could escalate past $1.1 trillion.Web Link

Sacramento uses accounting gimmicks to mask the severity of California's financial woes. For example, California will spend $15.7 billion on executive salaries this year, but less than half of that will come from the state's general fund. To mask the size of the deficit, the budget uses $8 billion in "special funds" to pay those salaries.

California prison guards are paid twice as much as the national average. Mandatory minimum sentencing enacted by Gov. Brown in the 1970's ensures an ample amount of prison guard jobs.

Web Link


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