Pleasanton Weekly

News - December 31, 2010

Schwarzenegger plan to sell state buildings delayed

Unless state Supreme Court rules otherwise, Brown will be governor when case is heard

by Jeb Bing

A California appeals court in San Jose has set a Jan. 26 hearing on the disputed $2.3 billion sale of 11 state buildings and blocked the sale of the buildings for the time being.

A three-judge panel said a temporary stay to block the sale of the buildings that it issued on Dec. 13 "shall remain in effect until further order of this court."

If the stay is continued -- and is not overturned by the California Supreme Court -- it would take the sale out of the hands of Gov. Arnold Schwarzenegger's administration and place it into the hands of incoming Gov. Jerry Brown, who takes office Jan. 3.

But Schwarzenegger filed an emergency appeal with the California Supreme Court last week, asking it to lift the stay before the end of the year.

In the current schedule, the panel will hear arguments on Jan. 26 on a lawsuit that includes three former state building officials claiming the sale of the buildings to a group of private investors is an unconstitutional gift and waste of public funds.

The deal would provide $1.2 billion in revenue after $1.1 billion in building bonds and sale expenses is paid off. The plaintiffs claim renting back the office space would cost the state millions and possibly billions in the long run.

The case was assigned to seven temporary justices, taken from state appeals courts.

Joseph Cotchett, a lawyer for the plaintiffs, noted there are only three more court days before Schwarzenegger leaves office.

"He's got one more shot at it," Cotchettt said, referring to Schwarzenegger's emergency appeal to the state high court.

The 11 building complexes are in San Francisco, Oakland, Santa Rosa, Sacramento and Los Angeles.

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