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.
