State Poised to Sell Trophy Buildings to Unidentified Investors
Governor's lawyers race to overcome legal challenge on deal that could cost taxpayers billions
As Gov. Arnold Schwarzenegger prepares to decamp from Sacramento on Jan. 3, he has displayed zealous determination to complete what critics say will be among the worst deals the state has ever made: the sale of 11 premier state office complexes to a group of politically connected private investors.
The deal, which includes the San Francisco Civic Center, has been pitched as a way to generate much-needed cash. California would pocket about $1.3 billion after debt is paid off, but would then be a tenant in the same buildings.According to the nonpartisan Legislative Analyst’s Office, the deal would cost taxpayers $6 billion over 35 years.
The buyer is a consortium of investment firms that refuses to disclose where the money is coming from or even who is involved. Opponents of the transaction, who include Bill Lockyer, the state treasurer, and John Chiang, the controller, say it is a terrible deal that smacks of cronyism.
