Gov. Brown Cancels Sales of State Buildings

Bay City News -- Gov. Jerry Brown announced yesterday that he is canceling the $2.3 billion sale of 11 state buildings that was planned by former Gov. Arnold Schwarzenegger.

"The sale and leaseback plan was short-sighted and would have cost taxpayers billions of dollars in the long run," Brown said.

Under the proposal, buildings in San Francisco, Santa Rosa, Oakland and Los Angeles would have been sold to a group of private investors and leased back to the state.

The sale was intended to help close the state's budget gap by providing $1.2 billion in cash after bonds and expenses were paid off.

Brown said at a news conference in Sacramento that he would replace that $1.2 billion with an $830 million loan from special fund reserves and other revenues and cost savings.

"Selling and leasing back the state's buildings for one-time gains is not prudent," Brown said.

The buildings included the State Building in San Francisco, which houses the California Supreme Court, as well as the Public Utilities Commission building in San Francisco and state office buildings in Santa Rosa and Oakland.

The sale was challenged in a lawsuit filed by three former state building authority officials who were fired from their volunteer posts by Schwarzenegger last year after they questioned the deal.

The Schwarzenegger administration had hoped to complete the sale by December, but the legal challenge delayed the transaction until after Brown took office in January.