Jerry Brown to cancel sale of 11 California government buildings
Gov. Jerry Brown said his administration will abandon the proposed sale of 11 government buildings, including the Junipero Serra State Building and Ronald Reagan State Building in downtown Los Angeles, that would have netted an estimated $1.2 billion to help balance the state budget.
Brown said the building sale, negotiated by the administration of former Gov. Arnold Schwarzenegger, amounted to a budget gimmick. State offices would have remained in the buildings after the sale and paid rent under the previous administration's plan. The plan would have provided some short-term cash, Brown said, but ultimately cost taxpayers more money over time.
"The sale of the buildings didn't really make much sense," he said at a Wednesday morning Capitol press conference. "It is in effect a gigantic loan with interest payments equal to 10% every year."
Brown is proposing to do other internal borrowing from state funds at a lower rate to cover the funds that would be lost this year by canceling the sale. "We found an alternative that can save a lot of money," he said.
The sale of the buildings had been tied up in court in recent weeks, after two former building commissioners argued it was an illegal waste of taxpayer money.
Brown said he also was reconsidering whether the state should sell other property, such as fairgrounds it owns in Orange County and San Diego County.
"This is not the best time to be selling real estate," he said. "I think we have time to consider what we ought to do with that. "
-- Shane Goldmacher and Evan Halper in Sacramento
Photo: The Junipero Serra State Building in downtown Los Angeles was one of the structures the state had proposed selling. Credit: Bob Chamberlin / Los Angeles Times