Law firm files suit to halt sale of state buildings

A San Francisco law firm has filed suit in a bid to halt state government plans to sell iconic public buildings to raise money for balancing the budget.

The suit filed Tuesday against Gov. Arnold Schwarzenegger and other state officials brought by taxpayer-clients of Cotchett, Pitre & McCarthy alleges that the proposed sale to a private consortium with foreign interests is both illegal and unconstitutional.

Under the sale terms approved Monday by the governor's office, 24 state buildings in 11 locations would be sold to private investors and leased back by the state courts and agencies that occupy them.

Supporters contend that the sale will raise $1.2 billion to help shrink the deficit, while opponents point to the nonpartisan Legislative Analyst's Office prediction that the state will pay $1.4 billion more over the next 35 years than if it keeps the buildings.

Among the properties designated for sale are the Ronald Reagan State Building in Los Angeles and the Earl Warren and Hiram Johnson buildings in San Francisco, all of which house state courtrooms. A declaration by California Court of Appeal Justice Richard D. Huffman was filed with the lawsuit, noting that the state's Judicial Council has control over courtroom facilities and has not given its consent to the sale and lease-back plan.

The suit was filed in the names of taxpayers Jerry Epstein and Redmond Doms, two former Los Angeles State Building Authority officials who were dismissed after sparring with the governor over the proposed sale.

"This back-room deal needs to see the light of day," said attorney Joseph W. Cotchett, representing the taxpayers bringing the suit.

He noted that the state treasurer, controller and at least one former governor had come out against the "fire sale" and urged the San Francisco County Superior Court to "stop this sell-off of California's magnificent buildings."

A spokesman for the governor's Department of General Services, Eric Lamoureux, said the administration doesn't comment on pending litigation. He said the state was proceeding with the sale and expected to close escrow Dec. 15.

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--Carol J. Williams

Comments

[George]

The math-challenged leaders of California have ruined the state's economy--now all solutions are bad and painful. Learn math, or learn bitter lessons.

[Off the Books]

Like Google's Dutch sandwich off shore tax scheme (tax treaties between Dutch and other islands/countries to avoid paying taxes -- Google pays only 2.5% income taxes), these investors and maybe Arnold, probably have offshore companies. The money invested will likely come into California from offshore. Our state would probably pay rent to off-shore companies. So even these rent monies will likely leave California and the US and NOT be reinvested here. I thought California owned these buildings free and clear. Why no public sale, why under the table. Sounds very bad. Imagine who will be bugging our California court room buildings...