March 13, 2011

Mysterious Secretive Consortium Really Pissed off that They Can’t Buy State Landmark Buildings in Sweetheart Deal that would Cost California Billions in Needless Rent, Sez They’ll Sue

Remember this story?  A bunch of well-connected cronies wanted to buy all those state buildings and rent them back, with the deal rushed through the waning days of the Governator’s final term? It’s Ba-a-a-a-a-a-ack!

Miffed Investors Sue State over Building Sale

The mysterious consortium goes to court after Gov. Brown nixes deal to sell 11 buildings

By ELIZABETH LESLY STEVENS, Bay Citizen on March 11, 2011 – 4:34 p.m. PST

Photo, right: Adithya Sambamurthy/The Bay Citizen

The California Public Utilities Commission Building is included in a controversial plan for the state of California to sell 11 office complexes to a group of private investors, then lease the space for 20 years

The controversial deal to sell state office buildings is headed to court.

Late Thursday, attorneys for the would-be buyers, California First, filed suit in a state court in Los Angeles, trying to get the court to force the state to go ahead with the deal. “A deal is a deal,” California First says in the suit. No further information about the identity of the California First partners appears in the legal filing, and the group’s attorney did not immediately return a call requesting comment. The group also appears to be paving the way to sue the state for damages if the sale does not go through.

That’s the American way, all right.  If you don’t get your insanely profitable deal done via friends in high places because a bunch of crybabies point out your doing so is probably illegal, sue their pants off!  Also, sue their pants off while refusing to identify exactly who you are, maybe by hiding your faces with those pants you collected.  Yes, we still don’t know exactly who wants to buy these buildings, but they’re mighty unhappy the sale was blocked and they’re going to court to make it happen.

Just remember what we learned last time we covered this topic: it’s probably a bunch of foreigners with cash not only on the sidelines but in both end zones and all the luxury boxes.  According to the Matt Taibbi article we linked to, there’s a good chance it’s oil money.  The last thing they need is for anyone to find out who they are.

Can we declare a moratorium on selling infrastructure to foreign investors? There must be a few Google gazillionaires who want their very own bridge or judicial building.  Maybe Jerry Brown would be okay selling to in-state private investors instead.  Mark Zuckerberg hasn’t bought himself a house yet, think he’d like to own something with a big state seal on it?  And Larry Ellison, he’d buy it just so Jim Clark couldn’t buy it first.  Problem solved!

Comments (12) -- Posted by: madhaus @ 5:03 am

12 Responses to “Mysterious Secretive Consortium Really Pissed off that They Can’t Buy State Landmark Buildings in Sweetheart Deal that would Cost California Billions in Needless Rent, Sez They’ll Sue”

  1. madhaus Says:

    Your weekend choice: race issues or corruption? And only one will survive!

  2. nomadic Says:

    Too heavy for weekend pondering.

  3. Real Estater Says:

    Whoever wrote that title line should learn about proper capitalization.

  4. waiting_for_the_fall Says:

    Do you ever have a good word to say about anyone or anything?
    Who cares about capitalization.

  5. Petsmart groomer Says:

    > Whoever wrote that title line should learn about proper capitalization.

    Never heard of title case? Although “would” should have been capitalized too.

  6. madhaus Says:

    Hmmmm, would would be capitalized? According to the Wikipedia entry, there are a number of rules in determining which words to use. I threw “would” out with the prepositions, articles, and conjunctions, along with “forms of ‘to be,’” that is, helper words. Bordering on closed-class, I guess.

    It is amusing to hear the usual unqualified amateur chime in on yet another topic he has no familiarity with whatsoever. Even more amusing that he missed the deliberate run-on sentence. What’s your sense in including “would” with a capital?

  7. nomadic Says:

    Sure RE knows nothing about headlines, but I think RE was Pissed Off over that title.

  8. Petsmart groomer Says:

    Regarding ‘would’, here is an example from The New York Times: Accountability Would Seem to Begin and End With Referees.

    But why is Jessica’s favorite book spelled “Eat, Pray, Love”? Is it just a way to capitalize on the readers’ grammar skills, or lack thereof?

  9. The Gilroy Alex Says:

    Sell and then rent back may be smart. What are smart people doing now? Selling their places and then renting. So the State sells these buildings, rents them back then as the economy continues to tank, rents are negotiated down or the buildings simply sit empty, with the State not stuck holding the bag.

    Although I loathe the idea of the buildings being sold to foreigners.

  10. nomadic Says:

    Smart? I don’t think so.

    I’m sure the State would be getting triple net leases, so they’ll still be responsible for all utilities, maintenance and property tax (if there is such a thing on state-owned property). The sunk cost of the property and buildings has already been absorbed so all you get is the very short-term benefit of some extra cash here versus a never-ending payment stream to rent that sh*t back.

    You can’t really be so optimistic that the size of government would be slashed enough to empty out whole buildings, are you? BTW, those rents were fixed in the sales contract for 20 years so there isn’t any “negotiating them down” either.

  11. The Gilroy Alex Says:

    Nomadic – I fear you are probably right. I just operate from a Greatest Depression mindset.

  12. sfbubblebuyer Says:

    If they were REALLY smart, they’d sell them, pay a month’s rent, then squat for a year or two until eviction looms, then seize them through imminent domain and pay these guys a buck based on them being ‘unrentable’ because of squatting problems.


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