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!

<img missing due to burbed’s terrible admin skills. working on restoring>Hidden in emergency budget legislation, 7.3 million square feet of noted state office complexes were put up for sale, including several in San Francisco.That resulted in the oddity of all seven justices recusing themselves from deciding whether the sale could proceed. (Their offices in the Earl Warren building, part of the SF Civic Center, would be included, photo right.)  The deal was halted only 2 days before closing on December 15th, as Arnold’s reign came to an end.  And the more reporters dig to find out who benefits from this sweetheart deal, the more muck they find.

24 buildings on 11 sites, including landmarks such as the Ronald Reagan building in Los Angeles, plus others in San Francisco, Sacramento, Oakland, and Santa Rosa are being sold. The deal is with a mysterious group of investors who don’t wish to be identified, or claim they’ve dropped out when contacted.  The buildings cover 43 percent of all state government office space.

Identities of Investors in State Property Sale Grow Cloudier

Many have dropped out of contested deal, and those that remain are tight-lipped

By ELIZABETH LESLY STEVENS on January 12, 2011 – 3:12 p.m. PST
The Bay Citizen

Most of the members of a shadowy investor group that agreed to finance the sale of tony state office buildings last year appear to have dropped out of the deal, and those that remain are tight-lipped about their involvement in the transaction, which is being challenged in court as an illegal gift of state assets to a group with political pull in Sacramento.

Departing Gov. Arnold Schwarzenegger tried mightily in his waning days in power to close the controversial sale of 11 premier properties.

The deal, now being challenged in a state appellate court, is in limbo. The new administration of Gov. Jerry Brown asked the court for a month to review the matter, and now arguments are scheduled to begin in February. The nonpartisan Legislative Analyst’s Office reported in November that the deal would end up costing California taxpayers $6 billion in the coming decades, but the approximately $1.3 billion net proceeds of the deal are already factored in to the state’s budget for the coming year. If the deal falls apart, the cash-strapped state’s deficit will swell by another $1.3 billion.

The deal had been scheduled to close on Dec. 15. The legal challenge, brought by lawyer Joseph Cotchett and former San Francisco City Attorney Louise Renne, convinced the appellate court to issue a stay just 48 hours before the sale was to have closed.

<img missing due to burbed’s terrible admin skills. working on restoring>Color me surprised.  A bunch of former officeholders finding ways to sell themselves some primo office properties hiding behind lawyers and corporations?  Stalwart building authority members who objected to the deal got sidelined?  Who would have predicted that?

And what a lovely problem it’s left California with: sell our buildings to these crooks, and have to rent what we owned.  (Bonus!  And get evicted in favor higher-paying trophy retailer!)  Or, invalidate the deal and dig up another $1.3 billion for that out-of-whack state budget.  Plus everyone standing to benefit will then sue when they don’t get their cut.  Be sure to read the first link in the article for more background if you haven’t been following this local example of how crony capitalism works.  (Photo above left, State PUC building is part of the 24 building deal.  Adithya Sambamurthy/The Bay Citizen)

But that’s just one secretive sell-off of public assets.  Burbed reader nomadic sends in what could be the answer, but it only raises more concerns.  Matt Taibbi suggests that large chunks of our infrastructure, including “a whole bevy of Californian public infrastructure projects,”are being bought by “sovereign wealth funds.” SWFs are extremely large amounts of cash, in particular from oil-producing nations.  One of the SWFs was offered the entire Pennsylvania Turnpike.  (They demurred, but Taibbi names other public works projects that have been sold off, including the Chicago Skyway and their parking meter revenue.)

Around this time, state and municipal executives began putting their infrastructure assets up to lease — essentially for sale, since the proposed leases in some cases were seventy-five years or longer. And in virtually every case that I’ve been able to find, the local legislature was never informed who the true owners of these leases were. Probably the best example of this is the notorious Chicago parking meter deal, a deal that would have been a hideous betrayal even without the foreign ownership angle. It was a blitzkrieg rip-off that would provide the blueprint for increasingly broke-ass America to carry lots of these prized toasters to the proverbial pawnshop.

Sounds familiar.  Maybe that’s why this California First LLC group is being so secretive?