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Business Journal: Legislative Analyst Weighs in on State Building Sale

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(Sacramento, CA)
Tuesday, April 27, 2010
The governor’s controversial plan to sell 11 state-owned buildings and lease-back office space is a money-losing idea. That’s according to an independent report.  The Legislative Analyst Office says selling the buildings, including several in Sacramento, would generate $600 million to $1.4 billion, after the state pays off debt on the buildings. But the state would need to pay $200 million every year to lease back the office space, and the Legislative Analyst Office says it’s a “bad budgeting practice.”
The Department of General Services, which has received 300 bids for the buildings, says a full analysis is required before determining whether selling the properties makes financial sense. Gov. Arnold Schwarzenegger, who announced the plan last year as a way to generate much-needed revenue for the state, says the buildings will not be part of a “fire sale” and only sold at the right price.
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