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California to Sell 24 Government Buildings for $2.3 Billion
CNBC ^ | 10/12/10

Posted on 10/12/2010 7:46:29 AM PDT by FromLori

The state announced Monday it is selling 24 government office buildings — including the Ronald Reagan State Building in Los Angeles and the San Francisco Civic Center — to a group of private investors for $2.3 billion.

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy; Government; News/Current Events; US: California
KEYWORDS: bankrupt; ca; caassets; cabudget; realestate

1 posted on 10/12/2010 7:46:31 AM PDT by FromLori
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To: FromLori

...assuming someone has the capital and use for the buildings to want to buy them, of course. But CNBC probably hasn’t thought that far ahead yet.


2 posted on 10/12/2010 7:47:32 AM PDT by BelegStrongbow (St. Joseph, patron of fathers, pray for us!)
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To: FromLori

Wow, the state gets 2 plus billion, drops maintenance costs, and gets taxes going forward. A triple.

( Probably going to have crap union built, hooked up hack contractors build new 20 billion dollars buildings to replace them. )


3 posted on 10/12/2010 7:49:25 AM PDT by Leisler ("Over time they create a legal system that plunders and a moral code that glorifies it." F. Bastiat)
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To: FromLori

Government wouldn’t build themselves things they didn’t need, would they?


4 posted on 10/12/2010 7:49:25 AM PDT by johniegrad
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To: Leisler

It’s CA lol they were probably built by illegal aliens


5 posted on 10/12/2010 7:51:54 AM PDT by FromLori (FromLori)
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To: BelegStrongbow; Leisler
The link wouldn’t open but IIRC the plan is to sell the buildings but then lease them back. Almost certain to cost the taxpayers more in the long run, IMO
6 posted on 10/12/2010 7:54:13 AM PDT by BenLurkin (This post is not a statement of fact. It is merely a personal opinion -- or humor -- or both.)
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To: BelegStrongbow

“...assuming someone has the capital and use for the buildings to want to buy them, of course.”

Presumably the new owner would lese them back to the gvt.

It’s a way to get cash out in an emergency. Kind of like Chicago selling its parking meters.

But you can’t eat the seed corn forever.


7 posted on 10/12/2010 7:58:02 AM PDT by Pessimist
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To: FromLori
California to Sell 24 Government Buildings for $2.3 Billion

Probably worth $ 3.2 B on the open market

8 posted on 10/12/2010 7:59:41 AM PDT by paul51 (11 September 2001 - Never forget)
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To: FromLori

There is no questions that over time it will cost the state more to lease the very same buildings. But given the corruption in the state legislature, it allows them to avoid the budget spending decisions that they should be making to day. Most of the politicians in Sacramento would sell their own mothers to brothels to get elected, or to avoid necessary budget decisions.


9 posted on 10/12/2010 8:02:51 AM PDT by RLM
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To: Pessimist

I wonder what the terms of the lease are...

Union labor required for maintenance?

Cost plus profit of x % allowed each year?

Who knows.

But, CA just privitized the operation of the buildings - which could potentially SAVE money in the long run.

At least some folks will no longer be covered by CALPERS...


10 posted on 10/12/2010 8:04:58 AM PDT by patton (Obama has replaced "Res Publica" with "Quod licet Jovi non licet bovi.")
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To: FromLori

I am not a fiancial genius (nor do I play one on TV) but all I see this doing is borrowing money from the future and paying it back over time. Sort of like a payday loan.

The people and functions that go on within those building is not going away. The state will still need them. Right now they are (I presume) paid for.

While it is true that the states loses any property tax on the property, and that they must pay the maintenance on the building I think it would also be true anyone that buys them will include those cost into the rent.

This is just another way to kick the can down the road without solving the basic problem, the state of California is spending more than it can afford.


11 posted on 10/12/2010 8:05:59 AM PDT by CIB-173RDABN (California does not have a money problem, it has a spending problem.)
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To: CIB-173RDABN

Can you imagine the lock-out clauses that must be in the lease?

“If CA is one day late paying the rent...”


12 posted on 10/12/2010 8:13:38 AM PDT by patton (Obama has replaced "Res Publica" with "Quod licet Jovi non licet bovi.")
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To: CIB-173RDABN

Actually yes it’s a way to kick the can down the road but!

“The Associated Press reported earlier this year that the deal would end up costing the state $5.2 billion in rent over 20 years, perhaps saddling taxpayers with costs beyond whatever the state would net from the sale.

Three of the properties already are paid off, while four others were expected to be paid off in the next five years.”


13 posted on 10/12/2010 8:17:25 AM PDT by FromLori (FromLori)
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To: Leisler
Wow, the state gets 2 plus billion, drops maintenance costs, and gets taxes going forward. A triple.

Uh, no. The article says after the sell, CA will rent the property back. Someone is making a killing and it's not the CA taxpayers. Also, don't you think it is rather interesting that there is not mention of who the buyers might be? Same folks wanting to build a mosque on Ground Zero, hmmm? The ME understands now that crashing planes into buildings was child's play compared to outright buying America. The own our msm, they own our national landmarks, so what's next.

14 posted on 10/12/2010 8:40:47 AM PDT by bgill (K Parliament- how could a young man born in Kenya who is not even a native American become the POTUS)
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To: bgill
The article says after the sell, CA will rent the property back.

This is not a "bankable" lease in real estate terms.

15 posted on 10/12/2010 8:59:22 AM PDT by jslade (People who are easily offended, OFFEND ME!)
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To: bgill

My complaint with this, along with a lot of things govt does, is why didn’t they put out a call for bids? There are a lot of things that govt can sell, but they need to take bids, not result to crony capitalism. Recently they announced that they were working on a non-bid deal to sell Delmar race track...again..no competitive bidding.
When the Govt in Hong Kong or Singapore sells govt property they go out to bid. Why not here? The answer is the govt doesn’t want competitive bids because it cuts off sweet heart deals.


16 posted on 10/12/2010 9:00:01 AM PDT by Oldexpat
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To: BenLurkin

I’m going to have to increase my reasons-I-left-CA meter digits from five to six if this keeps up.


17 posted on 10/12/2010 9:08:16 AM PDT by BelegStrongbow (St. Joseph, patron of fathers, pray for us!)
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To: FromLori

Time for a federal version of this story - take loads of land, pass along mineral rights and get off the land for the benefit of the people. We ahve so many office building that are poorly used it is a crime. Plus if you make people work in smaller spaces you start the process of closing down branches then departments - we got in this mess little by little we get out chunk by chunk.


18 posted on 10/12/2010 9:16:42 AM PDT by q_an_a (a)
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To: FromLori

A company I once worked for did this, sold their headquarter building and leased it back. It does help with short term cash flow.


19 posted on 10/12/2010 9:20:16 AM PDT by ThomasThomas (I still like peanut butter)
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To: Leisler
Wow, the state gets 2 plus billion, drops maintenance costs, and gets taxes going forward. A triple.

Not exactly ... the rent costs are projected to be $5.2B Where do you think the new owners will get the money to cover maintenance and pay the taxes? That's right, from the gubermint.

20 posted on 10/12/2010 9:29:00 AM PDT by NonValueAdded ("It's amazing, A man who has such large ears could be so tone deaf" Rush Limbaugh 9/8/10)
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To: BenLurkin
The link wouldn’t open but IIRC the plan is to sell the buildings but then lease them back.
Almost certain to cost the taxpayers more in the long run, IMO

EXACTLY right.

21 posted on 10/12/2010 9:51:42 AM PDT by calcowgirl ("In politics the middle way is none at all." -- John Adams)
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To: All

The PDF linked below is the sales brochure for the properties

11 Office Properties
7.3 Million Sq Ft
20 year sale/leaseback portfolio
3 California markets (L.A., S.F., Sac)

Sheesh - they sold the S.F. Civic Center, The RR Building, and other PRIMO real estate that was near new or recently refurbed. They keep moving further and further toward bankruptcy with their idiotic decisions, saddling the state with future recurring expenses.

http://marketing.cbre.com/Denver/PMC/GoldenState/GSPBRO.pdf


22 posted on 10/12/2010 10:05:47 AM PDT by calcowgirl ("In politics the middle way is none at all." -- John Adams)
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To: FromLori

Just think what Arnold could have got for them five years ago. IMO, this is planned malfeasance.


23 posted on 10/12/2010 10:13:21 AM PDT by Carry_Okie (The fourth estate IS the fifth column.)
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To: calcowgirl
LOL, great minds. Build the debt on the backs of the public selling an attractive depravity, cash in on the resulting financial desperation when they sell cheap, and leave them holding the bag for the interest.
24 posted on 10/12/2010 10:23:59 AM PDT by Carry_Okie (The fourth estate IS the fifth column.)
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To: Carry_Okie

Well, we saw this coming a long time ago. Any valuable real property or revenue generating intangible property (e.g. the lottery)
has been on the selling block since Arnie took office. His financial backers appreciate it very much.

I’d like to see a pre-and-post Arnie balance sheet for the State.
I cannot wait until we are rid of this Austrian fool.


25 posted on 10/12/2010 10:31:45 AM PDT by calcowgirl ("In politics the middle way is none at all." -- John Adams)
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To: calcowgirl
I cannot wait until we are rid of this Austrian fool.

Fool? I think more flim-flam man than fool; he plays the idiot savant.

26 posted on 10/12/2010 10:34:18 AM PDT by Carry_Okie (The fourth estate IS the fifth column.)
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To: calcowgirl
Oh, I didn't add, "craven stooge for global power freaks he could never be," but I guess I just did.

Just another climber.

27 posted on 10/12/2010 10:35:54 AM PDT by Carry_Okie (The fourth estate IS the fifth column.)
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To: FromLori

The real estate is the smaller problem. It costs money to house people, whether you own or leaseback the facility.

But it costs far MORE to pay and benefit and pension the overpaid, overpensioned lazy worthless slugs who populate government office buildings.

Save money means cutting, slashing the ranks of government workers up and down.

Cut headcounts, cut salaries, cut benefits, cut pensions. Cut, slash, cut, slash.

Then the real estate issue becomes simple: The property is surplus, for there is no need to own or lease vacant space.


28 posted on 10/12/2010 10:44:50 AM PDT by truth_seeker
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To: Carry_Okie

Agreed

and Agreed.


29 posted on 10/12/2010 10:50:53 AM PDT by calcowgirl ("In politics the middle way is none at all." -- John Adams)
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To: calcowgirl
I would assert that term limits have turned our legislature into the same thing: a series of nameless put-up dolls, cardboard cutout pols with no identifiable sponsors.

It is a recipe for total lack of accountability, which is what we see.

The initiative process keeps putting patches on problems that are far more fundamental. It "protects" us from taking the hard medicine that results from electing responsible leaders. It matters not if it is a drugged out crack mom or a corporate lawyer, the process threatens to make welfare addicts of us all simply because of its inherent propensity to contradictory statutes, sops for the black robes of despotism.

30 posted on 10/12/2010 10:57:50 AM PDT by Carry_Okie (The fourth estate IS the fifth column.)
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To: FromLori

Only a fool would buy a building in San Francisco.


31 posted on 10/12/2010 11:44:59 AM PDT by Vaduz
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To: Carry_Okie; SierraWasp

I would add that within the initiative process there are all the fine-print provisions hidden behind the ‘patches’ which oftentimes cause a whole other set of problems.

WASS, as Waspman might say.

Speaking of which, where has that man been?


32 posted on 10/12/2010 12:15:07 PM PDT by calcowgirl ("In politics the middle way is none at all." -- John Adams)
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To: calcowgirl
Speaking of which, where has that man been?

He's fine. He took a long trip and now he has computer problems.

33 posted on 10/12/2010 12:33:41 PM PDT by Carry_Okie (The fourth estate IS the fifth column.)
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To: Carry_Okie; CounterCounterCulture; SierraWasp

Thanks for letting me know.
I figured the former... didn’t know the latter.

I kinda miss that guy! (you listenin’, SW?)


34 posted on 10/12/2010 12:58:52 PM PDT by calcowgirl ("In politics the middle way is none at all." -- John Adams)
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