Skip to comments.California to Sell 24 Government Buildings for $2.3 Billion
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 ...
...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.
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. )
Government wouldn’t build themselves things they didn’t need, would they?
It’s CA lol they were probably built by illegal aliens
“...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.
Probably worth $ 3.2 B on the open market
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.
I wonder what the terms of the lease are...
Union labor required for maintenance?
Cost plus profit of x % allowed each year?
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...
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.
Can you imagine the lock-out clauses that must be in the lease?
“If CA is one day late paying the rent...”
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.”
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.
This is not a "bankable" lease in real estate terms.
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.
I’m going to have to increase my reasons-I-left-CA meter digits from five to six if this keeps up.
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.
A company I once worked for did this, sold their headquarter building and leased it back. It does help with short term cash flow.
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.
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.
Just think what Arnold could have got for them five years ago. IMO, this is planned malfeasance.
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.
Fool? I think more flim-flam man than fool; he plays the idiot savant.
Just another climber.
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.
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.
Only a fool would buy a building in San Francisco.
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?
He's fine. He took a long trip and now he has computer problems.
Thanks for letting me know.
I figured the former... didn’t know the latter.
I kinda miss that guy! (you listenin’, SW?)