A California appeals court on Monday effectively barred the sale of state government buildings from proceeding until after Gov. Arnold Schwarzenegger leaves office, casting doubt over whether the deal will ever go through.
A three-judge panel in San Jose continued a stay on the sale until it hears arguments in court Jan. 23, three weeks after Democratic Gov-elect Jerry Brown is sworn into office. The decision will stand unless the California Supreme Court overturns the appeals court decision in the next four days.
"Today's ruling was extraordinary for the taxpayers of California," said attorney Joseph Cotchett, who is representing plaintiffs Jerry Epstein and A. Redmond Doms.
Epstein and Doms, two former state building authority members, allege that the sale amounts to an unlawful gift of public funds and illegally bypassed the state Judicial Council, which has authority over buildings that house courts, as several of the for-sale state buildings do. Their request to stop the sale initially was denied, but the appeals court issued a stay, temporarily halting the sale.
Monday's decision sets the date for the hearing on the matter. Schwarzenegger last year proposed selling 24 state-owned buildings to raise more than $1.2 billion to help close the state's general fund budget deficit. Under the deal, the state would continue to use the space by entering into a 20-year lease with the new owners.
The Republican governor ousted Epstein and Doms earlier this year after they asked the state to perform a cost-benefit analysis and questioned the long-term consequences for taxpayers. Don Casper, a third member who was ousted for questioning the sale, also signed on as a plaintiff in the lawsuit.
Several independent analyses found the sale and subsequent lease arrangement will end up costing taxpayers more money in the long run. Many of the buildings are close to being paid off.