State Asks SJ Lawyer to Lift Block on Sale of Buildings

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    NEWSLETTERS

    TK
    Inside the state supreme court.

    Lawyers for Gov. Arnold Schwarzenegger have asked a state  appeals court in San Jose to lift a stay on the $2.3 billion sale of 11 state  buildings and to do so quickly.

          The sale to a group of private investors known as California First  had been due to close Wednesday. But it was temporarily blocked late last  week by the Court of Appeal in San Jose in response to a lawsuit filed by  three former state officials.
         
    The 11 buildings are in San Francisco, Oakland, Santa Rosa,  Sacramento and Los Angeles. One of them, the San Francisco State Building,  houses the headquarters of the California Supreme Court.
         
    The sale would give the state more than $1.2 billion to help close  its budget gap after $1 billion in bonds and an additional amount in expenses  is paid off.
         
    Lawyers for Schwarzenegger filed a brief Wednesday  telling the appeals court that the revenue is desperately needed and that  "time is of the essence" in completing the deal.
         
    "If the state cannot close on a timely basis as required by the  contract, then there is no assurance that the sale will be completed by  California First," the attorneys wrote.
         
    "If the sale does not go through, then the state will suffer the  very particularized harm of the immediate loss of $1.2 billion in revenue,  which is a significant public benefit," the brief said.
         
    The administration asked the appeals court to accelerate its  schedule by ordering the plaintiffs to respond by Friday and also to order  them to post a bond of $23 million - 1 percent of the sale price.
         
    The appeals court on Friday had ordered the administration to file  its response brief by Dec. 27 and the plaintiffs to reply by Dec. 29. 
         
    But in Wednesday's papers, Schwarzenegger's lawyers argued that  since they filed their brief early, the other side should be asked to reply  within two days.
         
    The lawsuit by three former Los Angeles and San Francisco state  building authority members claims the sale is an illegal and unconstitutional  waste and gift of public funds. The three officials were fired by  Schwarzenegger this spring after they questioned the deal.