Dick Schmidt / Bee file, 2003

State buildings were put up for sale and the deal was nearly consummated. Gov. Jerry Brown stopped it and would-be buyers sued in 2011.

The Buzz: Schwarzenegger's failed state building sale still percolating

Published: Wednesday, Jul. 24, 2013 - 12:00 am | Page 3A

Remember that plan to sell 11 state office buildings to raise cash during the Gov. Arnold Schwarzenegger administration?

The state may no longer be interested in the sale- leaseback arrangement, but the lawsuit from the severed deal lives on.

An investor group sued in 2011, alleging that Gov. Jerry Brown improperly pulled the plug shortly after taking office.

The $2.3 billion deal included $1.2 billion to assist the then-cash-starved state. At the time, the Legislative Analyst's Office criticized the deal as "poor fiscal policy" due to significant long-term lease costs.

Attorneys for the investor group, California First LP, say they scored a pivotal ruling Monday in their attempts to force the sale.

A judge denied the state's motion to dismiss and will allow California First LP to seek monetary damages equal to the amount the group would have earned had the deal gone through.

"This is the most important development in this case to date," said Angela Agrusa, counsel for California First LP.

The state is "considering our options," said Eric Lamoureux, spokesman for the state Department of General Services. "We are evaluating the judge's ruling and determining our next steps."

– Melody Gutierrez


Finding dental care for children on Medi-Cal is not as easy as it seems, according to a study released Monday by the Children's Partnership. The U.S. Department of Health and Human Services website lists dentists who take children on Medi-Cal, but researchers contacted 145 of them and found nearly 10 percent of them did not accept new patients.

– Annalise Mantz


"It should have been a much more open and deliberative process. … They should have narrowed it down to a short list and had the … candidates interact with students, faculty and staff."

ASSEMBLY SPEAKER JOHN A. PÉREZ, Los Angeles Democrat, on NBC4's "News Conference," describing as "very flawed" the process that led to the hiring of Janet Napolitano as UC president. Nonetheless, Pérez said he supports the choice. <;MXn Call The Bee’s Xxxxx Xxxxxxxx, (916) 321-XXXX.> <;MXn Call The Bee’s Xxxxx Xxxxxxxx, (916) 321-XXXX.>

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