22,272

Most Californians find it hard to believe as I did-that the state owns 22,272 buildings and structures. They include the landmark Los Angeles Coliseum and Cow Palace in Daly City, and numerous offices and attendant facilities in 58 counties for 237,000 state employees to administer services to 38 million residents.

It’s also hard to believe that the eight largest economy in the world- with some of the highest taxes in the nation cannot pay its bills. California has a record $22 billion deficit and the lowest bond rating of the fifty states. It cannot continue to borrow, raise taxes and cut services; the state must reduce its overhead and find new sources of revenue.

Last June Governor Schwarzenegger and the State Legislature made a good bi partisan decision to start getting California out of real estate. They approved the sale and leaseback of eleven state office properties in Los Angeles, Oakland, Santa Rosa, Sacramento and San Francisco. This plan can produce $2 billion to reduce the debt, save billions in interest and net $660 million for state services. These buildings are attractive to investors; they can sell at high value and secure favorable long-term leases for the state. There is limited supply of office buildings that are fully leased, energy efficient, environmentally friendly and certified by the U.S. Green Buildings Council.

The Department of General Services (DGS) the business manager of the state oversees procurement, maintenance and disposal of all state properties. (www.dgs.ca.gov) The Acting Director of DGS, Ron Diedrich has said: “If we lease these properties, we can predict budget costs, and know the state will not be liable for costs inherent to owning real estate.”

Three of the eleven buildings in the sale-leaseback plan are located in San Francisco: The Civic Center Complex-Hiram Johnson State Office Building on Golden Gate Avenue and Earl Warren Building at 350 McAllister- where the Supreme Court meets, and also the Edmund G. Brown Building on Van Ness Avenue which houses the California Public Utilities Commission. They are leased by the Department of General Services through the San Francisco State Building Authority.

The sale of public, historic or religious properties always brings philosophical and financial questions; the Archdiocese of San Francisco faced both when it sold church buildings in the nineties. Today, some in both parties, including former members of the State Building Authority question the sale-leaseback plan-that is their luxury. They do not have the responsibility to balance the budget, and also protect education, public safety, health care and human services. Many have been silent during a decade of irresponsible spending by Sacramento that exceeded inflation and population growth and has caused the budget crisis. Few ever opposed the self-serving political class that has sold out the state to unrelenting greed of the public service unions that plunder California taxpayers and drive business- and jobs out of the state.

The sale-leaseback plan of state properties is bipartisan, prudent and necessary. Those who question it should offer responsible alternatives to balance the budget and protect vital services -or be silent.
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Mike DeNunzio is president of the San Francisco State Building Authority