Court rules Schwarzenegger can sell 11 state buildings to private investors

Sale could raise $2.3 billion though state will now have to rent back the space

A San Francisco Superior Court judge Friday refused to block the planned $2.3 billion sale of 11 state buildings to a group of private investors.

Judge Charlotte Woolard said she was standing by a tentative ruling issued Thursday in which she said the sale did not violate state law and was not an illegal waste or gift of public funds.

The sale, due to be completed on Dec. 15, would contribute $1.3 billion to closing the state's budget gap after $1 million in bonds on the 11 buildings is paid off.

But Woolard, referring to appeals, told lawyers for three former state officials, said, "I encourage you to seek any remedies you want to seek."

Attorney Joseph Cotchett, representing two of the plaintiffs, said they will ask the state Court of Appeal in San Francisco on Monday to block the Dec. 15 sale.

Cotchett's clients are former Los Angeles State Building Authority President Jerry Epstein and member Redmond Doms, who were fired by Gov. Arnold Schwarzenegger this spring after they objected to the sale.

Andrew Stroud, representing the governor, argued that the sale doesn't violate any laws and is not unconstitutional gift of public funds because the $1.3 billion in revenue will benefit the state.

The structures include the San Francisco State Building, which houses the California Supreme Court and a state appeals court; the Public Utilities Commission Building in San Francisco, the Elihu Harris Building in Oakland and the Judge Joseph Rattigan Building in Santa Rosa.

The lawsuit claims the sale will cost taxpayers at least millions and possibly more than a billion dollars.

The two buildings are the San Francisco State Building and the Ronald Reagan State Building in Los Angeles, which contains a Supreme Court courtroom and an appeals court.

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