A state appeals court in San Jose shortened its deadline Thursday for receiving written arguments on whether it should continue a stay blocking the $2.3 billion sale of 11 state buildings.
The Court of Appeal ordered three former state officials who challenged the sale to submit a brief by next Thursday instead of by the original deadline of Dec. 29. The order came in response to a request filed Wednesday by Gov. Arnold Schwarzenegger for acceleration of the case.
But the court didn't grant the governor's full wish for a much shorter deadline of today for the plaintiffs' brief.
The sale to a group of private investors had been due to close Wednesday, but was stayed late last week by the appeals court. The deal 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. The state would rent back office and court space in the 11 buildings in San Francisco, Oakland, Santa Rosa, Sacramento and Los Angeles for at least 20 years.
"We are pleased the court has shortened the briefing schedule and hope the court decides this case quickly so we can complete the transaction," State Department of General Services spokesman Eric Lamoureux said.
Anne-Marie Murphy, a lawyer for the plaintiffs, also expressed optimism regarding the scheduling order.
"We're pleased the Court of Appeal will take the time to deliberate on the serious constitutional issues in this case," Murphy said.
After receiving the final brief, the appeals court can either set a hearing or rule without a hearing on whether to continue the stay while the lawsuit proceeds.
The three plaintiffs are former Los Angeles State Building Authority members Jerry Epstein and Redmond Doms and former San Francisco State Building Authority member Donald Casper. They were fired by Schwarzenegger last spring after they questioned the sale. The plaintiffs claim the sale will cost the state millions and possibly billions of dollars in the long run and is an unconstitutional and illegal gift and waste of public funds.
Schwarzenegger, in the brief filed Wednesday, contends the sale is not a waste or gift because the sale is for full market value and will give the state a desperately needed infusion of cash. He said a delay could jeopardize the sale.
"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 governor's lawyers wrote.