Gov. Arnold Schwarzenegger filed an emergency appeal asking the California Supreme Court in San Francisco yesterday to lift a lower court stay on the planned $2.3 billion sale of 11 state buildings.
One of the buildings to be sold to a group of private investors is the state high court's own headquarters at the San Francisco State Building.
In an unusual action, all seven justices of the court disqualified themselves from acting on the emergency appeal.
The court said in an order signed by Acting Chief Justice Marvin Baxter that seven justices from state appeals courts will be assigned as replacements.
"All members of the Supreme Court recuse themselves," Baxter wrote in the brief order. He said the temporary high court justices will be announced in a later order.
The sale to a group known as California First is expected to bring the state $1.2 billion in revenue to help close the state's budget gap, after nearly 1.1 billion in bonds on the buildings is paid off. The offices would then be rented back to the state.
Schwarzenegger's appeal warns that the deal may be derailed, depriving the state of desperately needed revenue, unless it can be completed by the end of the year.
"Unless the state can close escrow before year-end, the sale may well disappear forever," the governor's lawyers wrote.
The stay temporarily blocking the sale was issued Dec. 13 by a state appeals court in San Jose, acting on a lawsuit filed by three former state building authority officials.
The appeal asks the high court to lift the stay by tomorrow (Thursday).
The three plaintiffs, who filed the lawsuit as taxpayers, claim the deal will cost the state millions and possibly billions of dollars in the long run and is an illegal waste and gift of public funds.
Schwarzenegger's lawyers contend the sale is "unquestionably legal" because it reflects market value and gives the state the benefit of $1.2 billion in cash.
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 all fired by Schwarzenegger last spring after they questioned the sale.
Thursday, the day on which Schwarzenegger wants the stay to be lifted, is also the date set by the Court of Appeal in San Jose for the plaintiffs to file a brief in that court defending the stay.
Their attorney, Anne Marie Murphy, said today, "We believe it's a shocking attempt to divest the Court of Appeal of jurisdiction. The Court of Appeal should have an opportunity to make a ruling prior to an appeal to the California Supreme Court."
The sale was originally due to close Dec. 15.
In addition to the San Francisco State Building, the structures include the California Public Utilities Building in San Francisco, the Elihu Harris Building in Oakland, the Judge Joseph Rattigan Building in Santa Rosa, and buildings in Sacramento and Los Angeles.