Arnold Schwarzenegger is seeking to ease California's massive budget deficit by selling off state buildings to private investors, but a lawsuit filed Tuesday is attempting to block the sale.
Schwarzenegger's administration has fired government officials who requested more information on the controversial deal, court papers note.
The lawsuit alleges that Gov. Schwarzenegger is unlawfully trying to sell 11 state buildings--including the Ronald Reagan building in downtown L.A., the San Francisco Civic Center, and the Department of Justice Building and the Attorney General Building in Sacramento--to the investment group California First, LLC.
As California faced a $19 billion budget shortfall, Schwarzenegger moved forward earlier this year with plans to sell the buildings to the highest bidder and lease the facilities back from the buyer. The state Public Works Board approved the sale on Tuesday, with expected profits of $1.2 to $1.3 billion for the state in this fiscal year.
The move will cost taxpayers $646 million over the next 20 years, according to an analysis published last week by the California Legislative Analyst's Office. The California Department of General Services, which is handling the sale (and whose acting director is named as a defendant in the lawsuit) had estimated the sale would turn a $2 million profit over the first 20 years.