Trial date set for dispute over canceled sale of state-owned buildings

The dispute over the canceled sale of billions in state buildings is set for trial in November

After almost four years, a legal spat over a busted deal to buy billions of dollars' worth of state government office buildings could finally be going to trial.

The dispute focuses on a ballyhooed plan of then-Gov. Arnold Schwarzenegger to fill part of the state's budget deficit by unloading commercial building complexes owned by the state, including two in downtown Los Angeles, for $2.3 billion.

The deal quickly fell apart after Gov. Jerry Brown took office in 2011 and canceled the sale. It made no sense for the state to sell the properties for quick cash and then pay rent, only to keep working in the same locations, the governor said.

But the Texas and Irvine partnership that sought the buildings isn't giving up. The group, called California First, wants to revive the sale and be compensated for lost rents. A trial is scheduled for Nov. 10.

The governor's Department of General Services contends that the sale was invalid because a ruling in a related lawsuit forced the potential buyers to miss a deadline. The Brown administration continues to stick to that argument.

"The lawsuit is a misguided effort to resurrect a long-defunct contract." said General Services spokesman Brian Ferguson.

But a deal should still be a deal, says California First, and the judge should rule that at minimum, the state must recognize it had an implied contract to sell the buildings.

"We believe the state, like any other entity in the business of selling and owning real estate, has to be bound by the contracts it's entered into," said Angela C. Agrusa, the lawyer for California First.

Electric avenues

The Brown administration and the Japanese government are taking the first step toward what may be a major collaboration to put more nonpolluting, electric cars on Golden State highways.

The governor's Office of Business and Economic Development and a Japanese "new energy" development agency announced last week that they've signed a letter of intent to explore ways to help expand the use of zero-emission vehicles.

The idea is to build a network of fast-charging stations so electric-only car owners can quickly top off their batteries and feel confident about taking long, intercity trips on major California highways, the governor's office said.

"We have high hopes that the results of this project will be disseminated throughout the world," said Hiroshi Kuniyoshi, executive director of the New Energy and Industrial Technology Development Organization.

The planned collaboration is in line with the governor's ongoing commitment to put more electric cars on the road, an effort that suffered a morale setback recently when Palo Alto manufacturer Tesla Motors announced it would build a massive battery factory in Nevada, not California.

"Electric cars are a big part of our future," Brown said at a September election debate with Republican opponent Neel Kashkari. "We have a million electric car goal in California, and we're going to meet it."

marc.lifsher@latimes.com

Twitter: @MarcLifsher

 

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