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Cory’s Plan to Make $5-Million Move Criticized

Times Staff Writer

The state controller, whose job includes monitoring spending by state agencies, was himself strongly criticized Wednesday for squandering nearly $5 million in taxpayer money on a proposed move to a luxury office building 10 blocks from the Capitol.

The charge was leveled by the state’s Little Hoover Commission, which released its report at the same time that Controller-elect Gray Davis was working behind the scenes to block the move.

The commission’s criticism stems from a decision by retiring Controller Ken Cory to consolidate several of his office functions in a new headquarters, a striking 19-story building that has come to be known as Emerald City because of its green-tinted glass facade.

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Among the extras planned for the controller’s new executive suite, according to an internal memo of last March, are television security monitors, special access badges to bar all but selected employees from sensitive areas and five “panic buttons” wired directly to the state police office.

The lease approved by Cory will more than double the cost of housing the controller’s staff. Analysts who reviewed the figures for the commission said the state could have saved as much as $4.7 million over the five-year lease period by locating the offices in less-expensive quarters.

“The state controller’s expensive and unjustified move . . . is another example of the state’s inability to manage its property resources,” said James M. Bouskos, chairman of a commission subcommittee that reviewed the lease.

About 900 of the 1,300 employees in the controller’s office have already moved into the new building. But top-floor offices meant to house the controller and his executive staff have not been occupied and could be subleased to other tenants, saving the state as much as $436,000, according to the commission.

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A Cory spokesman, John Chen, said the controller would have “no comment” on the commission’s allegations. Cory, who decided not to seek reelection to the post he held for 12 years, has refused to make himself available for comment on any issue since he announced his retirement from public office.

Davis, a former legislator and one-time chief of staff to Gov. Edmund G. Brown Jr., has appealed to Gov. George Deukmejian to help him keep the office in the Capitol and closer to the center of government activity.

Deukmejian, however, turned down Davis’ request, in part because a lease for the building already had been signed, an aide said. Davis, who forged Brown’s frugal image and portrayed himself as a “penny pincher” during his recent campaign, told Cory in a recent letter that keeping his office in the state Capitol would save taxpayers a considerable amount of money.

Historical Location

“The controller’s office has historically been in the Capitol, close to where the business the controller is charged with overseeing takes place,” Davis said. “And that’s where it should remain.”

Cory, who was repeatedly at the center of controversy during his three terms in office, came under renewed criticism earlier this year because of the way in which the new lease was negotiated.

The “Emerald City” building, an imposing structure that dwarfs the 1960s-era offices that surround it, was completed in 1984 but had remained largely vacant because of a glut of office space in the downtown Sacramento area.

The lease approved by Cory covered about 40% of the building’s space. Soon after it was signed, the building was sold for a reported $8-million to $10-million profit. Real estate industry officials at the time speculated that the sale was greatly enhanced by the fact that the building had become fully occupied, mainly because of the Cory lease.

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Robert T. O’Neill, the commission’s executive director, said Cory’s office made little effort to consider other possible locations and specifically limited the search to the downtown area where costs are higher.

But O’Neill said the commission did not investigate the propriety of the lease. “That would be a can of worms,” he said.


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