State sells 2 LA office buildings to tighten budget gap

The State of California listed 17 buildings for sale statewide last month; two are in Los Angeles. Commercial real estate brokerage firm CB Richard Ellis has been contracted with the representation of these buildings, estimated to total $2b in value. The only two buildings for sale in Southern California are located Downtown - the Ronald Reagan building and the Junipero Serra building. The State hopes to raise about $660m from the sales toward its staggering budget deficit of $21b.

The state will engage in what is known as a sale-leaseback, where it will automatically enter into a 20 year lease agreement with whoever buys the properties. This is an ideal situation for a buyer because it guarantees a favorable occupancy rate, which in the case of the LA buildings, is 100%. The Ronald Reagan State Building, which was built in 1990, is considered to be one of the largest and best-equipped Class A office buildings in Los Angeles. It is located on 3rd St. between Spring and Main Sts. The smaller Junipero Serra building on the corner of 4th St. and Broadway, is a historic building completed in 1914.

The 17 building listing is the largest real estate portfolio on the market, and is a bold move for the State of California, desperate to shorten its hopelessly deep budget deficit. Gov. Arnold Schwarzanegger made headlines last year when he proposed the possible sale of large state-owned properties like San Quentin prison in Northern California and the Los Angeles Memorial Coliseum. While that controversial proposition never materialized, the 150 acre Orange County Fairgrounds will also be marketed for sale.

Roski Pushes to Bypass CEQA in Industry Stadium

Just days before this year's legislative session comes to a close, billionaire developer Ed Roski is lobbying the state's legislature to bypass key environmental and planning requirements for the proposed 75,000 seat football stadium. In a meeting with the state Senate Leader and Assembly speaker last week, Roski argued that the plan would provide "thousands of high-wage jobs" in an area with disparagingly high unemployment. Roski's proposal would also block litigation against the controversial project, including the pending suit filed by neighboring Walnut.

'Not so fast,' say Los Angeles County supervisors. Supervisor Gloria Molina argues that she supports the idea of a new football stadium in LA County, but that it can't justify a waiver of the strict California Environmental Quality Act regulations. "Hospitals, police stations, freeways and all sorts of valuable projects manage to be built without the necessity of CEQA exemptions," she says, and urges her companions to take the same stance. Highest among County's concerns are complications stemming from increased traffic to the area - a concern they say, that isn't felt at the state level.

But legislators in Sacramento have remained receptive to Roski's plea. Unfortunately, this is just the sort of misalignment between state and local viewpoints that has polarized all parties in talks over whether - and how - to sell the Los Angeles Memorial Coliseum for desperately needed cash. Of course many initial supporters of the NFL's return to LA liked the idea of a professional team playing in the historic Coliseum. But Roski's Majestic Realty Co. is probably correct in assuming that a shiny new stadium with sufficient parking and new traffic lights will make a bid to the NFL much more attractive. Legislators are due for a decision tomorrow, Friday, September 11.

LA Coliseum—Decaying and Underutilized—Remains in Strict Public Control

State senator Jeff Denham (R-Atwater) published an Op-Ed in the LA Times Monday, calling for the sale of the coliseum by its public owners and the dissolution of the controversial Coliseum Commission. The LA Memorial Coliseum, built in 1932 for the Summer Olympiad, was registered as a historic landmark in 1984, the year of the Olympics' return to Los Angeles. But since a major retrofit that year, the stadium has been rapidly decaying and is used less and less frequently. The coliseum is owned by a confusing partnership between the city, the county, and the state - all of which have plunged into debt since the recession. The USC Trojans football team is the only large, long-term tenant at the stadium, and is desperate for a policy change.


Trojan fans will remember the anxiety-inducing negotiations last year that almost forced USC to temporarily play at rival UCLA's Pasadena Rose Bowl. When USC offered to buy into the coliseum's ownership, the commission not only refused, but threatened to evict the university as
a tenant. USC, frustrated with the government's inaction at the stadium's obvious disrepair, offered $100 million to help renovate (and partially own) the coliseum. Denham argues that the Trojans are the biggest stakeholders in the stadium and its future and should therefore have the right to own part or all of it.


Denham also reflects the growing confusion on the part of both lawmakers and the sports industry, as to why the debt-laden tripartite government "monster" would refuse a private investment for public gain. The Coliseum had hopes for outside intervention back in 2006 when Los Angeles bid to host the 2016 Olympic games - a US designation that was quickly and cruelly lost to Chicago. And for years politicians and developers alike have been struggling to attract a major league football team to return to the coliseum. But since the news of the cheaper and flashier stadium in City of Industry, that struggle has been rendered moot. Bottom line: the coliseum is a beautiful and much beloved historic landmark, but it is structurally unsafe and aesthetically dejected, and the public sector (all three of 'em) cannot afford to hold onto it, especially in these times.