ALAMEDA, Calif. - The California Supreme Court late Tuesday refused Gov. Arnold Schwarzenegger’s request to expedite action on the lawsuit that stalled his plans to sell 11 state office properties to private investors, then lease them back.
The high court’s denial leaves the case in the hands of an appeals court, which has already imposed a stay blocking the deal from closing until at least Jan. 26, when it has scheduled oral arguments.
The state announced in October an agreement to sell the 11 buildings to a consortium of investors led by privately owned real estate firm Hines and private-equity firm Antarctica Capital Real Estate for $2.33 billion.
The sale was structured to bring in about $1.2 billion to help close this year’s state general fund deficit, after the redemption or defeasance of about $1 billion of tax-exempt lease-revenue debt used to finance the buildings.
In November, opponents of the transaction filed suit.
By refusing to hear the case, the Supreme Court has guaranteed that the sale will not close before Schwarzenegger leaves office next Monday. Governor-elect Jerry Brown has not said if he intends to proceed with the transaction.
Schwarzenegger first proposed the sale and lease-back in May 2009. Some lawmakers criticized the proposal, but the plan was included when the Legislature adopted the fiscal 2011 budget.
