Mayor To Get $500K For Sale Of Calif. Buildings

SACRAMENTO, Calif. (AP) -- Santa Ana Mayor Miguel Pulido stands to receive a $500,000 "finder's fee" if the sale of 24 state buildings goes through to a group of private investors, according to court documents.

The arrangement with Pulido was uncovered during a deposition of State Treasurer Bill Lockyer last week by attorneys for opponents of the building sale.

Two former building authority commissioners who were ousted by Gov. Arnold Schwarzenegger after they raised questions about the sale are suing to stop the transaction to a group of private investors. A hearing is scheduled for Friday in San Francisco Superior Court.

Lockyer said he was told by an attorney that Pulido would receive a "finder's fee" if the deal goes through, but he did not know who would pay the fee.

Pulido told the Los Angeles Times on Monday that it was a "success fee" for introducing several of the companies to each other. He said the companies approached him for his assistance because "I just know a lot of folks."

"Our bid was $230 million above the next-highest bid," Pulido said. "If that is the case, I am part of the team that helps California and I am proud of it."

Joseph Cotchett, the attorney representing the sale's opponents, said the proposed payment raises serious questions about the deal. The lawsuit claims the sale is unconstitutional and a waste of public funds.

"It's all public money involved. How do you give finder's fees?" Cotchett said. "It should be an arms-length economic transaction that is beneficial to the state of California and taxpayers."

The Department of General Services is selling the buildings for $2.3 billion to California First LLC, a partnership led by Hines, a Texas real estate firm, and Antarctica Capital Real Estate, or ACRE, a private equity firm based in Irvine. The sale is expected to generate more than $1.2 billion in the current fiscal year for the state's general fund.

About $1 billion from the sale will be used to pay off bonds on the office buildings.

Several reports have raised questions about the long-term benefit of the sale. According to the nonpartisan Legislative Analyst's Office, the plan to sell state office buildings will cost taxpayers $1.4 billion over 35 years.

(Copyright 2010 by The Associated Press.  All Rights Reserved.)