HuffPo-

For sale: historic buildings with reliable tenants.

 

Arizona lawmakers, desperate for cash, are considering selling the House and Senate buildings, then leasing them back over several years before assuming ownership again.

 

Dozens of other state buildings may also be sold off and leased back as the state grapples with a huge budget deficit.

 

Under the complex financial arrangement, state government services would continue without interruption while the state picks up a cash infusion estimated at $735 million.

 

For investors, the deal means long-term lease payments from a stable source.

 

The state's budget shortfall is projected at around $3.4 billion.

HuffPo-

 

I'm sure the government knows what it's doing, they're really good with numbers and selling things.

HuffPo-

So, in order to plug a budget hole, they are going to put themselves over a barrel and become renters? WTF?

 

The state of Arizona must have some real estate or hard assets they could sell if they were that deperate, that they can function without, and that they don't have to rent back.

 

honestly, conservatives should embrace this.

 

they favor smaller government, and a quick way to reduce the size/scope of government, is to sell off things that they own/manage.

 

(parking meters, tollways, buildings, etc)

 

so if Arizona does this, they just reduced the size of their government, probably reduced some government workers too and moved those jobs into the private space.

Are they really that desperate though?

honestly, conservatives should embrace this.

 

they favor smaller government, and a quick way to reduce the size/scope of government, is to sell off things that they own/manage.

 

(parking meters, tollways, buildings, etc)

 

so if Arizona does this, they just reduced the size of their government, probably reduced some government workers too and moved those jobs into the private space.

There is fiscally conservative, and then there is fiscally moronic. This falls into the latter category.

 

Are they really that desperate though?

"The finger thing means the taxes!"

Maybe the buildings have a leaky roof? Or the water heater just went out. I mean, if you rent, the landlord takes care of all that. Suuure, you don't have any equity, but, c'mon, the State of Arizona isn't looking to settle down right now and probably bit off a little more than it could chew, anyway. In fact, I bet Arizona was pre-approved for AT LEAST $2 billion, but as we know, what you are pre-approved for and what you can actually afford are two separate things.

 

/green

There is fiscally conservative, and then there is fiscally moronic. This falls into the latter category.

 

its cash flow too... maybe they want to get out of long-term debt obligations that they currently have. (if there is a mortgage on the property) eliminate say a $50k/mo mortgage payment for the next 20 years, to take on a $30k/mo rent payment instead. Cash flow savings $20k/mo.

 

 

PR to show the voters what shape the government is in. Perhaps there will be a proposal for a .05% increase in the state income tax or some silly thing like that.

its cash flow too... maybe they want to get out of long-term debt obligations that they currently have. (if there is a mortgage on the property) eliminate say a $50k/mo mortgage payment for the next 20 years, to take on a $30k/mo rent payment instead. Cash flow savings $20k/mo.

You think they have a mortgage on the capitol? I highly doubt that.

 

You think they have a mortgage on the capitol? I highly doubt that.

 

they may not have a mortgage, but they may have some sort of capital improvement bonds/building bonds, etc. They could retire that debt, take the bond payments off the books, get a cash infusion, and move the cost of renting the building to an "operating" expense.

 

Actually, I'm nearly 100% positive that they do. According to Moody's.

 

Government Office Lease Revenue Refunding Bonds(Capital Mall L.L.C. Project) Series 2005

 

Sale Date: 27 SEP 2005 Sale Amt: 87.65

 

Description Rating Rating Date Last Rating Action Watch Status

 

Insured A1 13 APR 2009 RATING AFFIRMATION Not on watch

 

Underlying A1 22 APR 2009 RATING AFFIRMATION Not on watch

 

 

Arizona Government Office Lease Revenue Bonds (Capitol Mall L.L.C. Project), Series 2000

 

Sale Date: 14 NOV 2000 Sale Amt: 89.78

 

Description Rating Rating Date Last Rating Action Watch Status

 

Insured A1 13 APR 2009 RATING AFFIRMATION Not on watch

 

Underlying A1 22 APR 2009 RATING AFFIRMATION Not on watch

 

 

 

they may not have a mortgage, but they may have some sort of capital improvement bonds/building bonds, etc. They could retire that debt, take the bond payments off the books, get a cash infusion, and move the cost of renting the building to an "operating" expense.

 

Actually, I'm nearly 100% positive that they do. According to Moody's.

 

Government Office Lease Revenue Refunding Bonds(Capital Mall L.L.C. Project) Series 2005

 

Sale Date: 27 SEP 2005 Sale Amt: 87.65

 

Description Rating Rating Date Last Rating Action Watch Status

 

Insured A1 13 APR 2009 RATING AFFIRMATION Not on watch

 

Underlying A1 22 APR 2009 RATING AFFIRMATION Not on watch

 

 

Arizona Government Office Lease Revenue Bonds (Capitol Mall L.L.C. Project), Series 2000

 

Sale Date: 14 NOV 2000 Sale Amt: 89.78

 

Description Rating Rating Date Last Rating Action Watch Status

 

Insured A1 13 APR 2009 RATING AFFIRMATION Not on watch

 

Underlying A1 22 APR 2009 RATING AFFIRMATION Not on watch

That looks like bonds for paying for new office space somewhere around the capitol, not the capitol itself.

 

And those bonds would be much smaller than the amount of value of the land and buildings of the capitol anyway. Its an incredibly stupid move.