If you've been itching to take advantage of the state's budget crunch to get your hands on a public building at bargain-basement prices, don't hold your breath.
Alan Ecker of the state Department of Administration said Monday that the "sale" of $735 million of state property just won't happen that way.
But you may be able to make some money.
The directive to sell property came as part of a plan enacted by the Legislature and signed by Gov. Jan Brewer plan to balance the current budget. The idea was to get the state an immediate infusion of cash.
But Ecker said there won't be any sort of building-by-building auction. In fact, it won't even be possible to buy just a single property.
Instead, the state hopes to sell the buildings in a single transaction. It will then be up to bond dealers to package that and sell what essentially are shares of that whole package.
Put another way, if you had $1 million you could buy that much worth of state buildings.
But it's not like you'd get half the first floor of a prison or anything like that. You'd get 1/735 of the package.
More to the point, you wouldn't actually be buying anything.
Ecker said the "sale" actually entitles borrowing money more than anything else.
The deal is structured so the state would promise to lease back the buildings over the next 20 years, making payments to the "owners" over that period. It is only if the state defaults on the rent that actual possession of the building would go to the buyers.
But if all goes as planned, at the end of 20 years the state would again take full title to the buildings, unencumbered by debt, and you'd have your $1 million back, plus whatever interest rate was negotiated.
Ecker said the plan is to have a final list of the properties that would be included in the package later this month.
He said the state could sell the entire package off in January or, if market conditions suggest, sell only part of it then and wait to sell the rest.
