Schwarzenegger had filed an emergency appeal with the court last week, asking it to lift the stay before the end of the year.
The court, comprised in this case of appellate justices who stepped in after all seven members of the state high court recused themselves, issued a one-sentence denial late Tuesday.
The potential sale of buildings in San Francisco, Oakland, Santa Rosa, Sacramento and Los Angeles will now fall into the hands of Gov.-elect Jerry Brown, who takes office Jan. 3.
One of the buildings is the Supreme Court’s headquarters at the San Francisco State Building, which is presumably why the seven sitting Supreme Court justices disqualified themselves from the case.
“The state Supreme Court was the last chance for the Schwarzenegger administration to allow the sale to continue,” Anne Marie Murphy, an attorney for the plaintiffs, said today.
A temporary stay on the transaction was granted after three former state building officials filed a lawsuit claiming the sale to a group of private investors is an illegal gift and a waste of public funds.
The officials were fired by Schwarzenegger last spring.
Schwarzenegger has maintained that the sale is legal and necessary to help close the state’s budget gap.
The deal would provide $1.2 billion in revenue after $1.1 billion in building bonds and sale expenses is paid off, but the plaintiffs claim renting back the office space would cost the state much more in the long run.
A hearing on the case is scheduled for Jan. 26 before the California Court of Appeal in San Jose.
Brown has not publicly weighed in on the sale, but Murphy said that as attorney general, he declined to represent state in the sale.
“It is a hopeful sign, absolutely,” she said. “And it’s our hope that the Brown administration will put a quick end to the transaction.”
Ari Burack, Bay City News