Public Buildings and Property
![Public Buildings and Property](http://www.inthepublicinterest.org/sites/default/files/imagecache/sector_image/category_pictures/public bulding.jpg "The privatization of public buildings and property usually takes the form of sale-leaseback deals.  In these deals, the governmental entity "sells" the public property to a private company for a specified amount of time.  In exchange, the government receives a quick one-time infusion of cash.  Since the governmental entity typically needs to continue using the space, it will lease back the space from the private company for the duration of the contract.  Unfortunately, these deals are not in the public's best interest, as the governmental entity must pay the private contractor a considerably greater amount over the long-run than it received up-front from the sale.California recently rejected a sale-lease back deal, which would have sold 24 state-owned buildings to private investors at fire sale prices.  As the LA Times characterized the deal:"In the long run, the sale would shortchange taxpayers because the state would be required to lease back, for 20 years, the 7 million square feet of space it peddled for short-term gain. Calling it 'poor fiscal policy,' the nonpartisan legislative analyst has warned that the sale-leaseback ultimately would cost the state billions more than it initially gained." In The Public Interest's report, A Guide to Evaluating Public Asset Privatization, discusses key questions that should be asked when these types of privatization contracts are proposed.")
The privatization of public buildings and property usually takes the form of sale-leaseback deals. In these deals, the governmental entity "sells" the public property to a private company for a specified amount of time. In exchange, the government receives a quick one-time infusion of cash. Since the governmental entity typically needs to continue using the space, it will lease back the space from the private company for the duration of the contract. Unfortunately, these deals are not in the public's best interest, as the governmental entity must pay the private contractor a considerably greater amount over the long-run than it received up-front from the sale.
California recently rejected a sale-lease back deal, which would have sold 24 state-owned buildings to private investors at fire sale prices. As the LA Times characterized the deal:
"In the long run, the sale would shortchange taxpayers because the state would be required to lease back, for 20 years, the 7 million square feet of space it peddled for short-term gain. Calling it 'poor fiscal policy,' the nonpartisan legislative analyst has warned that the sale-leaseback ultimately would cost the state billions more than it initially gained."
In The Public Interest's report, A Guide to Evaluating Public Asset Privatization, discusses key questions that should be asked when these types of privatization contracts are proposed.
