Part of the Bay Area News Group

Was the state collecting all the rent it was due?

By Josh Richman
Wednesday, July 21st, 2010 at 3:36 pm in California State Senate, Dave Cogdill.

A state lawmaker used an East Bay example today to illustrate his request an investigation into whether the State Lands Commission has failed to collect fair market value in rent for publicly-owned lands held in trust, even during the height of the real-estate boom.

Dave CogdillState Sen. Dave Cogdill, R-Modesto, sent a letter asking that the Joint Legislative Audit Committee (of which he’s a member) authorize the State Auditor to examine the issue.

“The State Lands Commission, effectively the state’s landlord for publicly-owned properties, may have been shortchanging California taxpayers for decades by charging tenants rock-bottom rent for prime properties, even during the height of the real estate boom,” Cogdill, who chairs the Senate Select Committee on Surplus Property, said in a news release.

A 1984 state audit recommended that the Commission change how it collects rent and appraises properties, yet there has been no follow-up to verify that those changes were made, he said.

As an example he cited USS-POSCO, a steel company that continued to occupy 490 acres of state-owned land in Pittsburg for 12 years after the lease expired. The property originally was leased at $235,137 per year, but the Commission only collected a total of $66,784 in back rent during the 12 year period even as California’s land prices peaked.

Cogdill, who formerly owned a real-estate appraisal business, also says a formula the Commission uses to calculate lease rates hasn’t been updated since 1980.

“Considering these are just a few examples of mismanagement out of the 4.5 million acres of public land managed by the State Lands Commission, potentially millions in taxpayer dollars have been lost,” he said. “Ensuring the state collects fair market value in rent for our taxpayer-owned properties plays a vital and timely role in easing our state’s continued budget crisis.”

The Joint Legislative Audit Committee will vote at its Aug. 4 hearing on whether to approve Cogdill’s audit request.

[You can leave a response, or trackback from your own site.]