Condos at San Quentin? California's broke and wants to hold a bake sale

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In a desperate move to balance California's budget, Governor Schwartzenegger has proposed selling off several iconic state-owned properties, including San Quentin prison, the Los Angeles Memorial Colosseum, Daly City's Cow Palace, and other valuable holdings.

Estimates of the value of these properties vary widely. San Quentin, for example, sits on prime ocean-front real estate, and could be an ideal spot for condominiums. According to some analysts, it could be worth up to $2 billion. The LA Memorial Colosseum, on the other hand, has a 25-year contract to host football games for the University of Southern California, which means that the owners would have a hard time turning a profit on the estimated $400 million purchase price.

On one level, this is hardly a surprising move. After all, when harried homeowners find themselves stretching to make ends meet, one of the first solutions that often comes to mind is selling things. Just as a rarely-used set of golf clubs or an old exercise bike can often fetch a few extra dollars, so can an old prison or a football stadium. Granted, this isn't a very effective long-term solution, but it can quickly raise money in a pinch.

Admittedly, selling San Quentin or the Los Angeles Memorial Colosseum is shortsighted, particularly given that jail space that is sold off today will have to be replaced tomorrow. Moreover, getting rid of prime real estate in today's depressed market pretty much guarantees that California will be getting fire sale prices for its properties. However, if these sales can shore up the state's finances now, then they will immediately put both California and the Governor on firmer footing.

In all likelihood, however, Schwartzenegger's plan is the next step in a game of chicken that he is playing with his constituents. With three unpopular budget-balancing measures coming up for a vote on May 19, it seems like there may be another option open to the state. However, these moves, which include deep budget cuts, delays on needed repairs, and increased borrowing, are currently trailing in the polls. If the governor can convince California's voters that they face a choice between selling off state property and making tough choices to balance the budget, then maybe they will get behind the current proposals.

And if not? Well, there's always room for a few more beachfront condos on the space formerly known as San Quentin.
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