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City officials are eyeing state buildings in Sacramento as a potential source of local property tax revenue. A public affairs official with the state’s Department of General Services confirmed with The Sacramento Press on Thursday that it is moving forward with plans to sell some state-owned buildings in the city.

Sacramento does not receive property tax from state-owned buildings. But if the crisis-ridden state government sells the buildings it owns to private entities, property tax monies would flow to the city as well as to other local governments, such as the county and school districts, according to Assistant City Manager John Dangberg. 

Mayor Kevin Johnson and the city manager support the planned sale. Johnson noted in a phone interview that if the state sold some its buildings, it would help its “cash-flow problem.”  There are advantages and disadvantages to being the state capital; one disadvantage is the state’s ownership of some of downtown’s prime real estate, Johnson said.

Dangberg said the state needs to make its own decisions about the economic viability of selling its property. If the state sells its properties, the city “would want to be sure it was done in a manner that would allow us to collect property taxes,” he added.

Dangberg said he has talked about the state’s possible sale of Sacramento properties with Zach Miller, an official in the Real Estate Services Division of the state’s Department of General Services.

The Capitol Area Development Authority’s (CADA) role as a recipient of local property tax revenues adds another dimension to the issue. The city is examining the implications of the state’s possible sale of the Capitol Area East End Complex, which consists of five buildings and a parking facility at Capitol Avenue and N Street. The complex is in CADA’s jurisdiction, Dangberg pointed out. If the state sells the complex, CADA would receive all property tax revenues, he said.

In light of this, the city is trying to figure out if it can receive property taxes in areas under CADA jurisdiction, Dangberg said. He noted that the city provides police and fire services to the CADA area.

The state, meanwhile, appears to be seriously pursuing the sale of 17 buildings. The state plans to lease back the buildings after selling them. “Starting in the new year, we’re planning to market them aggressively,” said Jeffrey Young, deputy public affairs director for the Department of General Services. Details about the state’s plans to sell buildings -- including those in the city and county of Sacramento -- are featured prominently on the department’s website.

Kathleen Haley is a staff reporter for The Sacramento Press.