Short Of Cash, Arizona To Sell State Buildings

Arizona on Tuesday begins selling stakes in many of its public buildings — including prisons, the public safety headquarters and even state legislative buildings. The state will lease back the facilities in a plan to raise much-needed cash for the state. Officials hope to raise $735 million.

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Starting today, $5,000 will buy you a piece of Arizona's government. We're not talking about buying access to legislators here. We're talking about the buildings that they meet in. More than two dozen state buildings are for sale and that includes the House and Senate and the governor's office. NPR's Ted Robbins explains.

TED ROBBINS: It's a bit unusual to sell a state capital, state hospital, prisons and park visitor centers, but when you have a billion and a half dollar deficit to make up between now and July, Arizona Department of Administration spokesman Alan Ecker says you do unusual things.

Mr. ALAN ECKER (Spokesman, Arizona Department of Administration): The proceeds will be going to - straight into the Arizona state general fund to offset the budget crisis that we're dealing with.

ROBBINS: The total - $735 million, Arizona would then lease back the buildings over 20 years. Investors would buy $5,000 certificates of participation and get an estimated four to five percent interest a year. The question is, how safe is an investment in the state of Arizona? Its credit rating was downgraded just last month because of its budget crisis. But Alan Ecker says, in this case, we're talking about buildings which have to operate if Arizona remains a state.

Mr. ECKER: So the state would be very, very unlikely to ever default on payments and walk away from those facilities. So investors should have a strong peace of mind.

ROBBINS: Arizona is quickly running out of money, so it hopes to sell the certificates and close the deal by the end of the month.

Ted Robbins, NPR News, Tucson.

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