State Fails As Landlord

PHI for rent sign 072011
NBC Philadelphia

Landlords. Chances are if you don't have one now, you've had one in the past. I do and his job is simple. Make sure the lease is current and collect the rent when it's due.

I don't pay, I get kicked out.

When it's time for a lease renewal the landlord takes a look at the current real estate market and  makes adjustments (usually upward) for the next lease agreement.

The state of California operates with its tenants in much the same way. The tenants are the companies that lease land from the state in order to conduct business.

The landlord? That would be the State Lands Commission.

An audit by the state released this week shows the landlord hasn't been keeping up with the job.

Over time California has lost many millions of dollars in rents that haven't been collected from tenants who do business on land the state owns. Some 4 million acres in all.

It's a grim reality, considering the state has been slashing budgets from social services to schools and prisons.

That's not likely to sit well with those who've been fighting a losing battle to keep programs like those in place.

So what's behind the breakdown? Ironically, budget cuts are a big part of the problem.

Some of those cuts have come at the expense of the State Lands Commission.

Twenty years ago the Commission had 242 people on staff, many of whom spent their time tending to the leases.

Today they have 63.

Sisxty three people trying to keep track of more than 4,000 leases.

Among that 4,000: land leased to a gas company that hasn't paid its rent for five years, and land leased to an oil company that's been paying the same amount since their lease with the state expired sixteen years ago.

Then there's a resort that hasn't paid for the rent on its coastal parcel in 22 years.

One of the most egregious examples is Dow Chemical. The giant company that hasn't paid any rent for the past 17 years.

These are just a few examples.

The question is, what's being done about it?

Lt. Governor Gavin Newsome called the situation "unacceptable" and State Controller John Chiang says he'll work to fix the problem. AS it happens they both service on the lands commission, so they're partly to blame for this mess.

Curtis Fossum, executive director of the commission, points out that despite the mutiple oversights. his department brought in about $400 million in revenues last year.

Imagine how much went uncollected.

At a time when budgets for school and social programs continue to be slashed, the landlord's job is more important than ever.

Time to start knocking on doors.

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