Taxpayers Could End Up Paying $4 Million In Building Rent Debacle

SACRAMENTO COUNTY (CBS13) - There are new developments Tuesday on a case that CBS13 first reported on two years ago. It's a case that may end up costing taxpayers more than $4 million.

Security guard: I'm going to have to ask you to stop filming.

Photographer: Don't touch the camera.

Guard: Then stop filming please, stop filming.

Photographer: I do not have to stop filming at all.

This confrontation from 2010 occurred when a security guard tried to prevent us from showing the empty office building costing California taxpayers 1.3 million a year in annual rent. The building at Mather Business Park was vacant for two years, costing taxpayers a total of $2.6 million.

The empty building was leased by Edfund, a now defunct contractor that previously ran the loan program for the Student Aid Commission, as we showed you two years ago.

"Please leave. And if you don't, we will call the police and escort you off," said an Edfund lawyer during our first story.

Edfund is now out of business, leaving behind a multi-year lease and a lawsuit filed by the building owners demanding $40 million in unpaid rent.

The California state senate has already approved a settlement worth $4.2 million to pay off the building owners. Paying ten cents on the dollar may be the cheapest way to get rid of an expensive lawsuit, but critics say it's $4 million taxpayers will never see again.

"The bottom line is that's money that could be going for essential programs. And they should be obeying the law and not wasting money," said Jon Coupal at the Howard Jarvis Taxpayer Association.

Now it's up to the state assembly to approve the settlement. And not just on this case, but on several other claims that amount to $12.9 million.