CalPERS sued over details of failed property investment

The First Amendment Coalition (FAC) said CalPERS' investment in Page Mill Properties was controversial both because of the total loss of its stake in the now-bankrupt firm and because of allegations by community groups that the company's management sought to oust low-rent tenants in order to increase cash flow needed to finance its heavy debt.

FAC has filed a suit in the San Francisco Superior Court demanding access under the Public Records Act to records shedding light on the factors influencing CalPERS' financial commitment in 2006 to the Page Mill Properties II project.

FAC initially submitted a record request in January, but claimed that although CalPERS turned over other records, it withheld the offering memorandum and partnership agreement for the deal, as well as internal emails and other relevant communications.

FAC executive director Peter Scheer said: "The public has an overriding interest in learning how CalPERS could have determined that Page Mill, despite the ouster of poor tenants, the high debt levels and other risks, was an appropriate investment for CalPERS' assets.

"Only by understanding how the investment was made can the public be confident that CalPERS has made sufficient changes to prevent this from happening again."

Last week CalPERS recorded an 11.4% return in the year to June 30 together with a 37% fall in its property assets (Global Pensions; July 5 2010).

CalPERS was unavailable for comment.