III. Reasons for the Proposed Sale

Verizon states that the sale of the Property at One Verizon Way is designed to improve efficiency by consolidating Verizon's operations to available office space in other buildings owned or leased by Verizon. According to Verizon, the Property is expensive to operate and is not fully utilized. The sale will enable Verizon to minimize office space expenses by relocating employees at One Verizon Way to other less costly buildings in the Thousand Oaks area that currently have available capacity. Verizon plans to redeploy its work force by selling the Property to Baxter and consolidating employees located at the Property to available office space at Verizon's Lakeview Canyon Road facility, which is across the street from One Verizon Way, and to leased facilities on Ventu Park Road, Newbury Park, five miles from One Verizon Way. After the sale, Verizon's facility at Lakeview Canyon Road will serve as the regional headquarters building for Verizon.

Verizon's application states that the sale to Baxter allows it to sell the Property at a favorable price in a strong real estate market and that the purchase price is consistent with the current fair market value of the property. Based upon the Property's estimated fair market value on August 10, 2001, the purchase price is consistent with the current fair market value.² Verizon also notes that it has negotiated the sale without the services and fees of a real estate broker, thus incurring lower transaction costs from the sale.

Verizon contends that the sale will benefit California by allowing Baxter to expand its presence in California, thus creating jobs and improving the local economy. Further, the sale does not adversely affect the local economy because Verizon will relocate its employees to other local offices and maintain its headquarters presence in Thousand Oaks and Ventura County.

Verizon maintains there will be no disruption in service to its customers because it will implement a staged relocation to allow all departments currently housed at One Verizon Way to continue providing their services on a seamless basis. Prior to closing, Baxter will occupy a portion of the main building under the Lease agreement. Baxter has the option to extend the Lease beyond July 1, 2002, if the Commission has not yet approved the sale. If the parties close the sale on July 1, 2002 as expected, Baxter will take ownership of the Property but Verizon will lease back a portion of the building, as well as the separate vehicle maintenance facility, for a term of four years and eleven months. Verizon may vary the amount of space it leases, but will initially lease at least 75,000 square feet and may be entitled to at least 100,000 square feet.