The McClatchy Co. has sold its waterfront property in downtown Miami for $236 million, as the newspaper publisher divests some real-estate assets to bolster its financial health.
McClatchy, which is the parent corporation of The News & Observer, will use most of the money to fund its pension plan. That will free up more future profits to continue repaying the company's massive debt.
Bond-rating agency Moody's raised its outlook on McClatchy's $1.75 billion of debt to positive from stable after the news.
And McClatchy's shares rose 19 cents to close at $2.95. The stock is still down 37 percent this year.
The 14 acres on Biscayne Bay has been the home of the Miami Herald since 1963. The Miami media operations, including Spanish-language El Nuevo Herald, will remain in the same spot rent free for about two years while a new headquarters is located.
McClatchy sold the Miami property to Genting, a Malaysian-based developer of casinos and resorts. The project will be called Resorts World Miami and will include a hotel, convention space, restaurants, retail and some sort of residential component, the Miami Herald reported.
"While locating newspaper operations on the bay may have made sense in the past, it no longer is the best fit," McClatchy CEO Gary Pruitt said in a prepared statement.
McClatchy inherited the property and the Miami Herald when it bought the Knight Ridder chain in 2006. That deal also increased McClatchy's debt, a burden that became harder to manage as the economic downturn hurt advertising revenue.
McClatchy has been trying to sell the property for several years, but interest diminished with as the recession rocked Florida's real-estate market.
In a memo to McClatchy employees, Pruitt noted that "in some markets, it no longer makes sense to own acres of downtown real estate or buildings designed for newspaper operations of a generation ago."
In January, McClatchy transferred ownership of the land and property of seven newspapers to its pension fund, including the Charlotte Observer, Rock Hill Herald and the Myrtle Beach Sun-News.
McClatchy owns 30 daily newspapers across the country, as well as other publications.
Assistant Business Editor Alan M. Wolf joined the N&O in 1999 covering the business of health care. He became an editor in 2001, and helps oversee the paper's daily business coverage and Sunday Work&Money section. He lives in Clayton with his wife and two children. Reach him at 919-829-4572 or
Comments
The Miami Herald
Fri, 05/27/2011 - 23:26 — perchanceJohn S. (Jack) Knight, had the five-story building erected on the site without prior knowledge of brother Jim, his partner in the Knight Newspaper chain. The dock behind the building allowed newsprint to be delivered to the Herald by barge. It was also put to good use by some employees as a fishing spot.
Between the building and Biscayne Boulevard was a parking area and a one-block street, a photo of which was published every year in the paper with the explanation that it was private property, which ensured that it would not be considered in the public domain.
Down Sizing
Fri, 05/27/2011 - 08:45 — Walt_in_DurhamI suspect the Miami Herald will go all digital in a couple of years when their occupancy of the waterfront property is up. People no longer are willing to pay for the news that Drescher and his ilk have slanted. We can get less biased reporting online from a multitude of sources.
Walt-in-Durham
Nice
Fri, 05/27/2011 - 09:11 — will1973You'd like to think people will be losing jobs because of a slant so hope you feel good about it but the real reason is because media is online now and its free.
Downsizing ....
Fri, 05/27/2011 - 08:25 — AgentPierceAt the rate McClatchey is downsizing across the country; the red-ink stained dinosaur will soon be operating out of the backroom of a pool hall in a Sacramento strip center.