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.