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The strange case of Washington's newest newspaper publisher

What do foreclosure notices and publishing community newspapers have to do with each other? Quite a bit, particularly for a publisher of three Washington papers.

Many newspapers are scaling back operations.

Many newspapers are scaling back operations.

Community newspapers, those familiar once- or twice-weekly papers that line family scrapbooks with tales of athletic glory, county-fair ribbons and Main Street parades, are as much a part of the region's history as courthouse statues and church steeples. A newspaper was often among the very first businesses in a new town.

In the past two decades these small publications have created online editions as a rearguard defense against the Internet, merged and sold to corporate publishers, and in a few cases closed their doors forever. Somehow, most survive and some even prosper, but it's always a sometime thing and good news can become bad news in a financial as well as journalistic sense.

That might be the case with Washington's newest publisher, attorney Stephen Routh, who runs the West's largest foreclosure-services business from offices in Bellevue. Routh also runs RIM Publications , through which he has purchased five small community papers, three in Washington.

He says he wants to add more newspapers to his collection, and that has gained the attention of regional publishers. Always wary of changes in their embattled ranks, they have perquisites to protect in the field of legal notices, a system dating to a time when newspapers were the dominant form of mass media. Routh makes no bones about his purpose in purchasing the small papers: to legally game a system that to him makes no sense in the Internet era.

For Routh, and for some small papers, the bad news of the housing crash and subsequent foreclosure boom has — financially — been good news. Routh is the go-to guy for lenders trying to unload foreclosures. His Northwest Trustee Services Inc. and associated firms created a vertically integrated model that processes foreclosures for lenders, providing legal and escrow services, process serving, property management, even auctioneers. In the last two years, Routh has begun closing the final link in the chain — the community newspapers that publish legally required notices of foreclosure.

Foreclosures are big business and Routh is the biggest operator in the region; his companies employ about 1,000 people, including 51 lawyers in seven western states; in his peak year (2009) he handled about 48,000 foreclosures. Every one had to be advertised in a newspaper of general circulation in the county where the foreclosure was taking place.

The price for these notices, long columns of dense property descriptions and legalese, could be as low as $300 or as high as $2,000 on a typical residential foreclosure, depending on the size of the newspaper and competition within the county. The requirement for publication is a boon for small papers in big counties. For instance, a small paper in Pierce County charges less for a foreclosure ad than the Tacoma daily, but it only delivers a few thousand readers, practically none of whom are looking for foreclosed property to buy. But the legal publication requirement is met.

"This is a waste of money and it doesn't make any sense," Routh told me in a telephone interview. "The huge majority of people get their news (about foreclosures) not from dry legal ads but from the Internet."

Forced to work with a system that he believes is obsolete, Routh in the last two years has purchased three small Washington papers in three large counties: the Eatonville Dispatch in Pierce County, the Capitol Hill Times in Seattle and the Monroe Monitor & Valley News in Snohomish County; total circulation: 17,950 in an area with 3.4 million people. RIM also has bought small papers in the Boise suburb of Kuna-Melba and on Maui, Hawaii.

Foreclosures notices for Northwest Trustee Services Inc. are already being printed in those papers, resulting in bulky special sections wrapped in with a small news section. Online, these RIM newspapers may carry more than 100 foreclosure notices, vastly overshadowing their news coverage.


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Comments:

Posted Tue, Jan 31, 7:28 a.m. Inappropriate

"Canadian press mogul, Conrad Black" is a felon in a Miami federal prison. Canadian newspaper owner DAVID Black (no relation), on the other hand, owns Sound Publishing.

See Conrad Black (http://en.wikipedia.org/wiki/Conrad_Black)
See David Black (http://en.wikipedia.org/wiki/David_Holmes_Black)

Posted Tue, Jan 31, 8:31 a.m. Inappropriate

Oh, man, I booted that one!! My deep apologies to David Black (and readers)

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