Can real estate agents save the Seattle Times Co. from bankers? The company this week was said to be very close to finding buyers for four-plus acres of land in the South Lake Union neighborhood — deals that would bring in badly needed cash to keep the newspaper company in good standing with lenders.
Times Co. officials have issued gloomy pronouncements in recent months, including a sworn affidavit in July by Senior Vice President Chuck Cochrane in federal court in Maine which said the company faced default and "dire consequences" by the end of September if it couldn't raise new cash to meet loan covenants. But Century Pacific real estate broker Steven Wood, who has been handling the Times' effort to sell two pieces of property near its headquarters since August, says the company has found buyers who will be paying a "considerably better" price than the $32 million total assessed valuation. Perhaps coincidentally, Wood says, the company had been hoping to sign up buyers for the parcels by tomorrow, Oct. 1.
Wood told Crosscut the sale "is moving along as planned" and would likely be announced in early December and closed by year's end. He wouldn't disclose the sale price for the parcels, which are near Amazon's new world headquarters, but said, "It's great real estate and went within the range we were thinking about."
The Seattle Times Co. is privately held, controlled by the Seattle-area Blethen family, which does not disclose internal financial details. Outsiders probably won't learn the sale price for the parcels until McClatchy Co., which holds the 49.5% minority stake in the Times Co. and is publicly traded, makes its fourth quarter federal securities filing. But the cash from the Times Co. real estate sale will go toward paying down the company's loans, including $230 million it borrowed a decade ago to buy the Blethen Maine chain and money it borrowed last year for a $24 million settlement with Hearst Corp., owner of the jointly published Seattle Post-Intelligencer.
The Maine chain — the Portland Press Herald and Maine Sunday Telegram, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville, and MaineToday.com — is losing money. The chain has been for sale since March, and Times Co. officials have told local union officials in Maine that their bankers have been pressing the company to find a buyer. A cash infusion from the South Lake Union real estate sale would lower the Times Co.'s remaining debt, stabilize its cash-to-debt leverage ratio, and presumably pacifiy bankers.
Seattle Times Co. spokeswoman Jill Mackie declined to comment on what impact an impending sale of the South Lake Union properties would have on the company's finances. "As a private company," Mackie said in an e-mail to Crosscut, "we don't comment publicly on specifics related to our financial circumstances." In addition to the Blethen Maine chain and The Seattle Times, the Times Co. owns the Yakima Herald-Republic, the Walla Walla Union-Bulletin, NWsource.com, Rotary Offset Press in Kent, Wash., and about five acres of additional real estate in the South Lake Union area.
Meanwhile, the Times Co. settled a labor dispute in Seattle with Teamsters Local 174, which had threatened to strike over the company's plan to outsource 74 union drivers to independent contractor Penske Logistics. The Teamsters voted by a 93 percent margin to accept the outsourcing, which would include union representation for the outsourced drivers. The Times and P-I are also negotiating with the Pacific Northwest Newspaper Guild, whose contract with the papers expired July 25.