August 31, 2021

The Tampa Bay Times will get a $21 million cash infusion after selling its former printing plant and the 27 acres it sits on in a deal announced Tuesday.

The buyer is Twenty Lake Holdings, a commercial real estate subsidiary of hedge fund Alden Global Capital. Alden has gained notoriety in recent years for aggressively seeking acquisitions in the newspaper industry — most recently when it bought Tribune Publishing in May — then drastically cutting newsrooms and other costs.

This, however, appears to be just a real estate transaction. The Times has cleared out the printing equipment, which has been sold for scrap. It plans to lease back for newspaper distribution a smaller building on the site. The Times said that the buyer intends to use the cavernous main building as a warehouse.

So the sale does not buy any entree into the Times’s independent local ownership by Poynter, established in 1975 by Nelson Poynter, who left it his ownership stake in the paper when he died in 1978. The Times has never been for sale and fended off a takeover bid from Bass family companies of Texas in the 1980s.

The Times suffered sharp advertising revenue losses in recent years like the rest of the industry and, as a result, incrementally took on and refinanced debt. The sale will allow the company to significantly reduce that burden, including satisfying debt owed to a group of eight local individuals — including Paul Tash, Times CEO and Times and Poynter chairman — who initially had put up $15 million in loans.

Times president Conan Gallaty emailed, “We are pleased with the price for the property and consider this a very good result. We were fortunate to be selling a great location at a time of peak interest in light industrial real estate.” The large tract is on a central St. Petersburg thoroughfare and near an interstate highway.

Gallaty added that a smaller share of the proceeds will go to pension plan contributions. Another financial implication, Gallaty said, is that “this will give us more flexibility to reinvest in our business with earnings we generate while we service the quarter of (term) debt that remains. Also, we eliminate carrying costs on the facility which helps improve our operating income.”

The Times closed the plant in March, outsourcing printing to a Gannett facility in Lakeland, 60 miles away.

A year earlier it switched from offering a printed paper seven days a week to just two — Wednesdays and Sundays. The Times asked print readers to rely on its digital site or, more likely, an e-edition, laid out in print fashion with late-closing news like evening sports results.

Both print outsourcing and real estate sales have been widespread industry trends, accelerating since fresh financial setbacks such as COVID-19 disrupted local businesses and their advertising.

I asked but was unable to get a comment from Alden.

As I and others have written, real estate sales are integral to Alden’s playbook for realizing value from what it buys, not just at its newspaper holdings, but in other kinds of companies it has come to own like Payless Shoes and Fred’s Pharmacy.

By design, the hedge fund has advantages of scale and expertise in commercial real estate compared to newspapers or local commercial buyers.

Elsewhere, former newspaper headquarters have sometimes given way to exotic reuse plans, like a hotel-casino on bayfront land vacated by the Miami Herald or a multi-deck driving range complex at the former home of The Times-Picayune in New Orleans.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
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