In recent weeks, I’ve heard persistent rumors passed along by friends in the Seattle business community that the Seattle Times is interested in selling its main building at 1120 John Street, where its newsroom is housed, along with the entirety of its South Lake Union properties. The Times owns 10 acres in South Lake Union, and the idea is that the Times would use the influx of quick cash generated by such a sale to pay down it’s crushing debt, while leasing the space it needs back from its new owners.
Given that the New York Times is reportedly close to completing a similar sell-lease deal for its Midtown Manhattan headquarters (which is expected to raise about $225 million in cash for the ailing paper of record), and given the very difficult state of the Seattle Times finances, the rumors sounded plausible to me. However, Times spokesperson Jill Mackie knocked it down when I asked. “We do have properties in South Lake Union on the market, but not our headquarters building,” she wrote in an e-mail.
I had also heard an interesting rumor a couple of weeks ago that ex-Microsoft billionaire Paul Allen had been offered a chance to buy all of the Times’ properties in South Lake Union, including its headquarters building. This was an updated version of a set of elaborate and widespread—though apparently false—rumors that spread in the immediate wake of Hearst’s announcement that it was moving to shut down the P-I.
Those prior rumors had various iterations, but boiled down to this: Allen would buy up the Times as Hearst shuttered the P-I and purchased Dallas-based Belo Corporation, which owns King 5 in Seattle. Belo quickly denied any purchase by Hearst was in the works, and last week David Postman, the former Times chief political reporter who now flacks for Paul Allen’s real estate company, Vulcan, told me flatly that Allen has no interest in buying either the Times or the P-I. Moreover, a friend with strong connections to the local business community reported hearing that talks of a real estate deal between Vulcan and the Seattle Times have been dormant for several months now.
But, even if the Times headquarters is not for sale now, did the Times recently offer Allen a chance to buy all of its SLU holdings, including the Times building? Postman would not go there with me, saying that Vulcan never comments publicly on its private discussions about possible real estate deals.
As has already been widely reported, for months the Times has been trying to sell two of the South Lake Union parcels it owns, totaling about five acres, or about half of its total SLU property. The Times is also desperate to unload its Maine newspaper holdings as well, in an effort to raise cash to meet a $91 million debt obligation. The Times had hoped to complete those sales before the first of the year, but with the newspaper and real estate markets tanking has been unable to do so.
Mackie, the Times’ spokesperson, suggested that talk of the Times selling its headquarters and leasing it back may be a case of mistaken identity. The Times property at 1000 Denny Way, which houses the Times’ new media, advertising and circulation departments, is part of the five acres that are know to be for sale, and the Times is looking for a sell-lease arrangement regarding that property. “If sold we would lease some space [there] for a period of time at least. Having reduced our staffing levels, our space demands are less than they have been in the past,” Mackie wrote. That could explain what I'm hearing, but I remain more than a little suspicious that something more is going on.
Bottom line: Taking Mackie at her word, it does not appear that the Times’ main building is currently for sale. But were all of the Times’ SLU properties offered up to possible buyers at some point in the recent past, or has the Times put out feelers that it would be willing to entertain such an offer? To my mind, that’s less clear. One thing that is certain, though, is that while the P-I teeters on the brink of oblivion, the Times is in very serious trouble as well. There is no question there are a lot of maneuverings going on behind the scenes. We’ll just have to stay tuned to see how they play out.