Seattle Times to sell property

Wednesday, November 5, 2003

Seattle Times to sell property
Blethen cites 'ongoing financial challenges'

By DAN RICHMAN
SEATTLE POST-INTELLIGENCER REPORTER

Citing financial strains, The Seattle Times Co. is seeking to sell or develop about five acres of its South Lake Union land, roughly one-third of the newspaper company's Seattle real estate.

In a memo to employees Monday, Times Publisher Frank Blethen said the land was put on the market now because of the rise of biotech companies in the South Lake Union area and the city of Seattle's initiatives there.

"Assuming the right kind of transaction can be put together, we will be able to use some of the proceeds to meet our ongoing financial challenges," Blethen wrote. He had warned in a September memo that putting some of The Times' properties up for sale might be necessary because the paper's situation is "precarious and uncertain."

Eight properties, ranging up to a half-block in size, are now on the market. Two are bounded by Harrison Street, Boren Avenue North, Thomas Street and Terry Avenue North. One fronts Boren between Thomas and John. Three are bounded by John, Pontius Avenue North, Denny Way and Fairview Avenue North. Two more lie along John, between Minor and Pontius.

All but two of the properties are lots, most of them used only for parking. One property contains an unoccupied building once used by The Associated Press and now used for Times storage. Another houses some Times staffers.

The Times' main editorial building, and a separate building housing advertising and circulation services, are not for sale.

Vulcan Inc., the investment arm of Microsoft Corp. co-founder Paul Allen, owns between 52 and 53 acres in the South Lake Union area, some of which abut some Seattle Times Co. properties. Vulcan spokesman Michael Nank said the two companies "most likely" will meet but that no meeting is scheduled yet.

Real estate broker Steve Wood, of Century Pacific LP, will help The Times find buyers or developers for its properties, Times spokeswoman Kerry Coughlin said.

In his memo Monday, Blethen said The Times is also in the final stages of selling 34 acres in Renton. But that sale, even combined with revenue that may result from Monday's offering, may not prevent "further reductions" in the company's budgets, he warned.

The Times says it is losing money and will continue to do so unless it's freed from the joint operating agreement, now linking it with its competitor, the Seattle Post-Intelligencer. Under the formula for calculating profit and loss spelled out in the 20-year-old JOA, The Times says it lost $2.1 million in 2000, $5.1 million in 2001 and $2.7 million in 2002.

The Times is seeking to escape from the agreement, without which the P-I can't survive, according to The Hearst Corp., which owns the 140- year-old P-I. In a civil suit that began in April, a trial judge handed Hearst a preliminary victory in September, but last month, the state appeals court agreed to review that decision.

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