By Kevin Collison
The owner of The Kansas City Star has decided not to sell the newspaper’s massive green-glass production plant overlooking downtown after all.
McClatchy announced in its third quarter earnings report that it had “terminated” a sale-leaseback agreement for the 434,000 square-foot Press Pavilion with an entity called R2 Capital LLC.
The distinctive copper and glass behemoth covers two city blocks between McGee and Oak streets and its prow looms eight stories above the South Loop freeway.
“The company is evaluating whether to re-market the Kansas City production facility,” according to the earning statement.
R2 Capital officials could not be reached for comment.
The sale-leaseback of the production plant, which cost $200 million to build in 2006, was part of a $42 million transaction announced by McClatchy last summer that included the sale of the historic newspaper headquarters at 1729 Grand Blvd.
Jerry Fogel of Kessinger/Hunter & Co., who helped The Star assemble the properties to build the press pavilion in the early 2000s, speculated McClatchy may have soured on the Press Pavilion deal and backed out.
“It was a bad business deal to sell an iconic facility which cost far more than the contract price for what they were going to get,” Fogel said. “The press pavilion value blended into the entire financial transaction didn’t work.”
Meanwhile, the sale of the historic 1729 Grand building, which dates back to 1911, was completed early last month to a Kansas City-based 3D Development through an entity called 1729 Grand Boulevard LLC controlled by developer Vince Bryant.
Bryant is mulling redevelopment plans for reusing the old building that include potential office space and data center space.
The Star’s plan to consolidate its newsroom and other employees into newly-renovated space in the Press Pavilion also is continuing, according to Elaine Lintecum, the company’s chief financial officer.
Lintecum, in a statement relayed by a McClatchy spokeswoman, said the approximately 200 Star employees in the old building including newsroom, advertising, human resources and technology staff, should be in their new space by August 2018.
At one time, more than 1,700 people worked at 1729 Grand, but the rapidly declining fortunes of the newspaper industry over the past decade has prompted substantial layoffs as revenues have continued to drop.
Fogel was pleased The Star, at least for now, will continue to own the Press Pavilion.
“It’s their building, it’s their image, it’s their icon,” he said.