The Tri-City Herald has new offices and soon will have a new owner after a bankruptcy judge approved the sale of its parent, McClatchy, to its leading creditor, Chatham Asset Management LLC.
The staff left its longtime home in downtown Kennewick for new offices at 4253 W. 24th Ave. in Kennewick’s Southridge neighborhood the week of Aug. 10.
It considered several locations, including remaining in downtown Kennewick. The Southridge building best fit its needs, said Jerry Hug, general manager for the Tri-City Herald and Northwest director for McClatchy finance/chief financial officer.
The move fulfills plans spelled out in October when McClatchy entered a $4 million sale-leaseback deal for its Kennewick campus with D9 Contractors Inc. of Pasco.
McClatchy agreed to lease space in the 102,000-square-foot mixed-use office and industrial building at 333 W. Canal Drive for 10 months. The corner of West Canal Drive and North Cascade was the Herald’s home for generations.
McClatchy bought the Herald in 1979 and ran it as a daily newspaper, and more recently, as a digital news site, for the next four decades.
But struggling under pension issues, declining advertising and circulation, and debt associated with its 2006 acquisition of the Knight-Ridder newspaper chain, McClatchy filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in February in New York.
Chatham was the successful bidder in an auction held July 10.
The New Jersey hedge fund’s offer included a $263 million credit bid of McClatchy's first-lien debt and $49 million in cash.
The court subsequently approved the sale of most assets, McClatchy announced on Aug. 4.
The transaction, expected to close in September, includes the McClatchy name, the Tri-City Herald and 29 other news organizations. Other properties include the Miami Herald, Fort Worth Star-Telegram, Kansas City Star and Sacramento Bee and three other Washington newspapers – the News Tribune of Tacoma, the Bellingham Herald and the Olympian.
The sale concludes the McClatchy family’s 160-plus year run at the head of what had been one of the largest newspaper chains in the country, which traded under the stock ticker MNI on the New York Stock Exchange.
The McClatchy papers will be run as a privately held company with its own board of directors.
The new company will take ownership of all 30 newspapers and has agreed to maintain employment at comparable pay and benefits. It will honor lengths of service and collective-bargaining agreements as well.
"As McClatchy transitions with a strengthened capital structure, the company will be well positioned to accelerate the digital transformation our team has worked so hard to achieve,” said Craig Forman, president and chief executive officer of McClatchy, in a press release.
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