Miami Herald Parking Site Sale Decision Could Have Multimillion Dollar Impact
Written by Yudislaidy Fernandez on January 14, 2010
By Yudislaidy Fernandez
The decision newspaper publisher McClatchy receives next week on its pending sale of a 10-acre Miami Herald parking site in downtown Miami will have a definite impact, with a $7 million termination fee at stake if developer Mark Siffin doesn’t move forward with the on-again, off-again land deal.
On Dec. 31 — the date the deal was set to be closed — McClatchy said in a statement that the agreement was extended until Jan. 19. In exchange, the termination fee was hiked from $6 million to $7 million if the buyer, Citisquare Group, doesn’t close the deal.
Pat Talamantes, McClatchy vice president and chief financial officer, said in the statement the company "would have preferred to close the transaction at the end of 2009" to repay its debt with the proceeds.
The sale’s completion is to decrease McClatchy’s available credit line by $125 million, according to a Fitch Ratings report issued Tuesday.
Among Citisquare Group’s options are to extend the agreement another year, but to do so it must pay McClatchy another $6 million non-refundable deposit by Jan. 19, according to Securities and Exchange Commission filings. The buyers can also close on the original $190 million price tag or the buyers can walk away after paying the $7 million termination fee — money for which Mr. Siffin has assumed personal responsibility. The property’s assessed value in 2009 was $53 million.
Over the past five years, the pending deal has undergone some changes.
For example, the buyers no longer have the right of first refusal to buy the land on which the Miami Herald building sits as the contract originally stated, according to the commission filings.
Under the original deal, the buyer was going to provide 740 parking spaces for Herald employees and trucks. Those parking rights were also changed last summer, expanding the area’s use to include any Herald building tenants of any sort except a major retailer, the filings indicate.
The media group already got a $10 million deposit, which it used to repay its debt.
Originally, in 2005, the site, adjacent to the Miami Herald offices, was going to be sold to Pedro Martin’s Terra Group for $190 million.
In 2005, Mr. Martin was quoted saying the deal was probably going to close in a few months, but that didn’t happen.
Mr. Martin ended up making a deal with Mr. Siffin to flip the contract to Citisquare for $230 million and paid the media company a $10 million non-refundable deposit.
Calls to Mr. Martin and Mr. Siffin were not returned.
Then, in 2006, McClatchy acquired Knight Ridder, the Herald’s former parent company, inheriting the pending contract. The extension to finalize the contract is until Jan. 19.