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February 12, 2006
TimesUp@NYT
Common Financial Sense looks at the financial relationship between NY TImes and Forest City Ratner:
The other thing the [New York Times] did with its cash was to make a huge bet in New York real estate, again during a bull market. In 2004, the company sold its old building on West 43rd Street for $175 million. Earlier, in 2001, it had committed to pay about $639 million for a majority share of a 52-storey building across the street from Port Authority. (The Times paid $86 million to New York State to clear the lot, evict the tenants, and lease the land for 99 years. Bet you didn’t read the tearful details of that eviction in the paper?) Its minority partner is Forest City Ratner (FC), a real estate company that, as I read the small type, got the better of the Times when it came to cutting the deal. When the tower, which looks like a giant paper shredder, is finished around 2007, the Times will own 58 percent and FC 42 percent. But as the 2004 annual report notes: “Because NYT is funding its contribution equity first, a portion of those funds will be used to fund FC’s share of Building costs (the “FC funded share”) prior to the commencement of funding of the construction loan.” In other words, Ratner gets his 42 percent share for nothing down. The company believes the new headquarters will solve problems ranging from office politics to television production. But Raines is more cryptic, concluding offhandedly: “If and when it is built, the space for the broadcast and digital activities central to the Times’s future will be inadequate.” Gee, Howell, whaddaya want for $639 mill?
Posted by amy at February 12, 2006 11:45 AM