Therefore I filed an open records request asking for the sales contract, the appraisals of the building and city council action to conclude the sale. This is a recap of what I found in the documents. Before actually getting into the sales documents I believe a short historical recap of the El Paso Times is in order.
In 1972, Gannett Company, Inc., purchased the El Paso Times for $26.7 million. In 1991, the building that was sold to the city was built by Gannett. In 1997, the El Paso Herald Post, the El Paso Times’ competitor goes out of business. That year, the El Paso Times’ daily circulation was about 65,500 newspapers.
By 2002, the local paper’s daily circulation was about 74,418.
In 2003, the Texas-New Mexico Newspapers Partnership was created by Gannett and MediaNews Group. Gannett contributed the El Paso Times to the partnership and retained majority control of the new entity. Also, in 2003, the El Paso Times publicly opposed Osvaldo Rodriguez’ quest for city tax incentives to build an El Paso newsroom and printing plant in order to start publishing an El Paso version of the Diario de Juárez. Rodriguez’ tax incentives never made it to a vote before city council. In 2003, the El Paso Times’ daily circulation was about 75,000 papers.
In 2005, the newspaper partnership added four newspapers from Pennsylvania and Gannett relinquished majority ownership to MediaNews Group.
By 2008, the El Paso Times’ daily circulation has fallen 69,208, rising slightly to 69,350 in 2009.
In 2012, the Central Appraisal District valued the El Paso Times building at $10,903,710 with a market value of $9,117,398.00. It is unclear at this point whether the valuation includes the parking lot across the street.
On June 26, 2012, city council votes to demolish city hall to make way for the ballpark stadium. In early August of that year, the community slowly became aware that the El Paso Times was one of the buildings the city was looking to purchase in order to relocate city hall departments. On August 8, 2012, city council votes to purchase the El Paso Times building.
On August 17, 2012, Hoover Appraisal Company prepared a “Self-Contained Report” appraising The El Paso Times Office Building and the parking lot across the street. The report was prepared for Alan Shubert, on behalf of the City. The appraisal appraised the building and the parking lot at $10,300,000. Hoover charged the city $3,500 for the appraisal.
Interestingly, another report was included in the packet I received for my Open Records request. The second report has the same number of pages (85) but the PDF file name is labeled “Revised” and “Report 2”. The original Hoover report file name had “initial” as part of the name. The second report’s appraisal set the value at $11,870,000.
My personal archives show that the city posted an updated Hoover appraisal on its website on September 27, 2012. I could not find any explanation in my open records request or in the media about the discrepancy in both reports.
On October 3, 2012: Cushman & Wakefield of Texas, Inc., out of Houston prepared an “Appraisal of Real Property” for the El Paso Times Building and the parking lot. The appraisal dated October 3, 2012 is labeled “In a Self-Contained Appraisal Report” was prepared for Texas New Mexico Newspapers Partnership, the owner of the El Paso Times. This report set three values and concludes with a “final” value. The values were; the ‘cost approach” at $9,700,000, the “Sales Comparison Approach” at $10,000,000, and the “Income Capitalization Approach” (rounded) at $9,350,000. The appraisal concluded that the building and parking lot be appraised at $9,500,000.
In the explanations section, the appraisal notes that the property “is currently under contract for sale”. The “reported negotiated price is $12,250,000”.
On October 8, 2012, the city contracted Wilkinson Pendergras & Beard, LP to conduct an appraisal of the building. This appraisal placed a “current market value” of $5,775,000 and $12,970,000 as the “current use” value of the building and parking lot. This company was paid $12,500 for the appraisal by the city.
On November 6, 2012, on a motion by city council, the city manager was authorized to “negotiate and execute” a contract of sale for the El Paso Times building. The price city council set was $9,372,500 for the purchase of the building and the parking lot.
According to the Contract of Sale between the city and the newspaper, the city put up $250,000 in earnest money and agreed to purchase the building and parking lot for $9,372,500.00. The purchase was contingent on The Pacific Coast League, the National Association of Professional Baseball Leagues, Inc., and other Minor League Baseball organization approving the purchase of the Triple-A team and authorizing the relocation to El Paso. The contract also stated that the sale was also contingent on city council approving the demolition of city hall and approving the ballpark construction.
As part of the sales contract, the city, upon closing, allowed the newspaper to lease back all of the First Floor and the Library/Archives and Production Offices and the IT Section until January 15, 2013.
The contract also stipulated that the city has the “right of first offer” if the newspaper decides to sell the Production Building for “the offer price”. This is the building that the newspaper still owns, that is adjacent to the one purchased by the city. If the city refuses to buy the building then the paper can sell it to a third party.
A December 12, 2012 Buyer’s Closing Statement by Stewart Title confirms the sales price of $9,372,500.00. On December 17, 2012, the Warranty Deed by Texas-New Mexico Newspapers Partnership and lease agreements between City of El Paso and Texas-New Mexico Newspapers Partnership are executed.
According to the closing documents, all of the sales commissions were to be paid by the newspaper to Adin A. Brown of Sonny Brown & Associates, LLC. and Nate Pennington of Newmark Grubb Knight Frank, Inc.
In 2012 the daily circulation was approximately 70,500.
In February 2013, the El Paso Times begins to move to its new location.
On February 26, 2013, the city and the newspaper enter into a one year lease agreement, now known as the Breezeway Lease. It is for the first floor of the building consisting of approximately 2,094 square feet and another 1,007 square feet. Rent is $4,725 per month to be increased by 3% each year the lease is in effect.
At the same time, the newspaper leases from the city, “for the same Term and for the same rent as this Lease 150 parking spaces at the Union Plaza Parking Terminal”. The parking lease is in two parts. The first part is the “UPTT Parking Pass Agreement” between SMG and the newspaper parent for 120 “undesignated” parking spaces at the Union Plaza Transit Terminal located at 400 W. San Antonio Street for eight years. The lease amount is $3,780 per month for the first year increasing by 3% annually thereafter. In the second part, the newspaper enters into a “UPTT Parking Space License Agreement” for the use of 30 designated, or reserved parking spaces at the Union Plaza Transit Terminal. The amount is $945 per month, with a 3% increase clause.
In other words, both leases effectively cancel each other out.
In 2013, the paper’s daily circulation is about 65,247.
The end result for the taxpayers of the community is that their city hall is spread across several downtown buildings and they own a building that they will have to discard in the near future. The taxpayers are burdened with having to spend more money to build a new city hall. The taxpayers are also missing out on $132,688.38 of property taxes the building was generating for them.
As for the El Paso Times, they got to offload a building that would have been difficult, if not impossible to sell as the paper continues to shrink its foot print in the city.