The Charlotte Observer on Wednesday announced plans to buy the Dow Jones publishing company’s University-area printing facility, a move that could set the stage for the Observer to exit its longtime home in uptown Charlotte.
Observer Publisher Ann Caulkins said the deal, reached Tuesday evening, also calls for the Observer to print the Carolinas editions of The Wall Street Journal and Barron’s business magazine, both Dow Jones products.
Caulkins said the deal ends six years of efforts to find a better printing alternative to the Observer’s Flexo presses, which she said carry high costs and limited flexibility in use of color.
Dow Jones’ TKS presses also have significantly better color reproduction, she added, noting that enough capacity will remain for the Observer to do other commercial printing jobs.
Terms of the deal weren’t disclosed, but Caulkins said it underscored the Observer’s long-term commitment to its printed newspaper.
“It just opens up a lot of doors,” she said. “I think it sends a clear message that we’re here to stay and we’re investing, and we have the money to invest.”
The purchase of the Dow Jones facility is expected to close within a few weeks, and the Observer will be printed there beginning sometime in the first quarter of next year.
Caulkins said Dow Jones has about 22 full-time employees at its plant, located on nearly 9 acres at 9140 Research Drive. The Observer plans to move about 20 of its approximately 38 full-time press-related workers to the new facility. But the number could rise if Dow Jones workers who are already trained on the presses there elect not to stay on.
Caulkins said Observer employees who aren’t offered jobs at either facility will be given a severance package.
Newspaper could move
The deal means the Observer is no longer anchored by its presses to a building that Caulkins said no longer meets its needs. The newspaper occupies 9.3 acres spread across several parcels uptown.
The main building at 600 S. Tryon St., built in 1971, has more than 360,000 square feet and was assigned a tax value of nearly $21 million during the 2011 Mecklenburg property revaluation. The tax value of all the properties, including parking lots and a warehouse, totals $45.3 million.
Caulkins said the new printing arrangement makes it possible for the newspaper to move its offices to another site, preferably in or near uptown.
“This was set up for the old school newspaper. We’re a digital company now, and our next offices will reflect what we need to be – the digital company of the future,” she said.
The Observer, like other newspapers around the country, has reduced its workforce in recent years amid falling print advertising revenues in the digital era. Caulkins acknowledged the building has a significant amount of unused space.
But Caulkins said that despite the recent struggles of newspapers, the Observer has more readers than ever, with more than 842,000 reading stories each week in print and online. She added that the dual nature of the newspaper’s work – in print and online – requires an overhaul of its workplace.
The Observer wouldn’t be the first newspaper in recent years to move as part of a modernization effort. The Miami Herald earlier this year left its high-profile property on Biscayne Bay for new offices 12 miles away after a development group offered $236 million for the 14-acre property. The new offices feature multimedia walls and an open, continuous news desk.
The pension fund of the Observer’s parent company, The McClatchy Co., owns the Observer’s uptown site. Sacramento, Calif.-based McClatchy transferred ownership of the Observer property and six other papers’ properties to the pension fund in 2011 to cover a $50 million obligation. McClatchy pays the pension fund $4 million a year to rent the property of the seven newspapers under a 10-year lease.
The pension fund would have to approve any sale of the Observer’s property.
Asked whether the pension fund or the Observer will now seek to market the uptown site, Caulkins replied: “We really haven’t gotten there yet. This deal just got inked last night, so first things first. We know we’re not anchored here anymore, so we can leave the building, but we haven’t called anybody to say, ‘Market our building,’ or anything like that.”
Caulkins said in the event of a sale, she would prefer to keep the newspaper’s offices in or near the central business district uptown. The newspaper has been published at the Tryon Street site in two different facilities since 1927.
She said that after decades of having the Observer’s logo visible from Interstate 277, keeping the company name prominent on a building would be a key consideration.
One real estate expert in 2011 estimated that the Observer land was worth between $2.3 million an acre and $3.5 million per acre. Property values have been rising since then.
The Observer’s property sits just across South Mint Street from Bank of America Stadium, across Stonewall Street from the 48-story Duke Energy Center, and across Tryon Street from a 3-acre site where Crescent Resources has announced plans for a mixed-use project including office, retail, residential and a hotel.
Center City Partners President Michael Smith has been saying in recent months that uptown’s office market has tightened enough to merit another tower. But private real estate developers, still recovering from the recession, have been skittish.
Frazier: 704-358-5145; @ericfraz on Twitter
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