Inquirer sells its building

The front of the Philadelphia Inquirer building at 400 N. Broad Street.
The front of the Philadelphia Inquirer building at 400 N. Broad Street.

The buyer is developer Bart Blatstein. Plans for the tower are unclear.

Posted: July 29, 2011

Developer Bart Blatstein is buying the 18-floor office tower housing The Inquirer, the Philadelphia Daily News and Philly.com at 400 N. Broad St.

Philadelphia Media Network, owner of the 87-year-old bone-white building with the distinctive clock tower, announced the sale to Blatstein's Tower Investments, but declined to disclose the price.

Based on information from another bidder, a group including Parkway Corp., the purchase price for the 526,000-square-foot building exceeded its bid of $19 million.

Mark Block, spokesman for PMN, declined to identify the other bidders for the building. Blatstein did not return a request for comment on his plans for the building.

Whether PMN will lease back space for its operations is uncertain. Block said the company "is exploring options," including the possibility of remaining at 400 N. Broad or "identifying new space in the region."

The vacancy rate for office space in Center City is 14 percent, according to second-quarter numbers from CB Richard Ellis, the commercial real estate broker.

"We want to ensure that the newspapers remain in the city," said Alan Greenberger, deputy mayor for economic development and director of commerce, "although I know it is always a matter of cost."

He said the city would work with PMN to find the space it needed to stay in Philadelphia. Those needs are not as demanding as they once were - a major reason for putting the building on the market.

"Since PMN is presently utilizing less than half the space in our present location, the sale of our historic building to a premier local developer is an important step in allowing PMN to become better positioned to meet the demands of a changing media landscape," said Greg Osberg, the chief executive officer and publisher.

Blatstein is best known for his redevelopment of the Northern Liberties neighborhood. He has recently turned his attention to North Broad Street.

He is redeveloping the State Office Building at 1400 Spring Garden St., north of the newspaper building. State records show he paid $21 million for the 19-story, 300,000-square-foot building, and is spending a reported $50 million to convert it to 204 apartments as well as retail.

Ownership changes

The School District of Philadelphia headquarters at 440 N. Broad St. lies between the office building and the newspaper. That site, built as an addition to 400 N. Broad in 1948 by then-owner Walter H. Annenberg, was sold in 2005 by Knight Ridder Inc.

Knight Newspapers Inc. had bought the newspapers and the property from Annenberg's Triangle Publications Inc. in 1969. Knight merged with Ridder Publications in 1974, and Knight Ridder Inc. published The Inquirer and the Daily News for the next 32 years.

In 2006, as ownership changes rippled through an industry buffeted by the rapid growth of free news on the Internet and declining print readership, KR sold the papers to the McClatchy Co., a newspaper chain based in Sacramento, Calif. McClatchy quickly sold the Philadelphia papers to a local group headed by public-relations executive Brian P. Tierney.

The new owner, Philadelphia Media Holdings Inc., declared bankruptcy in February 2009. PMH's total real estate holdings, including the Schuylkill Printing Plant in Upper Merion, were valued at $30 million in October, when the company changed ownership in bankruptcy bidding.

The Philadelphia Office of Property Assessment places 400 N. Broad St.'s 2011 market value at $10 million. A five-story parking garage and adjoining surface lot on 15th Street behind the tower are valued at $6.7 million. Property taxes are $290,624 annually, according to the OPA.

'Good track record'

Blatstein's plans for the property aren't known.

"He's got a good track record, so I'm optimistic," said Greenberger, adding that residential or hotel development might be options.

"This is nothing against the newspaper, but it is no longer in the position to activate things at street level," Greenberger said. "There just aren't enough people going in and out of the building these days."

The Beaux Arts skyscraper, designed by Rankin, Kellogg & Crane, was first known as the Elverson Building, because The Inquirer was owned by James J. Elverson Jr. It was the tallest building north of City Hall, and Elverson had purchased the site, at Callowhill Street, believing Center City would expand north.

After eight decades, Elverson's bet might be paying off. The $786 million expansion of the Convention Center gives that complex a front door on North Broad Street. Hahnemann University Hospital has stretched north by making use of existing buildings.

Temple University is spending $1.2 billion over 10 years to expand its North Philadelphia campus and develop properties south along Broad Street toward Center City. Greenberger said this included the big gateway project between Cecil B. Moore Avenue and Oxford Street, a new central library on the west side of Broad Street across from Berks Street, and the renovation of McGonigle Hall.

Institutional efforts are being reinforced by private developers - Blatstein for one, and Eric Blumenfeld for another. Osteria Restaurant has enlivened the 600 block of North Broad, and three restaurants are planned across from it.

Blumenfeld opened the Lofts 640 apartments on Mount Vernon near Broad in 2006. He is turning his attention to Lofts 600, behind the old Wilkie Buick dealership at Mount Vernon. The 101 loft apartments should be finished in the next several months.

"We've been putting people together on North Broad Street to meet each other to develop better synergy," Greenberger said.

"Piece by piece, you get it done," he said, adding that "there are enough pieces in motion on North Broad Street, and this builds momentum."


Contact real estate writer Alan J. Heavens at 215-854-2472, aheavens@phillynews.com, or @alheavens on Twitter.

 

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