Tribune won't sell iconic tower

February 25, 2009 6:02:26 PM PST
Blaming a battered real estate market, debt-laden Tribune Co. is giving up on plans to raise cash by selling its iconic headquarters on Chicago's Magnificent Mile -- at least for now. The company is also for the time being setting aside plans to sell Times Mirror Square, a five-building complex that serves as home to the chain's Los Angeles Times, Tribune Co. spokesman Gary Weitman said Wednesday.

"The downturn in the real estate market makes a sale right now unlikely," he said. "But we continue to explore opportunities to maximize the value of these properties. That would include, down the line, the possibility of a sale."

In Chicago, no large downtown office building has sold since last July -- a fact that did not bode well for any successful sale of the 84-year-old Tribune Tower, the gothic, 40-story building that is home to the company's namesake newspaper, the Chicago Tribune, and to WGN Radio.

"It would take tremendous patience and deep pockets to be able to acquire the site and wait for the next uptick in the commercial real estate market," Robert Six, executive vice president of Chicago-based Zeller Realty Corp. told Crain's Chicago Business.

The company hired brokers last summer to sell Tribune Tower and Times Mirror Square to help pay down a $13 billion debt load, the bulk coming from a 2007 buyout led by real estate mogul Sam Zell.

Efforts are still under way to lease vacant space in the Tribune Tower, and a brokerage firm is trying to find government tenants for Times Mirror Square, which is across the street from Los Angeles' city hall, Weitman said.

Tribune's December filing seeking Chapter 11 bankruptcy protection didn't help sales prospects either, because it would have changed the real estate sales process, Tribune's director of real estate, Stephanie Pater, told Crain's.

Zell's management team has pushed sweeping changes as Tribune tries to cope with a crippling decline in revenue. Tribune is in final negotiations to sell another iconic asset, the Chicago Cubs, along with related sports properties to Tom Ricketts and his family for about $900 million.

Tribune also owns The Sun of Baltimore, The Hartford (Conn.) Courant and other daily newspapers and broadcast stations. Hit by a severe downturn in advertising revenue, the company sought bankruptcy protection as it seeks to reorganize for long-term sustainability. Separately, the Courant said Wednesday it would eliminate 100 jobs this week, primarily through layoffs.