KPFA owner Pacifica reaches an agreement with real estate company
Update, April 10, 2:35 p.m. Pacifica, owned by Berkeley’s KPFA, has reached an agreement with the Empire State Realty Trust, the radio station said on Friday.
Pacifica did not disclose the settlement amount, but said in a press release that the agreement relieved the network of $ 1.8 million in re-leases and fees owed to the Empire State Building owner and station WBAI off the last two Years of his rent there. Pacifica plans to move the New York station to a new transmitter.
The deal is good news for KPFA and the other Pacifica stations, all of whom were named in the Empire State Realty Trust’s lawsuit. The real estate company could have confiscated all of the stations’ assets, even though Pacifica secured a loan that bought the network sometime in the eleventh hour.
Update, January 12th: According to outgoing interim director Bill Crosier, the Pacifica National Board voted on Thursday evening for a loan of around $ 2 million from supporters of the radio network. The loan, which must be repaid within a year, is designed to allow the network to pay off its debt with real estate company Empire Realty Trust and keep its stations on the air while Pacifica continues to seek out a longer-term loan. There is still one small issue that needs to be worked out with Empire Realty Trust, Crosier said.
The board also appointed Pacifica’s new interim director, Tom Livingston of Livingston Associates, who is described online as a public media search service. The company will work to find a permanent director over the next few months, said Crosier, who had volunteered for the position with the assumption that a successor would be appointed soon.
Original story, January 10th: Supporters of the Pacifica Foundation, which owns Berkeley’s KPFA broadcaster, have offered the radio station a $ 2 million loan, likely to stave off an immediate financial crisis that threatened to put some stations out of circulation.
Pacifica interim director Bill Crosier said the network has received “oral pledges” but no written details from supporters of KPFK, the Los Angeles broadcaster of Pacifica, which offers a short-term loan. Crosier said the Pacifica National Board expects to receive loan documents and vote on loan approval within the next week.
Several members of KPFA, Berkeley’s longtime listener-supported progressive radio station, feared the end of the world when a judge ruled in favor of a New York real estate company seeking to collect nearly $ 2 million in rental repayments and fees from Pacifica. New York broadcaster WBAI has long been unable to pay its rent to the Empire State Realty Trust (ESRT), which owns the Empire State Building where WBAI’s broadcaster is located. Since 2005, the station’s lease has included an annual increase of 9%. According to KPFA board members, the director who signed this lease is no longer alive.
The Fall 2016 ruling allows ESRT to seize Pacifica’s assets if the $ 2 million is not paid off. The California broadcasters are vulnerable with the company filing its lawsuit in every state that Pacifica operates in. Monday was the first day on which ESRT could take action against KPFA and KPFK after a mandatory waiting period.
Crosier, who said he was speaking for himself, not on behalf of Pacifica, said it was doubtful that ESRT will act now as the company knows the loan will likely come through this week. If ESRT started seizing assets, the network would immediately file for Chapter 11 bankruptcy, which would stop the collection anyway, Crosier said.
The interim executive director is among a number of national board members – as well as the majority of KPFA’s local board of directors – who have wanted Pacifica bankruptcy for some time to give the network more time to restructure and pay off its ESRT debt than the millions more debt that the network owes. However, the majority of the federal executive board does not consider such drastic measures necessary and voted last week to take out a loan instead.
Crosier said the offer from the CPFK backers will likely be a three month loan designed to provide immediate relief so that Pacifica can pay for the ESRT.
“But we still have the longer-term issues to deal with,” he said.
Pacifica has a loan broker who is looking for potential lenders for a longer term loan. However, Crosier fears that the network will not be able to procure anything on reasonable terms due to its indebtedness.
Pacifica board members also have a history of power struggles and disagreements, which many on KPFA’s local board have linked to the long time it took the network to decide how to address the ESRT issue. New national board members are elected every year.
Despite the ongoing financial crisis at Pacifica, KPFA listeners could breathe a sigh of relief once the ESRT ruling is paid. The station itself is financially sound and, according to management and employees, is better than it has been in years.