Press Democrat’s Rohnert Park property sold for $9.5 million

The media group that owns The Press Democrat has sold the Rohnert Park building where the newspaper is printed to a developer who has agreed to lease the property back to the paper.

Sonoma Media Investments LLC sold the printing plant and 12.7 acres of property to Bay Area real estate firm PB&J Acquisitions for $9.5 million, according to county land records.

The sale, which closed escrow in mid-September, will allow the media company to pay down debt and pay back investors while ensuring the paper will be printed locally for at least the next decade, said Steve Falk, chief executive officer of The Press Democrat.

“It was a very attractive way to secure our long-term future through a lease and liquidate some of this value,” Falk said Tuesday.

The sale includes the 73,000-square-foot building that was built in the 1980s to house the paper’s printing presses. The property enjoys a prominent location facing Highway 101 just south of the Graton Resort & Casino.

PB&J Acquisitions, which is based in Richmond but owns property across Northern California, is leasing the building back to Sonoma Media Investments for a minimum of 11 years while it pursues development of the portion of the property between the building and the freeway. The agreement includes two five-year options to extend the lease, said Bill Hooper, chief operating officer at Sonoma Media Investments.

The company is also trying to sell a 7.4-acre undeveloped property west of the building, Hooper said.

“It made more sense for us, and for the long-term sustainability of the paper, to be out of the real estate business,” Hooper said.

The sale will improve the financial health of the company by allowing it to substantially reduce the debt it took out to purchase the paper, Hooper said.

Backed by a group of prominent local business and philanthropic leaders, Sonoma Media Investments purchased The Press Democrat, Petaluma Argus-Courier and North Bay Business Journal in 2012 from a Florida-based newspaper company that had acquired the papers earlier that year from the New York Times. At that time, Falk said the printing plant and real estate were key components of the deal and owning the plant was important to the paper being able to control its own destiny.

He said the subsequent sale and lease-back continues to give the paper long-term control over where the paper is printed. He noted that if all options are exercised, the group would still control the printing operation for two decades.

“I don’t see this as a fundamental change in our direction,” Falk said of the sale. “When you talk about 20 years in this business, that’s about as long term as you get.”

The company previously tried to subdivide the property and sell off a 3.8-acre, L-shaped chunk between the building and the highway to developers, but that effort was never completed, Hooper said. That lot was previously on the market for $3.3 million.

The group also considered outsourcing the printing of its papers, which also include the Sonoma Index-Tribune, to another entity about two years ago, Falk said. But they concluded it made more sense to retain control of that process.

There has since been a significant increase in the amount of commercial printing work taking place at the plant, from about 36 percent of capacity to 80 percent, he said.

That’s largely due to picking up the job of printing other publications, such as the Napa Valley Register, whose press was damaged in the 2014 earthquake, the Marin Independent Journal, and various weekly newspapers, he said.

Bill Sumski, a San Francisco real estate attorney who is managing partner of PB&J, plans to subdivide the property and build a 70,000-square-foot industrial building west of the Press Democrat building, possibly catering to the wine, beer or food industries.

He said the firm was still evaluating what uses made sense for the area between the building and highway, which is zoned for light industrial.

The recent sale did not involve the paper’s headquarters in downtown Santa Rosa and four nearby parking lots, all of which are leased. The previous owner, Daytona-based Halifax Media Group, sold them in 2014 to Cornerstone Properties.

You can reach Staff Writer Kevin McCallum at 707-521-5207