Twenty-seven years after The Press Democrat was sold to the New York Times, it returned to local ownership Thursday as a prominent group of power brokers and wealthy investors closed a deal they said will protect the paper's legacy of quality local journalism.
The purchase of The Press Democrat, Petaluma Argus-Courier and the North Bay Business Journal from Florida-based Halifax Media was completed shortly before noon. The buyer, Sonoma Media Investments, is a group formed in 2011 to buy the twice-weekly Sonoma Index-Tribune newspaper and Sonoma Magazine.
Publisher Bruce Kyse choked up when he announced the deal a short time later to employees, who erupted in applause. He called the Press Democrat and Argus-Courier "long-term institutions that help define the history of Sonoma County," and said he was gratified to see them protected.
"This is kind of an historic moment," Kyse said. "This is a big deal."
News of the impending sale and disclosure of the key players were announced last week. They include lobbyist and Sonoma-based developer Darius Anderson; Bill Hooper, who heads Anderson's development firm, Kenwood Investments, and will be chief operating officer; former North Coast congressman Doug Bosco of Santa Rosa, who will becomes the paper's general counsel; and Steve Falk, a former San Francisco Chronicle publisher who is chief executive officer of the investment group.
It also was revealed that six local investors proved crucial in making the deal a reality. Among them are some of the region's most influential names, including Jeannie Schulz, wife of the late Charles M. Schulz, whose Peanuts comic strip empire was built on newspapers, and Norma Person, whose late husband Evert Person sold The Press Democrat to the New York Times in 1985.
"All of them have their roots, their hearts and their soul in Sonoma and they are all committed to this endeavor," Anderson said.
Terms of the deal were not disclosed. Halifax Media purchased the three papers in January from the New York Times Co. along with 13 other newspapers, most of them in the Southeast, for a total of $143 million.
It has long been speculated that Halifax would spin off the three California papers because they were geographically isolated from the rest of the group.
"I don't think they were bad people," Anderson said of Halifax. "I think they weren't focused on the West Coast."
Halifax CEO Michael Redding could not be reached for comment.
The deal is the latest in a small but increasing number of newspaper purchases by local investors seeking to preserve their community paper, said Rick Edmonds, media business analyst for the Poynter Institute, a nonprofit school of journalism located in St. Petersburg, Fla.
Such groups "aren't really interested in turning a buck or flipping it," Edmonds said. "Their main motivation is that they want to have a good newspaper."
Anderson began his pursuit of the newspaper shortly after Halifax purchased it in January and negotiations have been ongoing for months. Financing the deal proved tricky, requiring a combination of local investors' equity and a bank loan, which Anderson said was very difficult to secure.
"To try to get a bank to make an investment in a newspaper is a very, very challenging task," Anderson said.
The group purchased the three newspaper businesses as well as two pieces of real estate in Rohnert Park: the 12.7-acre Press Democrat printing plant and an adjacent 7.3-acre vacant parcel.
The sale does not include the paper's Mendocino Avenue office building and four nearby parking lots. Those continue to be owned by Halifax Media Group, but are in the process of being sold to another investment group.
Sonoma Media Investments has signed a 10-year lease for the second and third stories of the downtown building and surrounding parking lots. Plans call for consolidating the newspaper offices into the second and third floors, which will allow the first floor to be leased to another tenant.
Falk said Thursday he planned to resign as the chief executive of the San Francisco Chamber of Commerce and move to Sonoma County, where he will work in the Press Democrat building daily.
He said he always held The Press Democrat in high esteem as a competitor when he worked at the Chronicle, and looked forward to returning to the newspaper business.
But that business has changed dramatically since Falk left the Chronicle in 2004. With readers and advertisers moving online, newspapers across the nation struggle to survive. Over the past decade, The Press Democrat has lost more than a third of its circulation and suffered steep declines in both classified and traditional advertising revenue.