Chapter 11 update: Western and Bend Bulletin to lease part of headquarters building

            As its Chapter 11 bankruptcy case proceeds, Western Communication and its flagship Bend Bulletin newspaper, are attempting to find a tenant to share space in the company’s 87,000 square foot high-end editorial and production building.

            The move follows earlier company announcements that all of Western’s newspaper operations were for sale and that the paper was taking steps to reduce newsprint and other costs through redesign of The Bulletin.

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Bend Bulletin could be sold: Insiders have provided capital for years

            Already this year the company had reduced staff and required some employees to work reduced weeks, and had delayed paychecks in 2018, as noted in a Bulletin article in April.

            Bend’s Compass Commercial brokerage has listed space on the building’s second floor ranging from 5,499 to 20,539 square feet at a rate of $1.75 per square foot monthly, or $21 yearly. 

            The space offers “stunning views...several private offices and open work areas” according to listing details. The leased space would be, “independent and secure from first floor with separate entrance if required." Western would retain the lower floor space for its editorial, administrative, pre-press and printing operations.

            The lease availability follows by a few weeks the announcement that long-time company president and publisher John Costa would retire, with chairman and publisher Elizabeth McCool taking over those reponsibilities. Current Bulletin editor Erik Lukens was named chief editorial officer of the parent company. 

            With declining circulation and revenue leading to major staff reductions the massive headquarters building has been a burden on the struggling newspaper group, which includes four other publications in Oregon and two in California.                                                

           

            The company also entered Chapter 11 in 2011 after a dispute with Bank of America over the building loan payments. It emerged the following year but has never gained a solid financal footing, as revealed in the current bankruptcy documents.

            The Bulletin and Western’s problems are not unique to the newspaper industry, but some observers have said the company was overly ambitious in 2000 in construction of the large headquarters facility at 1777 SW Chandler Avenue, near the new OSU-Cascades 4-year campus.

            Leasing the space could provide some incentive for Western’s largest secured creditor, Sandton of New York, to negotiate in the Chapter 11 proceedings. Sandton holds the loan on the Bulletin building with an original face value of about $20 million.

            The original loan was by Washington Mutual, which collapsed in the housing crisis, and was later acquired by Bank of America, which sold it to Sandton. In those cases debt is often heavily discounted and Sandton’s acquisition price has not been recorded.