Chron owner exploits its most valuable asset

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just what we need -- luxury condos at Fifth and Mission

What does Hearst Corporation own at the corner of Fifth and Mission that's actually worth a lot of money?

No, it's not the San Francisco Chronicle. The New York-based media congomerate bought the Chron in 1999, at the top of the newspaper market, for something in the neighborhood of a billion dollars, but it's not even worth a small fraction of that today. Mid-sized dailies like the Chron have lost so much value over the past 12 years that Hearst would have trouble getting ten cents on the dollar if it put the paper on the market.

So here's this unperforming asset on the Hearst balance sheet that can't be unloaded without a huge write-down. What's a corporate bean-counter to do?

Well, in this case (as in the case with urban dailies around the country) it turns out that the most valuable thing Hearst got when it bought the ol' Chron was the real estate that came in the package. The Chronicle Building is worth a fortune as a development site, but it's an historic structure that can't be torn down. On the other hand, the old Examiner building, and the parking lots and the various odd lots on the edges, make up a nice site for high-end condos and office space -- and now that the market is picking up, Hearst and its development partner, Forest City, are looking to make some cash off the Fifth and Mission dirt.

We're talking two highrises, one residential and one commercial, and six smaller buildings. It will change the face of an area that's outside the downtown core and that abuts a more low-rent district. Hearst and Forest City are talking about people working in the "creative economy" -- particularly young tech firms. Between Twitter on one end and the Chron's new project on the other, the Sixth Street corridor might start to get pinched.

I wonder what the supporters of the Twitter tax break are going to think about this. And I wonder whether the "young tech companies" that the city wants to attract to the area are going to be demanding tax breaks, too.

And I wonder what the Chron will have to say about all of that.

 

Comments

probably the most dire, grim area in the entire city, this development is to be supported. As well as boosting tax evenues, it will clean up an eyesore.

Can't see any reason to oppose it although i'm sure some NIMBY's somewhere will.

Posted by Anonymous on Nov. 18, 2011 @ 12:55 pm

Right on. The LAST thing this city needs is an influx of educated, successful young people who are at the forefront of a technology that is changing the way the world communicates. "Creative Economy". What a joke. It is just a euphemism for businesses working on the biggest advance in information exchange since Guttenberg.

You know what's next? Some of the young people living in the nearby 'low-rent district' might also get excited and work towards getting a job in a key 21st century business. Who's going to clean up THAT mess?

Posted by District 3 Vet on Nov. 18, 2011 @ 1:14 pm

and this one is no exception. "Dirty Parking Lots Deserve Recognition Too!!" "SROs For All!" "Keep Mid-Market Blighted!!"

Didn't The Guardian oppose the building of the Moscone Convention Center and the Museum District as well? What about the Transamerica Pyramid?

Posted by guest on Nov. 18, 2011 @ 2:21 pm

Oh, it's so awful - building tax-generating real estate to house the influx of 21st century industries. Folks trying to do something profitbale- how dare they! What an affront to the "99%" of us...! This isn't what OccuFail is all about...!

Posted by Guest on Nov. 18, 2011 @ 2:29 pm

You should give Redmond some credit for this blog, it wasn't his usual progressive righteousness. Obviously there is no room to gloat though.

As long as they don't tear out the Tempest it shouldn't be too bad.

Posted by matlock on Nov. 18, 2011 @ 4:09 pm

The Guardian has supported all kinds of development. Affordable Housing development. The develpment of housing for youth aging out of the foster system. The development of city-woned solar panels. The development of a public power system.

We opposed the demolition of 10,000 low-income housing units for the construction of Moscone Center and the associated hotels. We opposed the demolition of the International Hotel. We were right.

Posted by tim on Nov. 18, 2011 @ 4:13 pm

Now what about the Transamerica Pyramid - was that opposed as well?

I'm sure if The Guardian had been around when the Golden Gate and Bay Bridges were built they'd have opposed those as well: "Why must wealthy Marinites be given easy access to San Francisco when a ferry service already exists? At a time of economic deprivation we can ill afford this giveaway to the rich!" "We must beware the creep of capitalism and the proposed Bay Bridge gives it an easy route right into the heart of San Francisco."

If we used the Guardian's judgement San Francisco today would be unrecognizable - a city composed of 3-4 story buildings, the majority of which were filled with homeless and transitioning people with all major headquarters of large companies pushed into the suburbs - and their jobs along with them.

Posted by guest on Nov. 18, 2011 @ 5:22 pm

This is a great thing, period. New jobs for SF, at a time when we really need them. New housing for SF, at a time when we need housing. More revenues for the City. No one is displaced.

Of course, the Guardian can find something to criticize here, because any thing that improves the city anywhere is "gentrification".

Posted by Guest on Nov. 18, 2011 @ 4:41 pm

Does that mean the end of that rubbish? Finally! This will be a real good thing and hopefully will help promote the rest of the independent media in the bay!

Posted by Guest on Nov. 18, 2011 @ 6:20 pm

Matier and Ross alone in the Chron is more informative than all the other papers and web pages put together.

Posted by matlock on Nov. 18, 2011 @ 10:46 pm

Gimme a break - Mutt 'n Jeff !!
Guess you also think 'CW' is our next Herb !!

Posted by Patrick Monk. RN on Nov. 19, 2011 @ 4:41 pm
Posted by matlock on Nov. 19, 2011 @ 10:20 pm

SFBG is envious of the Hearst Corp's real estate.

LOL

Posted by Guest on Nov. 18, 2011 @ 6:43 pm

SFBG is envious of the Hearst Corp's real estate.

LOL

Posted by Anonymous on Nov. 18, 2011 @ 6:44 pm

The more quote normal closed quote people dominate the mid-market area, the better will the neighborhood look. Witness the infusion of food trucks on Tuesday and Wednesday in the Civic Center Plaza where the Farmer's Market is located. The Down and Outers are still there, but they make less an impact in the crowds of people dinning at the food trucks.

I hope the city guardians also allow for middle income/low income housing in that mid-Market area. Not every one will be working in lucrative banking, finance, tech field. Bus drivers, social workers, teachers, store clerks, police officers, etc are also needed to be housed in the City.by the Bay.

I hope the subsidized housing that is located in that area have long term leases--and by long term I mean 100 plus years. As tempting as it is to gentrify that area and take housing away from the elderly and handicapped and homeless, there will always be a need for subsidized housing.

Posted by StevenTorrey on Nov. 19, 2011 @ 8:53 am

Great to wake up to such a thorough trouncing. And the guardian loves development!
Maybe when the development money flows through the right non profits with a little grease to sister sue hestor.
Notice the subtle honesty in Tims post: "we love all kinds of development" - just not housing development - anywhere - ever.

Posted by bob on Nov. 19, 2011 @ 8:57 am

Troll takeover!

Posted by Guest on Nov. 21, 2011 @ 3:34 pm