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OC Register Owners to Sell Santa Ana Land to William Lyons Homes

May 27, 2014

OrangeCountyRegisterBuildingFrom the Orange County Business Journal – The owners of the Orange County Register have reached a deal to sell the bulk of the land they own around their Santa Ana headquarters to William Lyon Homes.

The Newport Beach-based homebuilder entered into an agreement with Freedom Communications Inc. to buy a stretch of land along Grand Avenue in Santa Ana for a housing development.

Terms of the deal have not been disclosed, but real estate sources peg the likely purchase price in the $40 million range.

That price would appear to make it the largest asset sale-real estate or otherwise-for Freedom Communications since Chief Executive Aaron Kushner’s 2100 Trust LLC took over operation of the media company in 2012.

The company’s new owners have been looking to lighten their debt load since that deal, while at the same time embarking on an ambitious growth plan across several Southern California media markets.

Freedom Communications owns the Orange County Register and other publications, including the Press-Enterprise, which it acquired for $27.2 million last year and the recently launched Los Angeles Register.

The Santa Ana land that is expected to trade hands appears to be in the 15-acre range based on a reading of documents that are part fo the purchase and sale agreement.  The agreement was struck around the end of last year.

The deal does not appear to have closed and it has not been disclosed whether any money has changed hands yet between William Lyon Homes and Freedom Communications.

Executives with William Lyon Homes declined to comment on the proposed sale, or the builder’s plans for the site, which is located just off the Santa Ana (I-5) Freeway and near the Costa Mesa (I-55) Freeway.

The purchase and sales agreement runs through the end of 2015, which would appear to give the builder some time to get any necessary entitlement work for the site completed before moving ahead with any development.

The deal would include the majority of the land that Freedom Communications owns around the paper’s headquarters at 625 North Grand Avenue, but it would not include the five-story building itself.

Freedom Communications listed the headquarters building for sale last December at an asking price of $28.9 million.  That works out to an asking price of $167 per square foot for the 173,000 square-foot office.

The company has indicated it would vacate all or part of the office following a sale, depending on the buyer’s wishes.

Kushner, who also is publisher of the Register, told employees of the daily late last year in a memo that the company would likely move to another Santa Ana location if a sale of the property does not include a lease-back provision.

“We have already made excellent progress in both reducing our debt and significantly increasing the funding levels of our pension plan,” the memo said.  “Exiting the real estate business to focus on the newspaper business will continue that progress.”

The five-story building remains on the market for either sale or lease.  The asking monthly lease reate at the building is listed at $1.85 per square foot, according to CoStar Group, Inc. data.

The paper’s printing operations, which are in a low-rise building on aparcel next to the headquarters, look to be part of the planned sale to William Lyon Homes.

Sources familiar with the Register’s operations have previously suggested that environmental conditions tied to the printing press could create a stumbling block for any residential development in the area.

It is unclear whether the Register would have the capability to print its paper using the facilities at other papers it owns, such as the Press-Enterprise, if it shutters its printing operations in Santa Ana as part of the deal with William Lyon Homes.

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