Manhattan’s Lipstick Building. Photo: Philip Johnson, Creative Commons.
A mysterious announcement made the rounds among business writers Tuesday.
A company called Twenty Lake Holdings LLC had just acquired the buildings, printing presses and other real estate holdings from a U.S. newspaper chain. The buy included a total of 27 properties in nine states, the austere press release said.
Don’t bother looking for the press release online, though — Twenty Lake is about as mysterious as its close business associate, Alden Global Capital, the owner of Digital First Media newspapers.
While Twenty Lake and its broker subsidiary, Praxis Commercial, may not be directly owned by Alden, there are incredibly close ties between the firms.
According to past news releases and executive bios, Twenty Lake’s principals Joseph M. Miller and Jay H. Yang once worked for Digital First Media, managing the chain’s real estate holdings.
Now, pay attention to this next part.
Alden Global, a “vulture” hedge fund that invests in distressed companies (and even countries), bought into Media News and the Journal Register Company around 2011. The merged entity was named Digital First Media.
Before the dust cleared, however, DFM’s own execs, Miller and Yang, started running a new, third-party real estate firm, Twenty Lake Holdings, which then brokered the mass sell-off of all of DFM’s property.
To date, according to a Twenty Lake sales sheet, the firm has sold more than 125 properties in 23 states, worth a total of $230.2 million.
Delaware corporation records state the company was established in 2013, a couple of years after the sell-off of Digital First assets began. Being incorporated in Delaware, public records don’t show who actually owns the privately held firm.
But other public documents show that Twenty Lake’s office is on the 19th floor of Manhattan’s “Lipstick Building” on Third Avenue. Alden Global Capital’s offices are on the 34th floor.
More recently, Twenty Lake and its subsidiary Praxis Commercial brokered this spring’s sale of Orange County Register buildings almost as soon as Alden/DFM acquired the paper at a bankruptcy auction.
Praxis is the actual licensed real estate broker for all these deals, while parent company Twenty Lake serves as an “advisor.”
Obits for newspapers
The Praxis homepage features a wide shot of the sprawling former San Jose Mercury News building.
The site says one of the firm’s aims is to help companies “free up critical capital that can flow back to both the business and its shareholders.”
Or maybe just the shareholders.
That’s certainly what’s happened at DFM papers, where mass sell-offs of assets and layoffs of employees have kept Alden and its investors flush, while employees have to scrounge for office supplies as they take on more tasks and fear for their jobs. And forget about a cost-of-living raise.
The office of Praxis, incidentally, is in a former newspaper building in Ardmore, Penn. — the once-venerable Times Building, original home of the Main Line Times.
In a logical twist to this twisted tale, the Times’ considerably downsized offices (it moved out of the old Times Building in the 1940s) were offered for sale in 2011 by, of course, Twenty Lake Holdings.
If you look at the “Properties” page on Twenty Lake Holdings’ website, you might get the feeling it resembles a newspaper obituary page. Or rather, a page of obituaries about newspapers. It’s a sad sight.
There’s something morbidly disturbing about the company’s Holly-Go-Lightly explanation of why it deals in newspaper real estate.
“The majority of local newspapers across the country own property used for creating and printing news. These buildings are located in town centers, are well built and architecturally significant,” the website cheerily states. “Due to economic shifts in the industry, newspaper owners are beginning to sell property.”
No mention is made of the role Twenty Lake’s good friends over at Alden might be playing in this shift.
The company name — Twenty Lake — happens to be the name of a tiny Minnesota lake, but it likely refers to another historic building sale, in this case the offices of Digital First Media’s Saratogian newspaper on 20 Lake Avenue in Saratoga Springs, New York.
It was sold in 2012.
The Bellevue Gazette, one of two Ohio newspapers shut down this week.
Vulturing the news
So whose real estate did Twenty Lake acquire this week?
One guess is a small newspaper chain called Civitas Media. Although Praxis’ announcement of the purchase was coy, Civitas seems likely because the locations of the acquired assets — Kentucky, North Carolina, Tennessee, Georgia, Illinois, Ohio, Pennsylvania, South Carolina and West Virginia — happen to be where Civitas has papers.
And in April, Civitas’ properties were already listed on a Twenty Lake brochure as “in contract” assets — that is, about to be acquired.
Now, to be clear, Civitas does not appear to be connected with DFM or Alden. It’s actually owned by another vulture fund, Versa Capital Management, which, like Alden, specializes in distressed companies.
So perhaps it’s only natural the chain would turn to a fellow vulture-fund-owned newspaper chain’s preferred broker when it came time to “harvest” the newspapers’ real estate.
In keeping with the vulture tradition, the same day Praxis announced its new acquisitions, Civitas shut down two of its small-town papers.
After nearly 150 years in business, the Bellevue (Ohio) Gazette was closed, as was sister paper the Clyde Enterprise.
That’s two more American small towns with no one to watch over City Hall, no one to chronicle the ups and downs of local sports teams, businesses and residents, and no one to reassure town folks that the watchdogs are still watching.
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February 23, 2017 at 2:15 am
Funny how rumors are usually true…..Terrible.