Miami Herald bayfront property sold to Genting, a Malaysain resort and casino developer for $236 million
By DOUGLAS HANKS Published in the Miami Herald on 5/31/2011
Asia’s third largest casino company is paying $236 million for the 14 acres of waterfront land surrounding The Miami Herald, a deal that means a new home for the publishing company and a major new player in downtown Miami’s development boom.
The surprise announcement came after a long-stalled deal for adjoining Herald parking lots fizzled, a seeming victim of the real estate bust. The new buyer is a deep-pocketed Malaysian resort developer, Genting Malaysia Berhad, which operates resorts around the world. Properties include a video lottery facility at the Aqueduct Racetrack in New York and 46 casinos in the United Kingdom.
Resort and gambling lobbyists have been pushing to casinos in Florida’s largest hotels, but state law bans them outside of tribal lands, some racecourses and other facilities.
Although little known in the U.S., Genting already has ties to Florida. Currently it owns 50 percent of Miami-based Norwegian Cruise Line and is a partner with Universal Studios in the Universal Studios Sentosa theme park in Singapore, which opens this weekend. Worldwide, the Genting Group, has vast holdings in resorts and casinos, along with plantations, power generation, oil and gas, real estate and other industries, with a combined market capitalization of $45 billion.
The project will be called Resorts World Miami and will include a hotel, convention space, restaurants, retail and some sort of residential component. Genting did not mention plans for a casino. The Herald site sits across from Miami-Dade’s Adrienne Arsht Center for the Performing Arts. Genting representatives plan a news conference at the center at 10 a.m. Friday.
The Herald’s parent company, McClatchy, announced the sale and said both The Miami Herald and El Nuevo Herald would move to another location within two years. Until then, the papers can operate in the current waterfront building for two years. The building also houses Brown Mackie college, which presumably would relocate as well.
The deal brings an infusion of cash for the Sacramento-based company, which has met declining advertising revenues with staff cuts at its newspapers across the country, including the Herald. McClatchy will use the $163 million from the sale to bolster the company’s pension plan and $65 million to pay down debt. The remaining $2 million will be used to pay for taxes associated with the sale.
“Both the company and the pension plan are better off as a result of today’s news,’’ McClatchy CEO Gary Pruitt said in a written message to employees Friday.
The deal also means the end of a landmark location for The Miami Herald, which faces Biscayne Bay. The prime real estate has long been eyed by developers, and during the boom it brought an eye-popping deal for just a portion of it.
The long-stalled agreement to sell about 10 acres of that land for $190 million was terminated in January. Developer Mark Siffin had received approval from the city of Miami to build a high-end retail center and a pair of 40-story electronic “media´´ towers on the properties. While Siffin would have only gotten Herald parking lots, for an extra $46 million, Genting gets the prime Herald site, too.
“While locating a newspaper operation on the bay may have made sense in the past, Pruitt wrote, “it no longer is the best fit.”
The Miami Herald building and bayfront property has been sold to a Malaysian resort and casino developer for $236 million. The Miami Herald will move out within two years.
Herald land sold for $236 million
The McClatchy Co. sold the 14 acres of The Miami Herald for $236 million in a deal announced Friday.
By John Dorschner and Douglas Hanks published in the Miami Herald on 5/28/2011
Asia’s third largest casino company paid $236 million for 13.9 acres of waterfront land owned by The Miami Herald, a landmark deal that would remake the northern edge of downtown Miami.
Genting Malaysia Berhad closed on the all-cash deal Friday with the McClatchy Co., The Herald’s parent company. Genting executives said they would spend $2 billion to $5 billion on the project and create thousands of jobs. The surprise announcement makes the Malaysian conglomerate the newest player in downtown Miami’s expanding development scene.
The deal happened quickly, after a long-standing contract to buy The Herald’s parking lots fell through.
“This is probably the highest price, or close to it, per acre and per square foot for a land deal in Dade history,” said Michael Y. Cannon, a Miami real estate analyst. “It’s a wonderful piece of property, on the bay between the MacArthur and Venetian causeways.”
Cannon said the deal wasn’t strictly a land-only purchase, since The Herald building sits on it, but he presumed that Genting would tear it down to develop what the company described as a mixed-use development that would include hotel, shops, convention center and residences.
Cannon viewed the deal as a major endorsement for the area. “Miami has come of age, when you see world investments like this moving in. We are becoming what I call a city-state,” with a major Asian company recognizing Miami’s international potential to attract tourists.
Under terms of the deal, The Herald gets two years to move. Publisher David Landsberg said he would look for a central location in Miami-Dade, but the huge printing presses might end up at a different place from Herald offices.
“It’s a $236 million windfall to our company in total cash,” Landsberg said. “There isn’t much better than that.”
Responding to employee questions at a Friday meeting, Landsberg said the land sale would not affect Herald operations. “We believe it is a completely sustainable business,” he said. “We’re profitable and providing cash to our parent company. … We fully intend to be a newspaper for a long period of time.”
Of the proceeds, $163 million will go to bolster McClatchy’s underfunded pension plan, according to Chief Executive Gary Pruitt. Another $65 million will pay down the company’s debt, with another $2 million going to taxes. McClatchy will receive another $6 million once it vacates the building.
McClatchy, which owns 30 daily newspapers, has also sold buildings in Modesto, Calif., and Fort Worth, Texas, in recent months. The company had a long-standing contract to sell The Herald parking lots — but not The Herald’s main building — for $190 million, but the developer never closed on the deal.
McClatchy stock rose on the news, moving up almost 14 percent at one point during the day to close at $2.95 per share, 6.88 percent above Thursday’s closing price. It was the biggest single day gain since March 21.
The Herald property stretches from Biscayne Bay to Biscayne Boulevard, where the company owns a building called Boulevard Shops. The bayfront location is “not where you would put a manufacturing plant today,” Landsberg said.
The bayfront edge of The Herald property was built-up landfill from construction of the MacArthur Causeway, according to Cannon’s research.
Miami historian Paul George said that the area boomed in the 1920s, when Biscayne Boulevard was extended north. What is known as The Herald property was then filled with restaurants and nightclubs.
In the 1930s, the property was well known for the Little Royal Palm Club. “Legend had it that they had gambling in one of their back rooms,” George said. “The thinking then was tourism was the main business and you needed to give tourists what they wanted.”
The Little Royal was gone by 1951, when The Herald won its first Pulitzer Prize for a crusade against police tolerance of widespread but illegal casinos.
If Genting remakes the property into a “destination resort” that included gaming, “all we’re doing is going back to the future,” said Cannon, the real estate analyst.
In March 1963, The Herald moved into a $20 million headquarters it had built on the property. At the time, the bayfront location made perfect sense because “the cheapest form of delivery of newsprint was by barge,” said Pete Weitzel, a retired managing editor. Those bayside deliveries stopped decades ago.
Among many other things, the building was used for scenes of such movies as Absence of Malice, Mean Season and Big Trouble.
McClatchy Treasurer Elaine Lintecum said Friday that “the transaction came together relatively quickly.” Resorts World President Mike Speller said his company had been working on the deal for no more than 90 days. “It was dizzying the pace they went to acquire it,” Landsberg said.
Under the terms of the deal, The Herald will remain in the building rent-free for the next two years, and is under contract to maintain the structure.
Landsberg said there will be plenty of alternatives for housing the company’s 750 employees. The toughest issue will be relocating The Herald’s huge, high-speed presses that crank out up to 70,000 newspapers an hour.
The Herald has five presses, each 525 tons and 34 feet high, 110 feet long and 18 wide, according to Craig Woischwill, The Herald’s senior vice president of circulation and operations. Woischwill said the company is likely to move only three of the five.
The Herald has already hired a company to work on moving the presses, Landsberg said. The Herald generally doesn’t use more than three of its five presses at one time, he said, meaning it could move presses without having to look elsewhere for printing services.
The Herald building also houses Brown Mackie College. On Friday, its president, Julia Denniston, said, “We were aware that the sale could take place when we agreed to move to this location,” and the college will relocate somewhere else in the Miami area.
The Genting deal comes on the heels of the announcement of a new $700 million urban center planned by Hong Kong-based Swire Properties on the south side of the Miami River that would include residential towers, shopping and a hotel. That deal was believed to be the biggest new project announced since the real estate market crashed five years ago, and the Genting venture is priced at three times that amount. Swire already has a significant Miami presence on Brickell Key.
Cannon said the Genting plans would be a huge boost for the area north of downtown Miami, and on Friday, Mike Eidson, chairman of the adjacent Adrienne Arsht Center for the Performing Arts, said he strongly supported the Asian company’s plans, saying it will help sustain the tax-funded performance hall. He declined to say whether the Arsht board would support bringing gambling to the neighborhood.
He also said Genting plans to build a 700-seat theater on its property that the Arsht center would manage, a new revenue source for the nonprofit as well as a venue for hosting plays and other performances that aren’t conducive to the Arsht Center’s stages. The resort’s garages would give dedicated parking for the Arsht Center, Eidson said, solving a persistent worry for the downtown venue.
He credited the Arsht Center with sparking the kind of urban revival that attracted Genting’s investment.
“If we hadn’t built the Arsht Center, we wouldn’t have the opportunity to do something like this,’’ he said.
Genting Buys 14 Acres in Downtown Miami for $236M
By Jennifer LeClaire Published on GlobeSt.com on 5/31/2011
MIAMI-Prepare for the next wave of development in Downtown Miami. Bayfront 2011, a subsidiary of Genting Malaysia Berhad, snapped up 13.9 acres of land in downtown Miami for $236 million.
Bayfront 2011 plans to build a mixed-use development on a parcel that includes the building The Miami Herald currently calls home. Dubbed Resorts World Miami, the project includes hotel, convention, entertainment, restaurant, retail, residential and commercial facilities in line with Miami 21, the city’s comprehensive zoning code. The project will create thousands of construction and permanent jobs and bolster Miami’s position as a tourism hub.
“Resorts World Miami will be a landmark mixed-use development for Miami, Florida and the United States,” says KT Lim, chairman and CEO of Genting. “Downtown Miami has experienced dramatic residential and commercial growth in recent years, and we believe the addition of a large-scale mixed-use and entertainment complex will be a welcomed addition, further elevating the area’s status as a global destination.”
Bound by the MacArthur Causeway on the south, Biscayne Boulevard on the west, and the Venetian Causeway on the north, the site offers 800 feet of waterfront on Biscayne Bay. Both causeways link Miami International Airport with downtown Miami and South Beach. The land is located directly across the street from the Adrienne Arsht Center for the Performing Arts. Miami’s new Museum Park development, the future home of Miami Art Museum and Miami Science Museum, is located immediately to the south.
“This deal is not only a testament to Downtown Miami’s emergence as a destination, it is a strong indicator of its viability as a solid long-term investment,” Alyce Robertson, executive director of the Miami Downtown Development Authority, tells GlobeSt.com. “Projects such as this can have a significant economic impact on our region, enhancing downtown Miami’s standing as a world-class global city that will continue to attract national and international visitors and commerce.”
Genting is a member of The Genting Group, which has a 20-year track record of investing in the US. Genting entered Florida 11 years ago when it acquired Miami-based Norwegian Cruise Line. The Genting Group currently owns 50% of the cruise line. In 2006, Genting Group partnered with Universal Studios to build the Universal Studios Sentosa theme park in Singapore, which celebrated its grand opening over the weekend. Universal Studios Sentosa is part of the $4.5 billion Resort World Sentosa Singapore.
-Las Vegas- on a hill top (2000 above sea level), about 50km south-east of Kuala Lumpur, Malaysias only Casino is there plus theme parks, restaurants, resort
Miami Herald: Genting obtains Omni note
September 09, 2011
Genting, which purchased the Miami Herald’s headquarters, along with another nearby tract, has obtained one of two bank notes on the downtown Omni property. The principal balance on the note, whose acquisition was confirmed by a company spokesperson, is $45 million. The other note on the Omni was acquired by a group of investors including Related’s Jorge Perez. “I think their vision is pretty big,” said Miami City Commissioner Marc Sarnoff. “They’re here to stay and they’re here to build.” [Miami Herald]