The McClatchy Co. said Friday that it has contributed six of its real estate holdings to its defined benefit pension plan, including its Doral property.
The Sacramento-based newspaper chain publishes 29 dailies, including the Miami Herald. In addition to the Doral real estate, the properties are in Raleigh, Charlotte and Garner, North Carolina; Gulfport, Mississippi, and Fresno, Calif. Independent appraisals have valued the properties at $47.1 million in total.
McClatchy plans to lease back the property from its pension plan for 11 years, paying an aggregate annual rent of about $3.5 million into the plan. The contribution will have no impact on day-to-day operations at the properties, which will be managed by WhiteStar Advisors, LLC, an independent real estate advisory firm, McClatchy said.
The move is expected to “more than satisfy” the company’s pension contribution for the year required under federal law, according to a McClatchy news release.
“We view this as a win-win transaction for both the pension plan and the company,” said Elaine Lintecum, McClatchy's chief financial officer, in a statement. “Our pension plan will benefit from rental income paid by the company and we expect it to also benefit from price appreciation as these properties hopefully gain in value over time. The company will, in turn, preserve its cash to repay debt.”
The company will receive a cash tax benefit of about $10 million on its 2015 tax returns, she said.