The buyer of 10 acres owned by The McClatchy Company in Florida is delaying the closing date for the $190 million purchase by six more months.
The sale was supposed to be completed Tuesday, but Citisquare Group LLC has exercised its option to extend the date for closing the agreement to Dec. 31, 2009.
Sacramento-based McClatchy (NYSE: MNI) is selling 10 acres in front of The Miami Herald’s bayfront headquarters to Citisquare, a partnership that was started by Knight Ridder Inc. and Pedro Martin, a Miami real estate developer and chief executive of the Terra Group.
When Herald publisher McClatchy bought the Knight Ridder newspaper chain in 2006, it inherited an agreement to sell the Herald’s 10-acre parking lot with no expiration date on the deal. The contract was later amended to require a Dec. 31, 2008 closing.
Today marks the second time the close of the deal has been extended.
Late last year, McClatchy gave the buyer an additional six months, until June 30, 2009, to complete the deal, saying the timing was not set in stone and the current state of the capital markets may adversely impact the buyers’ ability to obtain financing to close the transaction by the original contract date.
McClatchy, which is working to pay off about $2 billion in debt related to its purchase of Knight Ridder, the former parent company of the Herald, said earlier that the purchase price includes $10 million that it has received in the form of a non-refundable deposit. McClatchy ultimately will use proceeds from the sale to pay down its debt.
Closing the deal on this property has been problematic for a long time. The current value of this property has got to be much less than it was when the deal was agreed to. And in the current environment, who knows if the buyer is having trouble arranging credit for a loan. One consolation for McClatchy: by delaying the sale, the buyer is required to increase a fee to McClatchy.