Firm says it will buy newspaper building

Patriot Equities LP of Wayne says it has agreed to buy the Inquirer and Daily News headquarters in Center City and will seek to rezone and refurbish part of the underused complex for retail services.

"We're the selected buyer for the building and the lot and garage behind it," said Patriot president Erik Kolar. The property stretches from Broad to 16th Streets north of Callowhill Street. Kolar said he expected the deal to close within the next three months.

Philadelphia Media

Holdings, which owns the building along with the two newspapers, the Philly.com Web site and other publications, will not comment on terms of the sale or plans for the site until a definitive agreement is signed, said Bill Luff, managing director at the Philadelphia office of Jones Lang LaSalle, the real estate firm advising

Philadelphia Media Holdings.

PMH chief executive Brian Tierney stressed that "no deal has been signed."

Luff said

Patriot survived a "lengthy and thorough" bidding process. "Patriot's acquisition criteria and the types of projects they do are very similar to the type of opportunity here," Luff added. "That track record gives you a good feeling."

Philadelphia Media says it plans to use proceeds to help pay off debt that helped fund its $515 million purchase of the papers and their related Web sites and other publications two years ago.

Kolar said that the papers' continued occupancy of part of the site and the need for rezoning were factors in the negotiations.

"Patriot usually comes in where a company wants to get a property off its books and lease it back," said Glenn Blumenfeld, partner at Tactix USA, a Radnor firm that represents corporate tenants. "Now the trick is to get value out of the rest of the property."

Kolar said he expects PMH will keep the papers' news operations in the building. Nearly 1,000 of the 2,500 people who work for PMH are based at the headquarters, while press, trucking and some news and business operations are at the company's Upper Merion Township plant and smaller suburban offices.

Tierney has explored the possibility of moving some business operations to other locations in the city, Camden, or the New Jersey suburbs.

Developer David Grasso, Drexel University and Philadelphia Family Court were among prospective buyers and tenants that toured the complex after Philadelphia Media put it up for sale last year.

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