Asias 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 Heralds 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 Miamis expanding development scene.
The deal happened quickly, after a long-standing contract to buy The Heralds 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. Its a wonderful piece of property, on the bay between the MacArthur and Venetian causeways.
Cannon said the deal wasnt 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 Miamis 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.
Its a $236 million windfall to our company in total cash, Landsberg said. There isnt 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. Were 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 McClatchys underfunded pension plan, according to Chief Executive Gary Pruitt. Another $65 million will pay down the companys 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 Heralds 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 Thursdays 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 Cannons research.
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