Michael Horne
What’s It Worth?

Journal Sentinel Buildings Worth A Lot

Value of entire block and two buildings pegged at $13 million.

By - Jan 21st, 2019 12:10 pm
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Milwaukee Journal Sentinel Headquarters

Milwaukee Journal Sentinel Headquarters

The Journal Sentinel Building (333 W. State St. – 918 N. Vel R. Phillips Ave.): $11,813,000

Major Goolsby’s Building (340 W. Kilbourn Ave.): $1,181,000

The Milwaukee Journal Sentinel is much in the news lately, with both its fate and its real estate making headlines:

  • Six veteran newsroom staffers left in an end-of-year buyout; another round of layoffs was announced this month. Veteran journalist Crocker Stephenson said January 15th that he would accept a buyout and leave the paper. Other departures are expected to be announced in the coming week. There are 261 employees remaining at the downtown headquarters.
  • Digital First Media plans a buyout as well. The hedge fund known as “The Destroyer of Newspapers” offered $1.36 billion for all 100+ papers owned by Gannett Co., the nation’s largest newspaper publisher measured in terms of circulation. Gannett has owned the Milwaukee newspaper and its real estate since April 2016.
  • It was also reported this week that the Journal Sentinel complex, occupying an entire city block downtown, is in the process of being sold to local developers.

A Prime Site Downtown

The Journal Sentinel property, last transferred in March 2015 for $11,900,000, was among those once considered as a site for the Bucks arena. A 2017 attempt by Gannett to sell it to an office developer failed, and the property was brought back on the market last year. (At the time there rumblings that Gannett might move the JS offices to a Brookfield strip mall, which left some of its journalists aghast.)

The Gannett company affirms that it is in talks with developers to purchase the property. Interstate Development Partners LLC, and J. Jeffers & Co. have been mentioned as the likely purchasers, although this has not been confirmed.

The Journal Sentinel complex occupies the entire 3-acre block situated between N. Old World Third St., N. Vel R. Phillips Ave., W. State St. and W. Kilbourn Ave.

The heart of the complex is the 1924 Milwaukee Journal building located at 333 W. State St. It is a 6-story stone structure consisting of 256,429 square feet, yet is now three-quarters empty. It was designed by Chicago architect Frank D. Chase, with an undistinguished 1961 addition by Eschweiler, Eschweiler and Sielaff.

Major Goolsby's. Photo by Michael Horne.

Major Goolsby’s. Photo by Michael Horne.

The property also includes a vacant 4-story, 181,792-square-foot 1918 Alfred C. Clas building located at 918 N. Vel R. Phillips Ave., converted for the use of the Milwaukee Sentinel after the Journal bought its morning rival in 1960. These connected buildings, assessed at $4,144,700, are located on a 127,805 square foot lot valued at $7,668,300 ($60/s.f.). The 2018 property tax bill for the parcel was $333,889.61.

A much smaller parcel is a 6,600 square foot lot valued at $396,000 ($60/s.f.). It is the home of Major Goolsby’s, a 6,466 square foot sports bar with a total assessed valuation of $1,181,000. The 2018 property tax bill for the parcel was $33,333.40. (See Bar Exam: “Major Goolsby’s Still a Great Sports Bar“, Urban Milwaukee, October 14th, 2015.)

Development Potential Seen

The site has become increasingly attractive since the opening of the Fiserv Forum two blocks to the north. Jeffers has experience with historic properties, adapting them to office and residential uses. The 333 W. State St. building, of substantial construction, would appear to have the greatest potential. Later additions and the nondescript Sentinel building are more questionable. Major Goolsby’s is only one story, and a good deal of the property is a surface parking lot. Redevelopment would not be a simple matter, absent a single large structure.

Was Once Downtown Hub

The ornate Journal Building lobby at 333 W. State St. is fitted with a rectangular desk in the middle and once had a busy staff handling numerous public service activities. Readers could pay their bills, dictate a classified ad, read back issues in bound volumes, buy bus passes or tickets to events, and drop off entries to contests. School groups would regularly line up for tours of the building, where printing plates were cast from molten metal upstairs, and later mounted on basement presses, visible from the street outside. Tour goers would emerge clutching miniature copies of the newspaper while wearing hats such as the printers wore, fashioned from sheets hot off the press. Those days are long gone.

A Dreaded Potential Purchaser for Paper

Gannett bought Journal Media, now looks to sell. Photo by Michael Horne.

Gannett bought Journal Media, now looks to sell. Photo by Michael Horne.

Adding to the drama behind Gannett’s interest in selling the Journal Sentinel campus is the offer by MNG Enterprises (also known as Digital First Media) to purchase Gannett and its holdings, including the Milwaukee paper and its real estate. MNG is owned by Alden Global Capital, a hedge fund that already controls 7.5 percent of Gannett stock and 56 newspapers, including the Denver Post and Boston Herald. An open letter to the Gannett board from MNG complained that the publisher’s “unfocused leadership team” was not sufficiently vigilant in cutting costs and maximizing shareholder value. That’s saying something, considering Gannett’s ruthless pruning of staff and expenses — and news coverage.

What could be in fate for Gannett and its papers, including the Journal Sentinel, if this latest takeover occurs?

Joshua Benton is the director of the Nieman Journalism Lab at Harvard University, established in 1938 with a $1.4 million bequest from the widow of Lucius Nieman, the founder of the Milwaukee Journal.

Benton told the New York Times on January 15th that

“Digital First is the worst owner of newspapers in America and they will do their best to draw blood from even Gannett’s already desiccated stone.”

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