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KPFA Radio put at risk by $1.8 million judgment against Pacifica Foundation

December 28, 2017

Empire State Building

by Lynda Carson

Dec. 28, 2017Legendary KPFA Radio, 94.1 FM, in Berkeley has reportedly been placed at risk due to $1.8 million awarded in a summary judgment to Empire State Realty Trust, Inc. (ESRT). Additionally, attorney’s fees against the Pacifica Foundation and WBAI Radio in New York, KPFA’s sister station in the Pacifica network, have been granted because of a feud over alleged unfair, unreasonable and exorbitant annual increases in the rent for situating the station’s transmitter at the top of the Empire State Building in New York City.

Pacifica Foundation, owned and purportedly governed by its listeners, holds the broadcast licenses for KPFA in Berkeley, WBAI in New York, KPFK in Los Angeles, KPFT in Houston and WPFW in Washington, D.C.

The 6:00 p.m. KPFA Evening News on Dec. 28, 2017, reported that the Pacifica Foundation board members were deadlocked on a vote this evening to go into foreclosure or file for Chapter 11 bankruptcy, due to over $2 million owed to ESRT in unpaid tower rent at the Empire State Building.

Interviewed on the news broadcast was Pacifica Interim Executive Director Bill Crosier, who stated that the Pacifica Foundation is in peril with debt totaling over $8 million. KPFA may shut down on Jan. 8, 2018, if the dispute with ESRT is not resolved, Crosier said, adding that nothing has been paid to ESRT since last May.

He stated that if Pacifica files for Chapter 11 bankruptcy, they can protect their assets, including KPFA radio. Pacifica is also seeking a loan to settle the law suit and pay other debts.

In a Dec. 27 email to KPFA staff, KPFA General Manager Quincy McCoy wrote under the subject line “The Imminent Threat: IMPORTANT:

“I’ve held off writing this depressing message as long as I could in an effort to gather as much information and analysis as possible while working with current and former Local Station Board members in trying to protect KPFA’s interests in this grim situation we find ourselves in.

“Because of Pacifica’s critical financial condition and the Pacifica National Board’s lack of strategic action or courage, the prognosis for the network’s future is shadowy.

The Imminent Threat

“Come Jan. 12, KPFA’s money and property may be seized by the Empire State Realty Trust because of a $1.8 million debt of our sister station WBAI.

“If this happens, we will cease broadcasting because we will be unable to operate the station. At that point, our building and our bank account will no longer be under our control. Needless to say, this is a terrible position to be in, especially for management when there is still no plan of action to articulate from the national leadership to the staff.

How Did This Happen?

“WBAI owes the Empire State Realty Trust $1.8 million in delinquent transmitter rent. [Plus more delinquent rent since April, not covered in the suit.] ESRT filed in court against Pacifica on Nov. 23, 2016. Their monthly rent is currently at $53,000 per month, escalating each month.

“On Oct. 4, a judge found in favor of ESRT making it possible for them to file in all states where Pacifica has properties, allowing them to seize money and property.

“The idea of a signal swap for WBAI was ignited and brokers were hired.

KPFA entrance

“The PNB voted to give IED the authority to begin preparation for Chapter 11 bankruptcy protection, but he and many others on the PNB thought to sell properties (like our two adjacent buildings) and others could cover the debt. The other idea was a high-interest loan that so far has never been secured. All of these instead of the signal swap in New York.

“Then the PNB rescinded the bankruptcy resolution. Also, KPFA and KPFK signals were added for signal swaps.

“ESRT judgment filed in California on Dec. 6 to seize property and money from KPFA and KPFK [editor’s conjecture; only the letter K appears]. It is a 30-day waiting period that ends Jan. 12.

“Then the PNB voted to allow some prep for bankruptcy.

“At the PNB meeting two weeks ago, California Deputy Attorney General Julianne Mossier spoke and made it clear that the board needed to vote to take action immediately and that anyone who obstructs for any personal reasons is liable for not carrying out their fiduciary duties.

“The board ignored her plea and set up an emergency meeting about moving ahead with bankruptcy the following Monday, but no action was taken.

“The clock is ticking …

What is Being Done?

“I want to thank all the LSB members who have worked so diligently this year negotiating with the PNB in good faith to move the network in a positive direction while also protecting KPFA’s interests.

“Because of the imminent threat of a lien on KPFA’s bank account, we have disbursed in advance (what is legally allowed) to our payroll account to Dec. 31 and medical benefits till February, and all of our essential bills are paid. In the first week of January, we will process advance payroll for January and pay another month of medical. I’m sorry to say that is all management can do. There still is no playbook for a month or two months down the road.

“What is the PNB doing? The governance structure of Pacifica, our historic culture of the usual political infighting etc., has led to disagreement and paralysis. Unless action is taken pretty immediately, we may cease to exist. You deserve to understand where things stand. I could wait no longer.

“Much respect, Quincy McCoy, General Manager. In times of crisis, unity is the only solution.”

In a July 11, 2017, press release, Pacifica Interim Executive Director Bill Crosier asserts regarding the transmitter rent: “The amount being charged is over four times the market rate in New York and threatens the future of independent radio. Market rate for FM transmitter tower leases in NYC is now about $12,000 monthly. WBAI’s bill for the month of May 2017, in contrast, came to over $53,000. We’ve been on the Empire State Building since 1965 and have always been willing to pay what’s fair and reasonable, but these exorbitant annual increases are killing us. The ESRT must settle and release us from the rest of this onerous contract.”

According to that release, “ESRT is demanding over $2 million for unpaid tower lease costs, holding the network hostage in an annually escalating contract involving increases of about 9 percent per year. ESRT is a multinational corporation that held $554.4 million cash and cash equivalents as of December 2016 and owns billions of dollars of real estate.”

“After the destruction of the Twin Towers in 2001, broadcasting stations in the NYC area had few options for antenna space rental. ESRT took advantage of its position in the market. In 2005, their owners negotiated a highly questionable contract with Pacifica. ESRT has refused to release Pacifica from the contract, which is scheduled to continue until 2020.”

KPFA is the first listener sponsored radio station in the United States. The legendary history of the radio station is known across the country and the planet.

A community based listener governed radio station, KPFA has supported the local community for many years and would be sorely missed if ESRT were to take over the station and Pacifica’s assets.

Lynda Carson may be reached at tenantsrule@yahoo.com. This story first appeared on Indybay.

10 thoughts on “KPFA Radio put at risk by $1.8 million judgment against Pacifica Foundation

  1. Lynda Carson

    Real estate mogul Tony Malkin wants KPFA and Pacifica Foundation properties

    By Lynda Carson — Saturday Dec 30th, 2017

    [[[Reportedly, Empire State Realty Trust, Inc., may take control of KPFA Radio – 94.1 FM, and the entities controlled by the Pacifica Foundation as soon as January 8, or January 12!]]]

    Click below for full story…

    https://www.indybay.org/newsitems/2017/12/30/1880

    >>>>>>
    >>>>>>

    Reply
  2. Don DeBar

    I just reviewed the court records in New York County, Alameda County and US Bankruptcy court. I see nothing that requires anyone to do anything by January 8 or 12, 2018. WTF is that about?

    Reply
  3. Ann Garrison

    KPFA may shut down on Jan. 8, 2018, if the dispute with ESRT is not resolved??? With all due respect to IED Bill Crosier, that's an alarmist statement without specifics. What could happen on Jan. 8? Empire State might be able to seize all of KPFA's cash assets. They could also put a lien on KPFA's real estate establishing their cash interest upon sale. They can NOT seize the broadcast license, and if KPFA's paid programmers refuse to work without pay, the station can stay on the air by playing music, archives, or substitute programming indefinitely. The biggest problem keeping the station on air would be paying the electricity, water and garbage bills, and whatever else is required to keep the station running at the most minimal level.

    Reply
  4. Tracy Rosenberg

    More details here: http://pacificainexile.org/archives/2518

    There are actually several options and alarmist is not always the way to go. There's a loan that looks to be available that would pay off the summary judgment to Empire State right away, prevent any collection threat and be interest only for three years, allowing plenty of time to look at signal swap or sale. Pacifica Foundation is far from actually "bankrupt". It owns $10 million in real estate in three different cities and has interests in broadcasting license worth $80-$100 million dollars. The actual debts are in the $5-$6 million range and only about $3.5 of that is urgent or pressing.

    Bankruptcy has problems. The legal fees are estimated at close to a million dollars. That's a lot of listener money down the drain. Yes Pacifica can propose a plan, but so can the creditors committee (led by Empire State) and the judge can choose either and when one delivers payments to creditors a lot faster and is much simpler, it has an advantage.

    Pacifica has already received signal swap offers, 5 of them, in the last two months, for all frequencies except the one in Texas, ranging from $5 to $15 million dollars. The smallest and least destructive is actually for KPFA and the biggest and most destructive is for WPFW in Washington DC. Any of them would clear the debts in total, but they need 1-2 years to get through the FCC.

    The clearest path through is a loan and then a signal swap. Doesn't require bankruptcy and there's a lot to be said for not getting into court with a capitalist billipnaire with a pricey and vast lawyer's corp and hoping a federal judge will be nice to you.

    Independence is pretty precious, besides being part of the term "independent media". Don't give it up easily.

    Reply
  5. Lynda Carson

    Updated: January 1, 2018

    A Rude Awakening – January 1, 2018

    https://kpfa.org/player/?audio=275805

    On Monday January 1, 2018, at 3:30PM, Sabrina Jacobs the host of the show "A Rude Awakening," had a half hour show with Bill Crosier the interim Director of the Pacifica Foundation for a discussion about the the pros and cons of getting a loan, or going into bankruptcy.

    Bill Crosier stated that it would cost around $500 thousand to a million dollars if they go into bankruptcy, and mentioned some of the risks involved if they file for bankruptcy.

    On the other hand, he also stated that if Pacifica gets a loan to pay off it’s debts, they would need to keep getting one loan after another to keep paying off the former loans, and that it would be a downward spiral from one loan to another. He mentioned that Pacifica is in debt around 8 million dollars in total, and in addition to what is owed to ESRT, Pacifica owes a lot of money for pensions, including a huge debt to Democracy Now.

    During the show, Crosier stated that there is a lot of infighting going on with the board members at Pacifica. He did not name the board members that have been obstructionists. However, some people have repeatedly mentioned a certain board member (an attorney that ran unsuccessfully for mayor of Oakland) that is to blame for much of the obstruction, and infighting going on at Pacifica.

    Crosier suggested that they needed to change the by laws of Pacifica so that they can change the board members easier, because of the obstructionists on the board.

    He said that the board members spend too much time fighting with one another, when they should be trying to figure out how to get more listeners and members for KPFA, and the other radio stations in the Pacifica network.

    In brief, Bill Crosier supports going into bankruptcy, but believes that he is being obstructed by other board members of the Pacifica National Board (PNB). He urged listeners to contact the PNB at pnb@pacifica.org to voice their concerns.

    Lynda Carson

    >>>>>>>>>>>

    Reply
  6. Obama Hussein

    The problem is niggers.
    WBAI is overrun with them and also infested with fags.
    They spent all the money on gay whores.
    That's why you broke and going out of business.
    TRUMP 2020

    Reply
  7. MDWhite

    This is great…just another example of 'progressive' libs running face-first into The Great Wall of Reality. You play, you pay when the bill comes due, kiddies. Nothing is free.

    Reply
  8. Lynda Carson

    >>>>>>>
    Update: KPFA – https://kpfa.org/

    Update: Jan. 3, 2018 KPFA Radio crisis

    On Wed. January 3, 2018, 6:00PM on the Pacifica Evening News, it was reported that late last night the Pacifica National Board (PNB) voted to approve 2 loans to help pay off what is owed to the Empire State Realty Trust (ESRT). However, it was reported that it was not clear if the 2 loans would be enough money to convince ESRT to not seize the assets of the Pacifica Foundation, including KPFA. The rest of what is owed to ESRT would be payed back at a later date, when more loans could be available, or approved by the PNB.

    The loan news update appeared around 6:55PM in the Jan. 3, 2018 – KPFA / Pacifica Evening News report.

    Additionally, tomorrow at 8:OOAM on KPFA Radio at 94.1 FM, there will be a discussion about the crisis, and it is expected that at around 8:30AM, that the phone lines will be open to hear from the public for a question and answer session.

    KPFA – The Pacifica Evening News – January 3, 2018

    https://kpfa.org/player/?audio=276462

    (LC)

    >>>>>>>
    >>>>>>>

    Reply

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