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Star-Telegram printing deal hits economy, town

 

Tim Tune
Special to the Business Press

Edgecliff Village, a small municipality surrounded by south Fort Worth, may be losing its No. 1 taxpayer in early 2014 but Mayor Tony Dauphinot says the shutdown of the Fort Worth Star-Telegram’s printing plant in his town is “not going to hurt us.”
The plant is on a 31-acre site near the intersection of Interstate 20 and Interstate 35, just inside the city limits of Edgecliff Village, a city of 1.9 square miles and about 3,000 residents.


On Nov. 6, the Star-Telegram announced it had reached an agreement to have the paper printed at a Plano production facility owned by the Dallas Morning News.
The Star-Telegram reported that more than 75 full-time and 200 part-time jobs at its plant will be eliminated and that the facility – built in 1986 for $70 million – and the property will be sold.
Terms of the agreement were not announced, the Associated Press 
reported.
According to the Star-Telegram, Publisher Gary Wortel said that the long-term agreement includes printing the Star-Telegram as well as the company’s community niche publications and that packaging and trucking functions will be handled from that printing plant as well.


“This agreement allows us to effectively consolidate production needs and realize long-term cost savings without impacting our readers,” Wortel told the newspaper.
“The Morning News has ample capacity to meet our needs and has earned a first-class reputation as a quality printer for its customers. We will continue to focus our efforts and resources s on core strategies to produce quality journalism and to offer customized print and digital solutions to our advertisers.”
The Business Press contacted Wortel’s office and was told that Wortel had nothing further to say about the decision.
Owned by Sacramento, Calif.-based The McClatchy Co., the Star-Telegram has undergone a series of voluntary layoffs and cutbacks in recent years. The newspaper announced mandatory one-week furloughs for staffers at the beginning of this year, as well as 
layoffs.
Dauphinot said he heard of the decision in a phone conversation with Wortel, who called the mayor on 
Nov. 6.
“Who knows what we can get” to replace the printing plant, said Dauphinot. “It’s a good piece of property,” he said.
The Tarrant Appraisal District lists the property’s overall market value at $7 million. The 271,289-square-foot building is valued by TAD at $2.29 million, and the land at $4.7 million.


The business personal property in the facility – primarily presses and “fulfillment” equipment used to process circulation orders for mail and carrier distribution – is valued at $4.9 million by TAD.
Randy Seidel of GIS, a Pennsylvania-based company that manufactures and refurbishes printing equipment and also handles sales of equipment for printing plants that are closed, said the equipment could have a value of “several million dollars” on the resale market.
Taxes from the property represent about 8 percent of Edgecliff Village’s tax base, Dauphinot said. That’s much less than the 22 percent of ad valorem “when I became mayor in 2007,” he said.
Over the years, he said, the property has been devalued by TAD.
“I’m not saying 8 percent isn’t important,” Dauphinot said. “It is. But I don’t think we’ll be any worse off” if the property is bought by another industrial user.


And, he added, “we could get lucky and get a retailer in there” and collect a 1 percent sales tax.”
Partnering with the Dallas Morning News is “a good deal for the Star-Telegram,” Dauphinot said.
A Texas Christian University journalism professor familiar with the newspaper business agreed.
“It’s an effort to sustain the identity of the newspapers,” said John Lumpkin, director of the Schieffer School of Journalism. He said the agreement shows “a willingness for the newspaper ownerships to put aside the same old models so they can preserve journalism in their separate markets for the existing portion of their audiences that prefer their journalism to be on 
newsprint.”
“Joint printing operations are not new,” Lumpkin added, “but the partnership of two competing dailies in printing is a relatively new phenomenon. Editions of USA Today, the New York Times and the Wall Street Journal, for example, have been printed by local newspapers on a regional basis for some time.”


“What is interesting to me is that there is enough press capacity at [the Morning News’ plant] for the Star-Telegram to be printed concurrently with the Dallas Morning News so that there is no apparent issue in whose deadlines come first and whose come later.”
In addition to the new printing arrangement, the Star-Telegram and Morning News share some content and distribution functions.
 

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