GCI moves to evict Alaska Dispatch News

GCI filed an eviction notice against Alaska Dispatch News owner Alice Rogoff on Aug. 11 alleging non-payment of rent for July and August and running up unpaid utility bills since February that together total nearly $1.4 million

GCI filed the Forcible Entry and Detainer complaint in Alaska Superior Court Aug. 11, asking for payment of what is owed at the Northway Drive building that houses the Dispatch printing press as well as damages in excess of $1 million.

Total rent and utility bills due to GCI is $1.39 million as of Aug. 11.

The electricity bills mounted to $29,000 in February to more than $46,000 by July. GCI estimates it is paying more than $1,500 per day in utilities attributable to the Dispatch operations.

“It is extremely unfortunate that GCI has taken this legal action to evict us from our press facility,” said Rogoff in a statement to the Journal. “The events that led us to this point have been extremely complex. At no point has there been any bad faith on the part of the newspaper. Our goal has always been to keep Alaska’s largest newspaper alive and robust for the sake of our readers and the community. Our goal remains unchanged and we are in active discussions toward that end. Until the discussions are concluded, we are unable to provide any details. Please know that business disputes arise from many causes and are never one-sided. We hope that this matter will be resolved shortly to the benefit of all parties.”

Meanwhile, the press continues to be operated to put out the Alaska Dispatch each day, said GCI spokesperson Heather Handyside. GCI doesn’t intend to lock the Dispatch out of the facility.

“We’re hoping to gain access and control of our facility back,” Handyside said. “The Dispatch has operated since December with no lease. We would like to take ownership and to be repaid the debt owed, which is $1.4 million at this point. And then we are seeking compensation for expenses of getting the press out of the facility.”

GCI currently has six warehouses located around Anchorage where it must store products and equipment that was meant to be moved to the Northway property more than two years ago, she added. Purchase of the 126,691-square foot space was attractive for consolidating operations, using conference rooms and inventory.

‘We’ve used a few back offices and the conference rooms a few times,” she said, but mostly GCI hasn’t been able to enjoy use of its building purchase since the agreement was made. “Our plans have been on hold for a while.”

Even early on, Rogoff failed to make good on her agreements when GCI completed more than $200,000 for IT work on the new building at 300 31st Avenue currently housing the newsroom and advertising operations.

“When they weren’t able to pay for that, we accepted in-kind advertising in lieu of payments. We’ve been kind of subsidizing the operation. We can’t keep sustaining their operations,” she said.

A court date has been set for later in August when the situation may be resolved, Handyside said. In the meantime, if the Dispatch owner comes back into negotiations, “we certainly would consider it.”

GCI lays out the chronology of its complaints starting with the original agreement in April 2014 when the Alaska Dispatch Publishing, owned by Alice Rogoff, entered into an agreement with GCI.

The telecom company wanted the space at 1001 Northway Drive that housed the Anchorage Daily News under the McClatchy Co. In purchasing the newspaper, Rogoff was to use the money from GCI for the sale of the building to help pay McClatchy for the newspaper. The ADN had operated out of the distinctive white three-story on DeBarr and Northway from 1984 to 2014.

Rogoff, and GCI entered into an agreement to purchase property from the Alaska Dispatch/Anchorage Daily News as a component of a multi-step stock purchase transaction enabling the Dispatch to use GCI’s cash payment to purchase McClatchy’s interest in the newspaper. The payment included advance purchasing of advertising worth $500,000 that would appear in the future on the Dispatch website and in print.

On May 5, 2014, Rogoff closed on her two related purchase-sale transactions. She bought out McClatchy’s stock and sold the Northway Drive property to GCI.

But Rogoff’s new newspaper operation remained tethered to the Northway building because the printing press was located there. Her agreement with GCI was as a temporary tenant who would pay rent through November 2015. The “holdover rent” was set at 250 percent of the base rent as an understanding by both sides that exiting the premises as quickly as possible was the goal.

Meanwhile, Rogoff moved the news operations into a new office location at 300 W. 31st Ave., which required its own remodeling.

According to GCI’s complaint, filed by the firm Ashburn & Mason, Rogoff/Alaska Dispatch didn’t pay invoices of $205,558 for work GCI completed on the new office premises on 31st Avenue and C Street.

In Jan. 21, 2016, GCI agreed to a take advertising credit in lieu of rent. The parties amended the lease so that Rogoff was granted two 12-month extensions for the warehouse on Northway Drive, but it was to expire Nov. 30, 2016.

In November 2016, Rogoff and GCI conducted a series of meetings in which the Dispatch indicated it was making progress in removing the printing press from the premises. But despite giving notice of terminating the lease, Rogoff’s operation didn’t move. She remains in possession as a “tenant at sufferance,” which means continuing to hold onto property without the landlord’s consent.

Though in December and January 2017, Rogoff continued to hire contractors to complete work on removing the printing press, GCI alleges she did not pay several contractors and two of them, Anchorage Sheet Metal LLC and M&M Wiring Service, filed liens on the property.

The M&M Wiring lien was released March 1. But the Anchorage Sheet Metal lien, in the amount of $4,775, remains on the property.

GCI continued to negotiate a settlement in February to provide for repayment of the outstanding rent. GCI permitted the Dispatch to remain in the Northway building and GCI agreed to take more advertising in lieu of late rent.

But Rogoff didn’t agree to GCI’s proposed terms and negotiations ceased at the end of February.

“The Dispatch’s failure to vacate the warehouse space has prevented GCI and its affiliates from utilizing the property for its own purposes,” GCI wrote in the filing. “Following the Dispatch’s initial refusal to vacate the premises in 2015, GCI took various steps including renegotiation of short-term leases at relatively unfavorable terms to accommodate GCI operations slated for move to the Premises.

“GCI has continued to accommodate (the Dispatch) and failure to vacate the premises by renegotiating leases and operating multiple disparate warehouse operations across Anchorage.”

At the time of the filing, GCI said Rogoff has neither “disassembled nor removed its printing press.”

The cost to restore the warehouse to a useable state is estimated to be more than $1.5 million.

“Since February of 2017, GCI gave alternatives to Rogoff to enable the newspaper to continue operation and prevent a forcible eviction. But none of the alternatives were acceptable to Rogoff,” states GCI in the filing.

Three times GCI also delivered default notices to Rogoff in March, April and July. On Aug. 9, GCI delivered a no-cure Notice to Quit.

Naomi Klouda can be reached at naomi.klouda@alaskajournal.com

Updated: 
08/11/2017 - 4:13pm

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