UPDATE: Cedar Rapids developer Steve Emerson buys The Gazette's building

The Gazette Co. will lease back front portion of building; loading dock area to be demolished

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CEDAR RAPIDS — The Gazette Co. has sold its building at 500-512 Third Ave. SE to downtown developer Steve Emerson.

The building, the oldest piece of which fronts Fifth Street SE and dates to 1923, has been the public face of The Gazette daily newspaper for 90 years.

Chuck Peters, The Gazette Co.’s president/CEO, said the reason for the newspaper building’s sale is “pretty simple.”

The building, he said, has held more space than the company has needed since the company stopped printing the newspaper downtown in 1999 and moved the printing operation to a former Rockwell- Goss plant at 4700 Bowling St. SW. As much as half of the downtown newspaper building has gone under-used or unused, he said.

“We have considered many options to use that excess capacity over the years and have determined that it is best that we let someone else develop that excess capacity because that is not a business we are in — the redevelopment business. And Steve Emerson is,” Peters said.

The Gazette Co.’s Third Avenue SE building includes three additions, which came in 1954, 1969 and 1985.

A first order of business, Emerson said Friday, will be to demolish the loading dock area at the back of the building and create a parking lot, which he said will be used by tenants in the new three-story office building he has built across the street at 600 Third Ave. SE.

Emerson said he will renovate the 1923 piece of his just-purchased building and lease it back to The Gazette Co., which plans to locate its Fusionfarm Marketing Services group there and display the Fusionfarm sign on the building’s exterior.

Much already had changed inside the building in the past two years, where the second floor has become the current home of a merged newsroom for all the company’s news operations -- the newspaper, KCRG-TV9, TheGazette.com and KCRG.com.

In the months ahead, the merged newsroom will move next door to company’s building on Second Avenue SE, which most know as the KCRG building. The building houses the company’s broadcast studio and weather staff and will be home to the company’s corporate offices.

A new sign on the front of the Second Avenue SE building will read Iowa Source Media Group, which is the umbrella name for the company’s newspaper, TV and online news operations.

The sale of The Gazette Co. building is a reflection of the dramatic changes that have come to the news industry. The Des Moines Register, for instance, also is selling its longtime downtown home, which opened in 1919, and is moving to smaller space in downtown Des Moines.

Elizabeth Hladky, the fifth generation of Hladky family involved in The Gazette Co., on Friday noted that the family’s news business had been located in several spots until the family built the 1923 building and committed to this downtown block.

“But our commitment to the community is not based in any building,” said Hladky, director of community relations for the company and secretary of its board of directors. “Although it’s always nice to be located in the heart of downtown. It’s still a hub of activity.”

She said moving the news operations into the KCRG-TV9 building by the middle of 2013 will “set us up to be able to be the company we need to be for the future.”

Developer Emerson emphasized that the 1923 piece of the newspaper building will remain in place, but “I’m open to everything” when he talked about what else might happen with it.

The rest of the building might be renovated and used for offices, or it could be demolished to make way for a new building, either an office building or perhaps a residential tower, he said.

Emerson, 42, is an architect and has become an active downtown developer.

Earlier this year, he won economic-development incentives from the City Council because, as council member Kris Gulick put it then, Emerson was assuming substantial risk as the first developer to build a new office building downtown in several years.

Emerson said Friday that his list of downtown properties also includes the Town Centre, Palmer and Paramount office buildings, the building that houses the Zins and Bella restaurants, and the building that is home to the Blue Strawberry coffee shop.

He has offers to purchase the Downtown Tire Co. building, 402 Second Ave. SE, and the Coopacabana building, 529 Fourth Ave. SE, and expects to close on both properties next week, he added.

Emerson said he needs to continue to buy properties “if I want to keep redeveloping and improving the downtown.”

Cedar Rapids residents did not need Friday’s announcement of The Gazette Co. building sale to know the media company has been looking at its options for some time. The company offered to sell both its downtown buildings in early 2010 to make way for the city’s new library, but the City Council chose to locate the library on a nearby block instead.

The Gazette’s Peters on Friday said the company has looked at a dozen or more options in trying to come up with a plan for the future, including some that would have moved the company out of the downtown.

“And after looking at all those plans, we believe this is the very best plan,” he said.

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