Emergency loan saves KPFA from seizure for now

The parent company of listener-funded radio station KPFA-FM is aiming to keep the station on the air with an emergency $2 million bridge loan to pay off a legal judgment for back rent on a New York transmission tower.

A New York judge had ruled that Empire State Realty Trust could begin seizing assets of the Pacifica Foundation to cover a $1.8 million judgment against WBAI, the New York sister station of KPFA. Empire State Realty Trust had filed a motion in California to follow through on the seizure after a 30-day waiting period. The motion was to have gone into effect Monday.

Representatives of Empire State had promised to give at least one day’s notice before seizing assets, and before that happened a dozen Pacifica supporters came forth to chip in on the $2 million balance due. The loan was verbally committed by supporters of another Pacifica station, KPFK in Los Angeles, said Bill Crosier, interim executive director of the Pacifica Foundation.

“This would be a short-term loan to pay off the judgment, then the plans are to repay it with another, longer-term loan,” Crosier explained.

With the addition of the bridge loan, Pacifica is $8 million in debt, and that debt is growing every day. The rent on the transmission tower for WBAI, which sits atop the Empire State Building, is $60,000 a month, and the $2 million covers rent and interest only until last May. Pacifica has since incurred another $400,000 in unpaid back rent, on a tower lease that runs through 2020, with built-in annual increases of 9 percent.

“We seem to be stuck with the tower lease. That’s why I recommended filing for chapter 11 bankruptcy,” Crosier said. “But the Pacifica board has decided not to do that.”

Speaking from Houston, Crosier said a loan broker is shopping for a new $3 million loan to pay off the bridge loan, pay the accrued transmission tower rent and cover some unmet pension obligations. Pacifica is not a great candidate for favorable loan terms since it already has high debt and poor cash flow, he said.

One obvious way to raise cash is to sell its properties.

Pacifica owns four buildings free and clear — although there are tax liens on its two Berkeley buildings. One of them has been listed for sale for $1.5 million with Norheim & Yost, said Grace Aaron, a national board member.

Still, a long-term financial solution probably will involve signal swaps in which one or more of Pacifica’s powerful transmitters is traded to another station for a signal with lesser reach, with cash in the bargain, Crosier said.

“We have offers,” he said, “and all of them involve some pain.”

A likely candidate would be the signal for WBAI, which reaches 15 million people in the New York metropolitan area. WBAI is the worst-off financially of the five sister stations, Crosier said.

The signal for KPFA reaches most of the Bay Area. That signal is probably safe.

“KPFA is the most successful station financially,” Crosier said. “It would be irresponsible to mess with that.”