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St. Paul HRA Reconsideration Failure (1/3/05)HRA decision on conduit bonds for financing of WCAL purchase (12/9/04)
Statement regarding bonding for construction of new MPR building and financing of the acquisition of WCAL (12/5/04)
Press Release: Minnesota Public Radio introduces new classical music broadcast schedule, to begin Sunday, Nov. 21 on its new station, WCAL (11/15/04)
Press Release: FCC approves WCAL sale (11/15/04)
Press Release: Statement by Bill Kling (08/10/04)
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Bill Kling speaks with Gary Eichten and takes listener calls (08/19/04)Bill Kling speaks with Marianne Combs (08/10/04)
Your Voice
What should a third MPR broadcast service in the Twin Cities offer?Discuss the prospect of a third broadcast service in the Around MPR forum
December 5, 2004
OPPORTUNITY AND OBLIGATION
When St. Olaf College told MPR they had decided to sell their station WCAL in order to focus their resources and their attention on their educational mission, MPR saw their decision both as an opportunity and as an obligation.
It was an opportunity for MPR to fulfill one of its strategic goals of providing a more diverse range of public radio services - news & information on one station, classical music on a second station, and diverse & eclectic music with a service orientation on a third station.
And it was an obligation to retain WCAL as a Minnesota-based public radio station. MPR was likely the only organization in Minnesota that was able to consider purchasing the station and keep it operating as a public radio station.
In "shopping" the station, the only other qualified buyer found by St. Olaf's broker was Educational Media Foundation, a national religious organization based in Sacramento California that runs a network of stations called the K-LOVE network. EMF would probably not have kept employees in Minnesota to program the station, as they generally provide the same automated program service to all their stations.
THE IMPORTANCE OF A LOWER FINANCING RATE
MPR will be severely stressed to make payments on the financing without the lower interest rates afforded by tax exempt financing.
The availability of long term tax exempt financing was one of the key factors that the MPR Board of Trustees weighed when they made the decision to purchase WCAL. By utilizing this lower rate of financing, MPR can operate WCAL without hurting their other public radio services. Thus, this financing will benefit the public services that MPR provides.
MPR closed on the purchase of WCAL on Friday, November 19, using a swing loan from a bank. At the time they committed to the swing loan, MPR anticipated and relied upon their ability to repay the swing loan with long term tax exempt financing, based on a preliminary resolution that the HRA unanimously adopted on October 27.
EMPLOYMENT AND CONSTRUCTION BENEFITS
As part of the acquisition, MPR hired six WCAL staff members and added them to their Saint Paul workforce. MPR intends to add yet another thirteen employees to their Saint Paul workforce when they change formats on the station in January.
Minnesota Public Radio currently has 320 employees working in downtown Saint Paul. 166 of these employees live, own or rent homes, and pay property taxes here in Saint Paul.
MPR is in the process of building a 73,000 square foot expansion to their network production facility in Saint Paul, so that they will have a total of 125,000 square feet of production studios and offices in downtown. The studios and offices of WCAL will be located in this new production space. Long range, MPR projects that their workforce will grow to at least 350 employees, and at the current rate of growth, it will exceed that.
THIS IS THE WRONG FORUM FOR THE OPPONENTS OF WCAL SALE
There are folks who are disappointed that St. Olaf College decided to sell WCAL, and their disappointment is understandable. But the HRA is the wrong forum to express that disappointment.
This group made their feelings known to the Board of Regents of Saint Olaf College, but the College indicated that it was determined to go forward with the sale of their radio station.
They made their feelings known to the Federal Communications Commission, who had to consent to the assignment of the broadcast licenses, but the FCC said it would not stand between a willing seller and a qualified willing buyer and granted FCC consent.
They appeared before the Minnesota Public Radio Board, but the MPR Board determined that the acquisition of this station was consistent with their desire to serve the public interest in Minnesota.
MPR intends to be true to the tradition of public service exemplified by St. Olaf College's operation of this radio station.
THE USE OF TAX-EXEMPT FINANCING IS APPROPRIATE
The only argument that these opponents can make before the HRA is that the purchase of a radio station by a nonprofit public broadcasting organization is not an appropriate use of tax exempt financing. But such financing fits squarely within the purposes outlined by the authorizing statutes.
Not only is this financing appropriate from a legal standpoint, but also from a public policy standpoint. The sale of WCAL provides St. Olaf College with $10.5 million that they can add to their endowment and use to focus on their principal mission of providing excellent undergraduate education to young adults. St. Olaf is a large and respected employer in Northfield. These funds will enable St. Olaf to add additional professors and support staff. At the same time, the sale enables Minnesota Public Radio to focus on its mission of providing the best regional public radio service in the nation - part of a project bringing new construction and new employment to Saint Paul.
THE RESULTS OF A NEGATIVE DECISION
The result of a negative decision would not be to derail this acquisition, as its opponents would like. MPR has already closed on the purchase of the station and begun to operate it. Instead, it would merely be to punish Minnesota Public Radio by making its debt service more expensive, making it more difficult to support its public radio services and fulfill its public service mission.
CONCLUSION
We hope that the HRA will see their way once again, as they did already once on October 27, to approve this financing.
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