Update, Jan. 6, 2 p.m.: The Pacifica National Board voted Thursday in a closed session to pursue a loan to pay off the network’s debt to Empire State Realty Trust (ESRT), according to members who reported back to KPFA’s local board at its Saturday meeting. The vast majority of KPFA’s local board members would rather the network file for Chapter 11 bankruptcy, which they say could buy Pacifica time to pay what it owes.
ESRT can begin putting liens on Pacifica’s properties, including the KPFA and national buildings in Berkeley, and seizing other assets, as soon as Monday. Sabrina Jacobs, KPFA host and national board member, said the real estate company Friday said it would not enter into a forbearance agreement with Pacifica. In a forbearance agreement, ESRT would have agreed to hold off on seizing Pacifica’s assets for a designated period of time while a loan was obtained and a payment plan hashed out.
Jacobs said KPFA is not at risk of being shut down immediately, but called the state of the negotiations “beyond depressing.”
Original story, Wednesday, Jan. 3: The future of KPFA, Berkeley’s longstanding non-commercial, progressive radio station, is in question as the leaders of parent company Pacifica Foundation struggle to agree on a response to a potentially devastating lawsuit. If the network does not figure out how to pay close to $2 million owed to a real estate company by early next week, KPFA’s operations will be threatened.
In November 2016, Empire State Realty Trust (ESRT) sued Pacifica in each state where the network operates, alleging that New York City station WBAI owed the company more than $1.3 million in back rent and fees. WBAI and KPFA are two of five stations and dozens of affiliates under the Pacifica umbrella.
ESRT owns many office and retail buildings in the New York area, including the Empire State Building, the location of WBAI’s transmitter since the 1960s. The station’s current 2005-2020 lease includes an unusual annual 9% increase, and WBAI has long been unable to pay its now about $60,000 monthly rent. In New York, transmitters have become coveted following the collapse of the World Trade Center.
In October 2017, a New York Supreme Court judge ruled in favor of ESRT, awarding a judgement of more than $1.8 million. When a waiting period ends on Jan. 8, ESRT can begin scooping up Pacifica’s assets. The real estate company could put liens on Pacifica’s buildings, including the national headquarters and KPFA’s adjacent property on Martin Luther King Jr. Way, between University Avenue and Berkeley Way. It could also clear out station bank accounts if it so chooses.
As for the immediate future of KPFA, “we are just as much in the dark as the public,” wrote Maria Negret, the station’s manager, in an email to Berkeleyside on Tuesday. “HONESTLY, we at KPFA don’t know what will happen.”
On Dec. 27, KPFA General Manager Quincy McCoy wrote a mournful email to the station’s entire staff, telling them he has been working with the station’s local board “trying to protect KPFA’s interests in this grim situation we find ourselves in.” McCoy did not respond to Berkeleyside’s requests for an interview.
If it reaches the point where ESRT is able to seize Pacifica’s assets, McCoy wrote, KPFA “will cease broadcasting because we will be unable to operate the station. At that point, our building and our bank account will no longer be under our control. Needless to say, this is a terrible position to be in, especially for management when there is *still* no plan of action to articulate from the national leadership to the staff.”
Pacifica’s interim executive director, Bill Crosier, is pushing for the Pacifica National Board to file for Chapter 11 bankruptcy, to buy the network some more time.
“Bankruptcy would stop collection efforts immediately. It would give us time to repay our debt,” Crosier said in an interview on the KPFA program A Rude Awakening on Jan. 1. Pacifica would have a few months to come up with a payment plan, which could be implemented over the next several years, he said.
Negret said she would support such a move too, as “it would give us a chance breathe and re-organize our network.”
However, a majority of Pacifica board members disagree with Crosier, due to the price of filing for bankruptcy, which could cost up to $1 million — half of what Pacific owes ESRT — and the stigma around it, he said. Most would prefer to get a loan, and to encourage ESRT to enter into a forbearance agreement, delaying the seizure of Pacifica’s assets.
“I think it’s dangerous — and our attorneys have said it’s dangerous — to assume they’ll just continue to be patient while we figure out how to pay them, with a loan or whatever,” Crosier said on the radio program.
Regardless of whether Pacifica ends up filing for bankruptcy, it is likely the network will have to engage in a “signal swap.” At least one of its stations would sell its signal to another radio station, in exchange for one with a smaller coverage area. KPFA’s signal reaches a third of California, according to the station, which broadcasts on 94.1 and 89.3 FM in Berkeley, as well as in Fresno and Santa Cruz. Additionally, each of Pacifica’s five radio licenses — two in California, and others in Houston, Washington, D.C. and New York — are very valuable, and the network could theoretically sell one to pay off the debt.
Crosier said he is unsure Pacifica could even obtain a loan, due to its poor financial state. The network is somewhere around $8 million in debt and has been running deficits almost yearly for more than a decade, according to the interim director. Pacifica has not paid its pension obligations for three years, according to a letter sent by Crosier to the Pacifica National Board.
The board held a special meeting in late December to address the current crisis, but did not take action. The board is scheduled to meet again Thursday, which will be the last chance to file for bankruptcy.
There is a long history of tension and bitter disagreement between national board members — and between Pacifica and KPFA. Station donors elect local representatives who in turn appoint national board members. On the board, disputes over issues small and large can prevent progress and, according to Crosier, might be a reason why many members are hesitant to file for bankruptcy. If the board could not agree on a payment plan, a receiver would be appointed.
The tension between Pacifica and KPFA reached a peak in 1999, when Pacifica locked station staff out of their Berkeley building amid struggles for control of KPFA and labor disputes. In 2010, Pacifica laid off staff including the hosts of KPFA’s Morning Show, then later rehired host Brian Edwards-Tiekert, who still works for the station. At the time, Pacifica said its actions were necessary because the station had lost a lot of money during the financial crisis.
In 2014, former Pacifica Executive Director Summer Reese staged a months-long sit-in in the network’s Berkeley office to protest her ouster. There have also been struggles between KPFA’s own management and the many unpaid workers who volunteer at the station.
Edwards-Tiekert and host Mitch Jeserich discussed the impending threat on KPFA’s program UpFront on Tuesday morning, saying they wished their parent company would take action.
“Pacifica’s known losing that lawsuit was a possibly if not a strong possibility since the day it was filed,” Edwards-Tiekert said. “It’s kind of disheartening to see those signs of paralysis.”
Jeserich acknowledged it is hardly the first time KPFA’s future has been fuzzy — “It’s been four years since we had our last existential crisis,” he joked, referencing the Reese saga — “but to me this is the best KPFA has been” in years, in terms of finances and staffing, he said.
McCoy told staff KPFA will disburse January paychecks in advance, and cover medical benefits until March. He said he will also pre-pay all bills he is able to, in hopes of continuing operations for a bit longer even if ESRT takes the station’s money.
“I’m sorry to say that is all management can do,” he wrote in the email. “There is still no playbook for a month or two months down the road.”
Pacifica was originally created as a foundation to support KPFA, its first and flagship station, which was launched in 1949 by World War II pacifists hoping their political messages could reach a wider and working-class audience. The state would only grant the broadcasters a piddling FM license at a time when AM dominated, failing to predict how valuable it would soon become. Considered the oldest listener-supported radio station, KPFA has long run radical anti-war and pro-civil rights programs, interviewed revolutionaries and aired beat poetry readings, prompting several unsuccessful censorship and license revocation attempts over the years.
According to a message on the station website, KPFA is currently in a decent financial situation itself.
“KPFA is reaching its goals, paying our bills and expanding our operation,” the message says. “It is your support that has floated this independent media ship and allowed us to continue our 69-year mission of speaking truth to power. Things at KPFA have been going well. The current financial problem at Pacifica is not of our making.”