The National Press Club has reached an agreement to buy out the minority stockholders in its 55-year-old building, allowing it to complete financing of the structure's multimillion-dollar renovation.
The agreement was filed recently in a Delaware court, which approved the arrangement.
The minority shareholders, who own about 20 percent of the stock in the National Press Club Building Corp., sued in May over the planned refinancing of the renovation project. They charged the deal favored the National Press Club, which owns 78.4 percent of the building corporation stock, over the minority shareholders.
Under the agreement filed with the Delaware court, the minority stockholders will receive $750 a share--$400 in cash now and the rest in notes payable over the next seven years. Originally, the minority stockholders demanded $3,000 a share, but building corporation President William D. Hickman said they now have agreed to the lesser figure. The cost of the settlement is estimated at more than $4 million.
"This is particularly good news because it means we can finally complete the financing for our renovation and can soon start moving tenants into the first section of our new building," said Press Club President Don Byrne.
In order to finance the renovation, which ran into cost overruns that drove the construction price up from $57 million to about $132 million, the building corporation decided to sell the structure to an investment syndicate. Under the plan, the corporation would be able to buy the building back in 45 years.
"We were in big bad trouble a year ago, but this is the last of the hurdles. We've got clear sailing from now on," said Hickman.
The press club section of the building will be far more luxurious and occupy twice as much space as it did before the renovation started. It will include a two-story cocktail lounge with private elevator and entrance.
According to Hickman, one-quarter of the renovated building will be finished and ready by September. That section is fully leased, he said. Another section will be ready in late spring and the final section is scheduled to be completed in early 1985.