SAN JOSE — In an announcement that cheered city leaders, the Mercury News said Thursday it is returning to downtown San Jose, bringing a signature business and another burst of economic activity to the city’s revitalized core.
The Mercury News’ offices will be at 4 N. Second St. — a few blocks from the West Santa Clara Street building it left in 1967 when it moved to its current home several miles away.
“It’s going to be great to have the Mercury News back downtown where it started,” said Mayor Chuck Reed. “It was an anchor presence for a very long time, and it was a blow to downtown when they picked up and moved off Santa Clara Street to Brokaw Road. It’s important to have one of the nation’s best newspapers downtown.”
Publisher Sharon Ryan said she and the staff are delighted that “we were able to figure out a way to move the company back downtown. I want to thank all of those who helped us make this possible. Everyone benefits.”
The company will occupy 33,186 square feet on the seventh and eighth floors of the building, with news and executives on the eighth floor and advertising and all business functions on the seventh.
The company expects to move in September, Ryan said.
The newspaper’s return comes as the city center enjoys a rebirth after decades of decline caused by the growth of the suburbs and malls that hollowed out the downtown’s core of customers and businesses.
The recovery has brought 90 tech businesses downtown with more considering it, according to city economic development officials, and spurred construction of two high-rise apartment buildings, with two more in planning stages. The revival includes an architecturally significant new City Hall on West Santa Clara Street and a U.S. Patent Office soon to come.
“Fortunately, we have been able to come back from the dead,” Reed said.
The newspaper’s move is part of a trend in which papers are selling their buildings and moving to office parks or other less costly quarters. The Mercury News is moving downtown after selling its 36-acre campus at 750 Ridder Park Drive, near Brokaw and I-880, to Supermicro Computer.
Supermicro plans a complex of 1.6 million square feet with about 2,800 parking places, including a manufacturing facility on the campus it purchased for $30.5 million last fall.
For the Mercury News, the downtown location makes sense journalistically and economically, said Ken Doctor, a media analyst with Outsell.
“You want to be as physically accessible to your readers and sources in the community as you can be,” Doctor said. “San Jose is a big city and has significant downtown population in government and business. You want reporters to be able to walk over and talk to somebody or for people to come into the building to talk to the editorial staff or just observe a story conference. The Merc had a big, iconic building on Brokaw but it wasn’t accessible that way.”
Economically, Doctor said, “half the value of newspapers these days is real estate. At a time of meager, tumbling profits, it’s very common for newspapers to move out of their residences into cheaper space, sometimes urban, sometimes suburban, but always cheaper.”
Matthew Mahood, president and chief executive officer of the San Jose Silicon Valley Chamber of Commerce, called the move “one more building block” for a revitalized downtown. “More and more employers across the region are starting to look at downtown as a viable place to put their business,” he said. “It’s fantastic that the Mercury News is one of those businesses.”
The deal-closer for the move was a downtown parking incentive for businesses that was spearheaded 31/2 years ago by Councilman Sam Liccardo, whose district includes the city center. Under the deal, the Mercury News will get 200 parking places in a city garage, 160 of them free of charge for four years and half price in the fifth year. Typically, a business would get fewer parking places, so the deal with the Mercury News required council approval.
“We’ve seen 159 businesses take advantage of this incentive, filling over half a million square feet of space with over 1,300 employees,” Liccardo said. The City Council unanimously approved the arrangement on March 18. “We have a lot to celebrate,” Liccardo said.
Praxis Commercial acted as national broker on the deal for the Mercury News, in conjunction with Rob Shannon of CBRE, the local broker.
Kim Walesh, San Jose’s economic development director, said the return of the newspaper “is really a very important symbol for downtown” and is “a big fish for us. More and more companies want urban settings where people are able to walk to restaurants, where there’s a more stimulating environment with cars and public transit, bikes and lots of options for getting around.”
Ron James was mayor in 1967 when the Mercury News was last headquartered downtown.
“The nice thing about having the Mercury News downtown was if you had something you wanted to talk about with (publisher) Joe Ridder or the editorial staff, you could walk in and sit down, shoot the breeze, talk about annexation, talk about BART coming to town,” he said. “You ran into them all over the place, at Rotary meetings, wherever.”
But the valley was growing rapidly, and Mercury News circulation grew with it. The company had outgrown its 25-year-old headquarters at 211 W. Santa Clara St. and needed more room to expand its printing operation. Ten new press units were added to the 14 existing ones after the move, and ultimately the printing plant had around 40 units in 4 Goss presses. More than 1,000 employees moved into the new plant. The Mercury News, now part of the Bay Area News Group, has been printed in Concord and Hayward since June, easing the way for the move downtown.
As far as former Mercury News publisher Tony Ridder is concerned, moving the newsroom, advertising and administrative offices out of downtown was not necessary.
“Quite frankly, I think it was a mistake,” Ridder said. “I don’t see any reason why we couldn’t have built the production facility out where you are now and had the newsroom and front office, advertising department and accounting department downtown.”
The return 47 years later is good news, said Tom McEnery, a former San Jose mayor. “You can’t change those kinds of significant mistakes, but it’s something that warms your heart a little bit that you’re getting a redress of an old mistake,” he said.
Contact Pete Carey at 408-920-5419 Follow him on Twitter.com/petecarey.
