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SARASOTA — The Herald-Tribune Media Group has signed a letter of intent to move its headquarters from 1741 Main St. in Sarasota to the 10-story SunTrust Bank building next door, at 1777 Main St.
If lease negotiations reach fruition, according to people familiar with the matter, the newspaper publisher would relocate sometime early next year to three floors in the SunTrust building, which was completed in 1975.
The move would save the Herald-Tribune, which is owned by New York-based Gatehouse Media, roughly $900,000 annually in operating costs, based on rental rates quoted for the SunTrust building versus the cost to remain in 1741 Main St.
With the letter of intent, the media company has preliminarily committed to floors four, five and nine in the building, which is primarily occupied by SunTrust and engineering firm Kimley Horn.
SunTrust, which owns the roughly 100,000-square-foot building, has been upgrading elevators and making other improvements to fill the more than 25,000 available square feet in 1777 Main St.
At least two of the three available floors in the SunTrust building have been vacant for more than a year. The bank has had difficulty leasing the space because of a pair of former bank vaults that occupy two of the available floors, industry sources say.
SunTrust applied for a building permit on Wednesday valued at about $50,000 to demolish space and provide for tenant improvements to walls, ceilings, floors and plumbing in the Class B building, according to documents. The fate of the vaults could not be determined.
At least one other tenant, however, also is considering the space the Herald-Tribune is working to move into, industry sources say.
The Herald-Tribune has operated from 1741 Main St. since former parent The New York Times Co. invested roughly $28 million to develop a three-story building on the site.
In recent years, the newspaper company's space requirement has been steadily shrinking amid decreasing requirements and downsizing. The media company technically occupies about 52,000 square feet in the building, but some of that space is subleased and some is considered common area.
If the Herald-Tribune executes a lease, it would be the largest new office deal in downtown Sarasota in several years. The next-largest transaction, by comparison, was for 15,200 square feet, which real estate brokerage firm Michael Saunders & Co. committed to last year in the 13-story Ellis Building, at 1605 Main St.
The move also would cap more than a year of activity at the 1741 Main St. property. Owner Stephens Capital retained commercial brokerage firm JLL to lease and sell the building, and nearly has a deal to consolidate the Herald-Tribune to the building's second floor.
Talks between the newspaper and the Little Rock, Ark.-based investment firm — formerly a co-owner of the media company — broke down, however, after Gatehouse brought in a Syracuse, N.Y., firm to scout out potential sites for development.
Gatehouse acquired the newspaper company in early 2015, as part of a $280 million purchase that involved several mostly Florida newspapers.
Herald-Tribune publisher Pat Dorsey did not immediately return a telephone call for comment on the potential move.
The possible shift in locations also comes as the media company's editorial staff and photojournalists have petitioned to form a union with the National Labor Relations Board. A formal election to decide whether to unionize under the Newspaper Guild/Communications Workers of America is likely to take place by the end of September.
Dorsey, in a statement in response to the NLRB petition, says he is “very disappointed” in the union effort.
He also noted that the media landscape has been shrinking on a local and national level, a phenomenon that would prompt the company to look to shrink both its space footprint and rental costs.
“The local newspaper industry continues to face difficult headwinds nationwide,” Dorsey's statement says. “As an industry, and as a local media organization, we are in a turbulent transformation.”
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