...could have some interesting ramifications. Would Paul Allen allow Jerry Kent to purchase the St. Louis properties and make it the Cequel flagship?
Charter hires real estate expert amid move speculation
Margaret Jackson
Charter Communications has hired a vice president of real estate and is evaluating its real estate portfolio amid speculation that the company is moving its headquarters to Denver.
A Denver resident, John Coons was principal of Real Estate and Construction Resources Inc. before joining Charter last month. He also held real estate positions at Inflow Inc., Jones Innercable and United Banks of Colorado, now Wells Fargo.
"We've got lots of buildings and lots of land, and we're in the throes of streamlining and reorganizing the company," Charter spokesman Dave Anderson said. "It's not a good use of our field managers' time to be in the real estate business."
Coons likely will hire real estate firms in various markets to help him evaluate and manage Charter's portfolio, Anderson said.
In addition to the 145,000-square-foot headquarters building near Manchester Road and Interstate 270, Charter controls nearly 200,000 square feet of office and warehouse space in St. Louis County, where it paid more than $1 million in real estate taxes in 2002, according to county real estate records.
Charter paid now-defunct Unity Health $43.5 million for the headquarters building and 19 acres of land in 2001. The company spent an additional $10 million on renovations and infrastructure for the building, constructed in 1998.
Anderson said hiring Coons and the real estate review is not an indication that the headquarters could move.
If Charter were to put its headquarters building up for sale, Duke Realty may be interested in purchasing it, said Mike Donovan, Duke's vice president of office leasing.
"If they said they were selling, we would be a logical buyer to look at it, but we haven't talked to these guys about buying their facility or buying the extra ground," Donovan said.
Charter has a small operation of fewer than 50 people in Denver. As part of its streamlining, the company has eliminated 10 regional operations and gone to five divisions, Anderson said.
"We did that to eliminate a layer of management to move the decision-making process as close to the customer as possible to improve the customer experience. That's where we're going to end up with buildings and land that we didn't need."
Still, industry insiders and people in the real estate community believe the action is indicative of Charter Chief Executive Carl Vogel's intentions to move the headquarters to Denver.
"Eventually, Carl Vogel is going to bring it here," said Paul Maxwell, columnist with Golden, Colo.-based CableFAX and a cable commentator who has started several cable and satellite publications since 1975. "It has more to do with Paul Allen's problems and the financial structure of the company than anything else."
Charter, built by Microsoft co-founder Allen through an acquisition spree in the 1990s that propelled it to its status as the third-largest cable television operator in the United States, has been suffering from servicing nearly $20 billion in debt and a shrinking subscriber base, as well as an ongoing federal grand jury investigation of its accounting practices. In recent weeks, a handful of top managers have been fired as Allen, chairman and majority owner, tries to restructure the operation.
The slumping Denver office market would give Charter an opportunity to cut its costs, while the high unemployment rate would ensure the company's ability to hire quality employees, said people familiar with the company's plans. Maxwell said there might be other motivating factors in the company's decision to move.
"Lifestyle is the main motivator," Maxwell said. "Carl has a place in Breckenridge."
Maxwell said that hiring quality people would be relatively easy in Denver.
"This used to be the cable capital of the world," he said. "It's changed because too many people moved their headquarters other places. There are tons of people who are qualified and employable. It's more of a cable management center than St. Louis — we've got beer here, too."
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© 2003 American City Business Journals Inc.
Charter moving corporate to Denver...
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