Pacifica Radio Faces Financial Crisis

Pacifica, a nonprofit founded in 1946 by conscientious objectors from World War II, is the mother of America’s alternative radio, pioneering decades of left-leaning public affairs programs and community-based music.

But, reports The Mercury News,  it is $8 million in debt — more than double its assets. And now one of its creditors — the New York City-based Empire State Realty Trust, which is owed $1.8 million in back rent on the antenna and transmitter atop the Empire State Building used by New York station WBAI — is demanding to be paid.  It has filed paperwork in California that would allow it to seize Pacifica’s assets, including KPFA.

In an effort to save its flagship station KPFA and four other stations, Pacifica is seeking loans to pay off its debt.

“It is scary, especially because it is difficult to come up with $1.8 million and it is difficult to make the changes needed to be sustainable and pay the bills,” said Pacifica’s interim executive director, Bill Crosier.  “But we will get through it.”

Starting Tuesday, the New York creditor has the legal authority to seize bank accounts and put a lien on Pacifica’s California properties, including the national headquarters. This means KPFA could lose control of its building and finances if its property is seized or subject to a lien.

On the KPFA website, general manager Quincy McCoy warned that this “would take the Bay Area’s only truly progressive radio station off the air.”

The nonprofit foundation’s board hopes to secure two loans to forestall a crisis. One $500,000 to $1 million loan has already been offered by Los Angeles supporters, Crosier said. A larger $3 million loan is also being sought to pay off the New York debt and other financial obligations.

Pacifica’s $8 million in debt approaches the equivalent of its $10.17 million in annual receipts. And its debt is more than double its entire assets of $3.97 million, according to the Guidestar database.

Crosier disagrees with the board’s strategy and is urging the board to file for voluntary bankruptcy, which would protect the foundation’s assets from creditors and give it time to restructure.

After the terrorist attack on the World Trade Center in 2001, rents on the Empire State Building transmission antennas soared because so many of New York City’s antennas were atop the Twin Towers. WBAI pays $60,000 a month — about $700,000 a year — for a signal.  That’s more than half the station’s total annual budget.