Who owns Capital Public Radio’s tower? Fight brews after ‘gift’ of tower to KVIE

Two weeks after the Capital Radio Endowment board announced that a transmission tower used by CapRadio had been donated to public television station KVIE, CapRadio and Sacramento State are challenging the move, saying the university broadcaster owns the tower.

“We do not believe it could be gifted because it wasn’t the endowment’s to give,” Sac State spokesman Brian Blomster said Wednesday. “That’s the position of CapRadio, the CapRadio board and the advice of our attorney.”

The declaration comes after the Capital Public Radio Endowment board proposed that KVIE take over CapRadio, then followed up by deciding to donate the Elverta tower and property to Channel 6.

But the university says the tower that is used to broadcast CapRadio news over KXJX-FM is owned by CapRadio, an auxiliary of California State University, Sacramento, and sits on land that is restricted for the use of the tower and “required to be held by the station.”

“We can definitely state that CapRadio owns the KXJZ broadcast tower,” CapRadio interim general manager Frank Maranzino said during a CapRadio board meeting Wednesday night.

Dan Brunner, president of the endowment board that exists to support the broadcaster, said Wednesday that documents show the endowment has owned both the property and the tower since 2013 and has been paying property taxes and audit fees annually.

He also said that as recently as last fall Sac State officials were in discussions with the endowment about buying back the tower and land, talks that led to an appraisal of the tower and property being done that valued it at $2.7 million.

During that appraisal process, he said, the endowment board discovered CapRadio and Sac State had failed to properly maintain the tower, leading to concerns that the public radio station’s signal could be interrupted by a tower failure.

“The bottom line is, how do we best serve the interest of that station,” Brunner said. “We made the decision that the best business judgment was to transfer it to KVIE and make sure it was in the hands of a public broadcasting entity” with experience maintaining a tower.

KVIE General Manager and President David Lowe said in a statement that KVIE is “aware that CapRadio has made a claim that it owns the tower only.”

“We are conducting our own due diligence on the claim,” Lowe added.

He previously said the gift from the endowment would not affect CapRadio’s use of the tower.

“We fully expect to honor all of the lease agreements that exist, and look forward to working with them and other tenants,” Lowe said earlier this month. “We are committed to a strong public media.”

Sac State’s contention that it owns the tower comes even though documents obtained from CapRadio by The Sacramento Bee show the operation gave the tower and land as a gift to the endowment in 2013.

The documents, obtained through a California Public Records Act request, show that a report prepared for an April 2023 endowment board meeting indicated CapRadio originally purchased the Elverta site and began construction of the tower there in the early 1980s.

The CapRadio board formed a nonprofit group called Tower 91 to own the tower and property, the documents say, but dissolved that entity after CSU auditors determined in 2012 that Tower 91 could be viewed as an “unauthorized auxiliary” of the university.

The next year, Tower 91 was dissolved and “its assets (land and tower) are gifted to the Endowment,” according to the documents, which portray the gift as a move that would benefit both CapRadio and the endowment.

“Endowment is able to show economic benefit of owning the property on its financials as well as document the actual fiscal support it provides to CapRadio,” the documents say. “CapRadio is able to recognize grant revenue from Endowment as a non-federal funding source for (Corporation for Public Broadcasting) calculation.

“Endowment receives visibility on-air for this significant contribution to CapRadio’s operations.”

But Sac State says financial statements and a lease agreement show the tower is owned by CapRadio and sits on 36 acres designated as a “permanently restricted piece of property where a transmitting tower owned by the station currently resides.”

The endowment says it has more than $4 million in assets, including the KXJZ transmission tower and 36 acres in Elverta, and allows CapRadio to use the tower without charge — which it values at $65,000 annually.

CapRadio also is allowed to collect rental income of $126,000 each year from other tenants broadcasting from the tower.

The endowment board has been pushing Sac State to sell its broadcasting license to KVIE and allow the PBS affiliate to take over CapRadio and free up the university from the financially troubled radio operation.

CapRadio has been beset with troubles since last year, when it laid off about 12% of its workforce and cut programming.

It also was the subject of a scathing California State University audit that found severe financial mismanagement and lax oversight, much of it stemming from CapRadio’s plans to expand into two leased buildings downtown and increase its staffing.

Another, more detailed “forensic audit” of the CapRadio operation is expected to be released soon, and the radio operation’s troubles have prompted a public fight over control of a major source of news and on-air programming for listeners throughout Northern California.

The endowment board urged Sac State President Luke Wood in a letter last month to hand over control of CapRadio to KVIE, portraying the move as a “win-win-win for the campus, the station and the community.”

That move was followed by another letter to Wood last week signed by community and business leaders reiterating the notion that a “partnership” between KVIE and CapRadio would ensure “long-term stability for public broadcasting in our community.”

“We urge you to explore the options and engage in meaningful conversations with community leaders and investors to see how we can work together to make this happen for our region,” said the letter, which included signatures of endowment board members as well as former members of the CapRadio Board of Directors who were part of a mass resignation last October who quit over what they said was “a failure of Sac State to inform and engage with the board in good faith.”

Sac State officials have said they intend for CapRadio to remain part of the university for years to come, and CapRadio pushed back on the endowment’s efforts in a letter of its own to supporters.

“We want you to know that despite their recent misguided effort to dictate the future of our station, CapRadio will remain an auxiliary of Sacramento State and will continue serving our community as an independent public broadcasting entity,” the letter said. “The endowment is a (nonprofit) organization completely separate from CapRadio and Sac State. It has no authority over CapRadio.

“Over the past few weeks its board has overstepped in concerning ways, from attempting to publicly force an ill-planned merger with PBS KVIE, to announcing a ‘donation’ of assets that directly contradicts the endowment’s stated mission to financially support CapRadio.

“The endowment board’s motivation for these actions is unclear, but it is certainly not in the best interest of CapRadio and the community at large as it claims. It is also shocking and disappointing that KVIE — part of this community’s public media family — has worked with the endowment to the detriment of local public radio.”

That letter was followed by an opinion piece in the Sacramento Business Journal co-written by Elizabeth Shattuck, a founder of the CapRadio endowment, who denounced its notion of merging CapRadio with KVIE as “ill-conceived” and criticized the donation of the tower to KVIE.

“This decision directly contradicts the endowment’s stated mission to financially support CapRadio,” the piece read. “While we can’t presume to understand the endowment’s recent actions, we oppose any notion that our ability to fulfill our public service mission can be dictated by an outside entity...

“We call for the endowment board to stop its harmful actions that are impacting a valued local public media institution and to have good faith conversations about honoring its mission to support the future of CapRadio.”

Brunner said that since he joined the endowment board more than a decade ago its funding has grown from $800,000 to $2 million and that the endowment has given CapRadio $890,000, including more than $400,000 contributed last year to help fund three positions.

“We have done our best to maintain the endowment and grow the endowment in a way I hope she would be proud of and everybody would be proud of,” Brunner said.

He added Sac State’s position that CapRadio owns the tower does not change the fact that the endowment was working to protect its signal.

“If, in fact, there’s nothing there then there’s nothing there,” he said. “If public radio owns it or Sac State owns it, fine.

“My concern and our concern was that there be an uninterrupted transmission of public radio on air.”