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Buffett sells World-Herald, other newspapers to Lee Enterprises

For the first time in its 135-year history, the Omaha World-Herald will soon no longer be under local ownership, one of the results of Warren Buffett’s decision to get out of the newspaper business.

Berkshire Hathaway and Lee Enterprises announced Wednesday that Lee was buying The World-Herald and 30 other Berkshire daily newspaper holdings nationwide for $140 million.

Berkshire’s chairman indicated in a statement that he thought he was leaving his hometown newspaper and the other publications in good hands with Davenport, Iowa-based Lee. For the past 18 months, Lee has managed The World-Herald and other Berkshire newspapers under a 2018 operating agreement Buffett signed with Lee.

“We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges,” Buffett said in a statement.

Lee officials said the deal leaves the combined newspaper chain in a better position to navigate the industry’s future. They touted the scale of the acquisition, which nearly doubles the size of Lee’s nationwide audience and increases its daily newspaper holdings nationally from 50 to 81.

Perhaps even more critically, Buffett under the deal will be refinancing all of Lee’s long-term debt under favorable terms. Mary Junck, Lee’s chairwoman, called Buffett a “valuable partner that shares our commitment to local news.”

“BH Media properties are ones we know inside and out,” Junck said in a conference call.

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The World-Herald in recent months has printed the Lincoln Journal Star and other newspapers Lee owns in eastern Nebraska. Lee noted that among its bedrock values is that “news and editorial policies and decisions are made locally without exception.”

Under the deal announced before markets opened on Wednesday, Lee is purchasing BH Media’s 30 daily papers, 49 weeklies and 32 other print products. The deal also includes the Buffalo News, a longtime Buffett holding that he had maintained as a separate entity when he bought The World-Herald in 2011.

BH Media’s holdings include the Richmond Times-Dispatch in Virginia and the Tulsa World in Oklahoma, along with dailies in Council Bluffs, North Platte, Kearney and Grand Island. In addition to the Journal Star, Lee’s current portfolio includes properties in St. Louis; Madison, Wisconsin; Davenport; Billings, Montana; Bloomington, Illinois; and Tucson, Arizona.

Buffett said Wednesday that he and investment partner Charlie Munger have admired the Lee organization for more than four decades. He had provided previous financing for Lee. He also lauded Lee for helping the BH Media newspapers outpace industry averages in digital revenue and market share under the current management agreement.

Berkshire will be providing the financing for Lee’s $140 million purchase of the newspapers plus refinancing all of Lee’s $400 million in other long-term debt at a 9% rate. After the deal closes, expected in March, Berkshire Hathaway will be Lee’s sole lender.

The deal specifically excludes the real estate associated with all the acquired papers. Lee will lease those properties back from Berkshire under a 10-year agreement.

Lee officials said the deal will increase its revenues by 87% and its earnings by 40%. Junck called the deal “a compelling and transformative transaction for Lee.”

“We know firsthand the power this acquisition brings for further accelerating our industry-leading digital revenue growth while maintaining our focus on delivering high-quality local news,” she said.

“BH Media Group’s publications and the Buffalo News play a vital role in the communities they serve and are a perfect fit for our portfolio,” she added in the conference call. “That’s why we are very excited about the opportunities ahead for Lee in capturing the value for readers, advertisers and shareholders created by this transaction.”

Lee stock was up 67% for the day, closing at $2.10 per share.

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Grace: Improve early childhood ed, improve Nebraska's future, report says

LINCOLN — Inside the infant room at Kelly’s Kids, Danielle Thompson rocked a fussy 6-month-old with one arm and guided a busy, big-eyed toddler with the other as she considered the question about wages.

“I made $9.80,” Thompson said of the hourly rate she’d earned for 10 years at her prior employer, which offered no sick pay, holiday pay or vacation pay.

Miss a day’s work and miss a day’s income — which was something that happened to Thompson, a single mother of two with an associate degree in early childhood education.

Though her situation has improved since coming to Kelly’s Kids in northeast Lincoln, Thompson’s wages — she declined to say what they are now — remain low enough that she qualifies for state assistance.

On her own, this child care worker could not afford the standard $206 weekly rate for toddlers at Kelly’s Kids. But she gets an employee discount on child care, and the state helps pay the cost.

Owner Kelly Kiihne would like to pay Thompson more, but the reality of running a child care business, where tapped-out working parents are already paying the most they can afford, means she’s in a bind.

Most of the 55 children at this center are from working-class families who, like Thompson, depend on state help. Then there’s the cost of doing business.

“Electricity, garbage, your mortgage or rent, toys and materials,” Kiihne said, rattling off expenses.

KAYLA WOLF/THE WORLD-HERALD 

From left, Kaziah Guerra, Braydon Kiihne and Brielle Bottorff play with toys before naptime on Tuesday at Kelly’s Kids in Lincoln.

This is the underlying call to action in a new report being released Thursday called “Elevating Nebraska’s Early Childhood Workforce.” The 112-page document was authored by the Omaha-based Buffett Early Childhood Institute, a think tank with the University of Nebraska. It took three years to prepare and involved input from some 40 people across the state in what was called the Nebraska Early Childhood Workforce Commission. That commission included policymakers, scholars and Kiihne and other providers and workers.

Together, they have studied a problem confronting Nebraska: Quality, affordable early childhood education is in short supply. A solution is shoring up the field’s workforce, child care workers and teachers who often earn poverty-level wages. The low pay and lack of benefits mean higher turnover in a profession where kids need stability.

But paying workers more and creating more high-quality child care options requires more money. The report identifies a $452 million gap between what parents, primarily, and state and federal government spend already and what is needed to bring up worker pay and fully fund that and other needs for early childhood education in Nebraska.

The report recommends the state up its contribution by $109 million a year, which could be a tough sell at a time when Nebraska’s elected officials are pushing to reduce property taxes. Author Cathey Huddleston-Casas, associate director of workforce planning and development at the Buffett Institute, said that investing in early childhood education up front can provide a savings on the back end with “money coming in at birth, not in welfare checks or prison later.” She said public and private sector funding increases could happen incrementally, not all at once.

“We’re already paying for it one way or another,” she said.

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The report aims to raise the profile of an issue that has ramifications for kindergarten readiness, K-12 success, workforce preparation and social safety net programs.

Make quality affordable child care available and help companies and communities thrive. Prioritize the youngest among us, whose brains are in critical formation and who most need constructive, nurturing environments, and society is better off.

Commission members will be saying this Thursday in Lincoln at a public report unveiling being live-streamed online from 9 a.m. to 11 a.m. About 200 people are participating in watch parties across the state.

Leaders hope the report spurs conversation about how to close the funding gap in 10 years.

The need is now, they say. Three out of every four Nebraska children under 6 have parents working outside the home. Most parents lack choices in affordable, quality child care, especially in rural areas. Eleven Nebraska counties have zero licensed child care facilities.

This impacts workers who must scale back their hours, choose other jobs or not work at all in a state already pinched with a labor shortage.

The issue is not new. The field of early childhood education is half a century old. Various local efforts over the years have been aimed at looking at how society cares for this vulnerable population as more and more mothers work.

Quality child care is a fairly universal need across Nebraska. Shoring up early childhood education is a no-brainer, said State Sen. John Stinner of Gering, who is on the commission.

“They need help,” he said of stressed families.

The 68-year-old retired banker, a Republican in charge of the Appropriations Committee, said his experience as a legislator studying Nebraska’s prison overcrowding problem and his past on the Gering school board showed him it makes sense to focus on small problems before they become bigger ones. Tweaking a reading program in Gering, he said, resulted in a big increase in reading test scores.

“You can kind of connect the dots all the way through,” he said. “I truly believe the zero-through-8 years are formative.”

The better you launch children, he said, the better off they are in life. Better prepared for kindergarten. Better records in school. Better prepared for careers. Less likely to get involved with crime.

The Buffett Institute report lays out complications. One is the labyrinth of federal and state aid that proves cumbersome for providers like Kiihne. Thirteen different federal and state agencies offer funding help through 15 different finance mechanisms.

This makes for a lot of paperwork for Kiihne, who estimates she spends about eight hours a month (usually nights or weekends) sorting through just one of these streams, the state aid called Title XX that subsidizes child care for most of her clientele at her northeast Lincoln center. (She has another center across town.)

The state aid helps, but there are conditions. If a child receiving Title XX is home sick, she doesn’t get paid.

Tidy solutions aren’t offered in this plan. Instead, the Nebraska Early Childhood Workforce Commission is calling on Nebraskans who care about this issue to form a coalition and work together. Each community, however, might have a different approach.

One example could be found in Red Cloud, a town of about 1,000 in south-central Nebraska near the Kansas border.

Red Cloud had one licensed in-home child care business until 2017, when the town came together to raise $2.2 million to build the nonprofit Valley Child Development Center. Its operating revenue comes from donors, grants and fees.

It can take up to 80 children, infants through age 12, including those with special needs. So far, 65 children are enrolled and parents come from a 40-mile radius, including some from Kansas.

Certified teachers at the center are paid what Red Cloud K-12 public school teachers make. Staffers trying to get certification are offered scholarships. All staff are offered full benefits, and the center boasts a lower child-teacher ratio than the state’s requirement. There’s a garden on site.

The child care facility is so good it lured one millennial-aged couple to move to Red Cloud. They bought the town’s single grocery store that was for sale and likely to be closed.

SARA CLINE 

Danny and Val Benge and their three daughters.

Danny Benge said he and his wife, Val, were used to a high-quality child care center in Seward, Nebraska, and weren’t going to trade down. The couple got the hard sell from family and friends to move. (Val is from Red Cloud.)

They saw a vibrant small town, family ties and opportunity in the grocery store purchase, to be sure. But what clinched it was the child care center.

“We needed somewhere to take our kids,” Danny Benge said. “None of this would have happened without that.”

And since? He’s tripled the store’s inventory; Red Cloud’s almost-shuttered grocery store is thriving. His wife is settled in her commercial insurance job. And their daughters, ages 7, 5 and 4, are happy.

The children at Kelly’s Kids in northeast Lincoln appeared happy, too. The infants were getting cuddled in one room. The toddlers, who had just polished off a burrito lunch, were washing their hands at a tiny sink as workers cleaned up. The preschoolers were settling onto cots, snuggling under blankies as soft music played in the lofted room of what had been a church sanctuary.

Colorful posters on the wall were reminders to staff and children, but they could also be shorthand for what’s in the new report.

“Clean up,” one said. “Listen.”


Valentine’s Day crafts, Elmo’s birthday party and 15+ other fun things to do this weekend

Valentine's Day crafts, Elmo's birthday party and 15+ other fun things to do this weekend

Local
Judge dismisses lawsuit that stalled plans for juvenile justice center in downtown Omaha

A new court ruling means that plans for a new courthouse annex and juvenile detention center in downtown Omaha could move ahead quickly, barring an appeal.

In a ruling made public Wednesday, a judge dismissed a taxpayer’s lawsuit against Douglas County, the City of Omaha and the Omaha Douglas Public Building Commission. Douglas County District Judge Michael Coffey found that the proposed $120 million complex is a joint use of the city and county, thus rejecting the main argument of the plaintiff, David Lanphier.

Coffey also ruled that it was lawful for the building commission to issue bonds for the project.

In the ruling, he dismissed Lanphier’s complaint for declaratory judgment with prejudice, meaning it can’t be refiled.

Clare Duda, Douglas County Board chairman and member of the public building commission, said he was “not surprised but certainly pleased” by Coffey’s decision.

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The ruling could put the project almost right back to where it was before Lanphier filed the lawsuit in July. The building commission had put bonds up for sale, had buyers and was about to execute the deal. But the commission couldn’t go through with the sale because of the legal cloud hanging over the bonds.

That deal expired. But the building commission, which already voted to issue the bonds, could market them again without having to take any more votes, Duda said.

“Now we have to hurry up and wait to find out if they’re going to appeal,” Duda said. “We’re not going to issue bonds again and have them pull the rug out from under us again. We’ll wait out the 30-day appeal period.”

Lanphier and his attorney, retired Judge Patrick McDermott, have 30 days to file an appeal. They had not decided Wednesday whether they would do so or not.

Lanphier referred questions to his attorney. McDermott said he had not talked with Lanphier and so declined to comment at length.

“We will have to discuss what we our next steps will be, if any,” he said.

An appeal bond could be a factor in that decision.

HDR ARCHITECTURE 

A rendering of the proposed juvenile justice center at 18th and Howard Streets. A judge ruled Wednesday that the complex would be for the “joint use” of the city and county, a requirement for building commission projects.

Attorneys for the building commission and county would ask that Lanphier be required to post such a bond, Douglas County Attorney Don Kleine said. If Lanphier appealed and lost, the bond would guarantee that he would cover the extra costs that a judge found the project incurred because of the lawsuit.

Attorneys for the commission have said those costs could run into the millions of dollars because of rising construction costs.

“That (an appeal bond requirement) may be an issue which might block an appeal, because we wouldn’t be able to do that,” McDermott said.

Last year, the Douglas County Board and Omaha City Council signed off on agreements allowing the project to go ahead, and the building commission was poised to issue bonds to pay for it when Lanphier filed the lawsuit in July 2019.

Officials were hoping to begin construction, or at least preparations for it, last year. But the lawsuit halted the project because the bonds could not be sold with a lawsuit pending.

Lanphier, an Omahan who briefly served as a justice on the Nebraska Supreme Court, argued that the building commission couldn’t issue bonds for the project because it doesn’t meet state statutory requirements that building commission projects be for the joint use of the county and city. Lanphier argued that the project would be only for the county’s use.

Attorneys for the county, city and building commission contended that it’s a joint-use project in part because the vast majority of juveniles who end up in Douglas County Juvenile Court — and those who would be housed in the new detention center — are arrested by Omaha police. Most youths prosecuted in juvenile court are accused of violating Omaha city ordinances. And the city has no youth detention center of its own.

Coffey agreed with the defendants. He cited those arguments in his ruling, emphasizing them over the importance of a small police assembly area in the complex.

“Based on the Court’s findings both the City and the County play an essential role in juvenile justice and the evidence demonstrates the two entities have united to accomplish the purpose of addressing juvenile justice,” Coffey wrote. “Therefore, the juvenile justice project is a ‘joint use.’ ”

Kleine said the ruling “pretty much validated our arguments.”

“It’s clear if you look at it that juvenile justice is a joint issue, Omaha police, Douglas County sheriff, public defender,” he said.

Douglas County Board Member Chris Rodgers, one of the main proponents of the project, said he was relieved and happy.

“I was glad he came to that conclusion, the conclusion we thought was the right one, because we did our due diligence,” Rodgers said. “It’s a positive for the kids and families of Douglas County.”

Douglas County Board Member Jim Cavanaugh, a leading opponent of the project, said the decision on the bonds should be left to voters, not the building commission.

“It’s unfortunate that something this big and wasteful and wrong is still being discussed without a vote of the people,” Cavanaugh said.

Coffey’s decision made clear in his ruling that the building commission was within its statutory authority to issue the bonds without going to a public vote.

“The Court further finds that the issuance of revenue bonds by the Commission for the construction of the Juvenile Justice Center was lawful,” the judge wrote.


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Articles
Trump defense: Ukraine quid pro quo wouldn't be impeachable

WASHINGTON (AP) — In a striking shift from President Donald Trump's claims of "perfect" dealings with Ukraine, his defense asserted Wednesday at his Senate trial that a trade of U.S. military aid for political favors — even if proven — could not be grounds for his impeachment.

Trump's defenders relied on retired professor Alan Dershowitz, a member of their team, who told senators that every politician conflates his own interest with the public interest. "It cannot be impeachable," he declared.

Democrats are pressing hard to force the Senate to call more witnesses to testify, but Republicans appear intently focused on bringing the impeachment trial to a vote of acquittal, possibly in a matter of days. Even new revelations from former national security adviser John Bolton are being countered by the president's lawyers, who used Wednesday's unusual question-and-answer session to warn off prolonging the proceeding, insisting senators have heard enough.

Democrats argued Bolton's forthcoming book cannot be ignored. It contends he personally heard Trump say he wanted military aid withheld from Ukraine until it agreed to investigate Joe Biden and his son, Hunter Biden — the abuse of power charge that is the first article of impeachment.

The vote on calling witnesses is expected by Friday.

As Chief Justice John Roberts fielded queries, Texas Republican Ted Cruz asked if it mattered whether there was a quid pro quo.

Simply, no, declared Dershowitz, who said many politicians equate their reelection with the public good. "That's why it's so dangerous to try to psychoanalyze a president," he said.

Rep. Adam Schiff, the Democrat leading the House prosecutors, appeared stunned.

"All quid pro quos are not the same," he retorted. Some might be acceptable, some not. "And you don't need to be a mind reader to figure out which is which. For one thing, you can ask John Bolton."

With voting on witnesses later this week, Democrats, amid the backdrop of protesters swarming the Capitol, are making a last-ditch push to sway Republicans to call Bolton and others to appear for testimony and ensure a "fair trial."

Trump faces charges from the House that he abused his power like no other president, jeopardizing Ukraine and U.S.-Ukraine relations by using the military aid as leverage while the vulnerable ally battled Russia. The second article of impeachment says Trump then obstructed the House probe in a way that threatened the nation's three-branch system of checks and balances.

Over two days, senators are grilling the House Democrats prosecuting the case and the Republican president's defense team. Ninety-three questions were asked and answered Wednesday in rapid-fire fashion, with senators under orders to sit silently without comment, submitting their questions in writing. They expect to keep going Thursday.

Democratic Leader Chuck Schumer asked whether the Senate could really render a fair verdict without hearing from Bolton or acting White House Chief of Staff Mick Mulvaney, both potential eyewitnesses to Trump's actions.

"Don't wait for the book ... when it is in black and white to find out the answer to your question," Schiff told the Senate.

WHAT'S NEXT

Senators will wrap up their questioning of both sides Thursday and probably vote Friday on whether to allow witnesses.