Twenty-four years after legally separating itself from Michigan State University by incorporating as a nonprofit, the State News physically separated itself in August of 2005 by purchasing the $4.6 million off-campus building at 435 Grand River Ave.

Anticipating a move for more than 20 years, the State News saved up approximately $4 million collected from advertisers and subscription fees. The nonprofit’s board of directors applied these savings to the 20-year mortgage used to pay for the building, according to Marty Sturgeon, the general manager of the State News for the past 14 years.

The building, which includes the former Gap storefront at the corner of Grand River and Division, affords the newspaper a prime location for covering news on campus and in the East Lansing community while providing the staff with the amenities of a modern and professional newsroom.

How the State News pays its bills

Although the State News saved a considerable amount of money before purchasing the $4.6 million building, they took out a larger mortgage than needed as an insurance policy, according to Sturgeon.

“Most college papers that operate as independents operate on the idea ‘how long could we stay in existence if we had absolutely zero advertising money come in?,’” said Sturgeon. “So, typically you keep a year’s money in reserve so that you could go ahead and get a paper out. And it costs us about $2.5 million a year to run the paper.”

For the year ending June 30, 2007, total expenses for the paper totaled $2,528,618, according to an audited financial report prepared by the accounting firm Maner, Costerisan and Ellis.

In that same time, the total revenues of the paper exceeded $3.2 million, increasing the total assets of the nonprofit corporation to nearly $7.3 million.

The State News generated approximately $2.1 million from advertising, more than 60 percent of its total revenue. Investments generated around another half million dollars, while rent income from the two tenants in the building accounted for $141,000.

Most students at Michigan State that take more than six credits are automatically billed a $5 State News tax each semester. The tax, collected by MSU and paid to the State News each semester as a large subscription fee, makes up a substantial chunk of the $465,720 the paper generated from subscriptions last year.

Although there is no official designation for how the student tax money is spent, it generally goes to cover the costs of printing and distribution, according to Sturgeon.

“The vast majority of the State News budget comes from advertising,” Sturgeon said. “In fact, almost all of it does. The money from the $5 then, if you look at it going to printing and distribution, doesn’t cover that cost. So even part of that cost is covered by advertising, but we always look at it as a straight use of it.”

Any student who chooses can request a refund of the tax at the State News office.

Stepping out of the Student Services age

For 57 years, the State News operated out of 4,500 square feet of office space in the Student Services building. As the staff grew and technology progressed, the third-floor office space became cramped and antiquated.

“There was a row of computers we called ‘intern row’ and there were like five computers there, maybe,” said Margaret Harding, the current editor in chief. “But there were always like 10 interns, so interns were always fighting to make sure that they could even get a computer to work on. Otherwise, they were looking elsewhere.”

The main benefit of the Student Services office was its price. It was free.

In 1971, the State News legally separated from the university by forming a nonprofit corporation to run the paper.

As part of the incorporation agreement, the university agreed to continue to provide the State News with the rent-free location, while the newspaper guaranteed that faculty, staff and every place on campus would receive newspapers in exchange, said Sturgeon.

Additionally, the university benefited from the agreement by getting out from under the financial burden of the paper’s operating cost and removing itself from consideration as a target in any libel lawsuits.

“I think that makes sense that if people want to sue for libel they are going to sue where pockets are deep, and that’s the university,” said Sturgeon. “But by being a separate entity, the university is actually very protected from that.”

The Board of Directors discussed buying a new building for more than 20 years, alternating between on-campus and off-campus plans.

From 2000 to 2005 the paper worked closely with the university to find a new location on campus. Multiple plans to build a small, environmentally friendly building fell through, and the board focused its efforts on an off-campus location, ultimately approving the purchase of the current location.

On Aug. 16, 2005, the staff began moving into the 9,500 square feet office that is more than twice the size of the Student Services location.

The new office screams modernity: stylish tract lighting highlights rows of white Macs resting on modern furniture that sits atop sand-colored hardwood floors.

“Our building is great,” business reporter Craig Trudell said via email. “I’ve taken family members and friends in to work with me to show off how nice it is in here.”

The best part of the new building is its atmosphere and the image that it projects, according to Harding.

“When people come in for the first time, I think we’re looked at as, ‘Wow, you guys look like a professional newspaper.’ … I think that helps a lot with both people who come in from outside and see us and also new people who start working here, because it kind of ups the degree of professionalism.”

The building also provides the State News with a small source of income – the paper inherited the leases of building tenants Powerhouse Gym and Trillium Gallery.

The only noted downside to the building is the lack of adequate parking. The paper provides the professional staff, crime reporters and photographers with parking passes, but the majority of the staff is at the mercy of the city of East Lansing.

“Parking is a bit of an issue at our location,” said Trudell. “… I don’t like to pay to park, so really the only time I drive to work is on Sundays when the lot behind our building is free. … It would definitely make it easier if we had better parking capabilities for me to do a story that requires me to drive into Lansing for a last minute story, for example.”

“I don’t think the State News will ever move again,” said Sturgeon. “Heavens, we were in Student Services for almost 50 years. So I’ll be long gone by when there’s another move. This has been a long, long-term goal of alums of the school and the State News and folks in the j [ournalism] school that have served on the board.”