May 20, 2009 in Business

Station to resume music broadcasts

KAZZ for sale after disputes among owners
By The Spokesman-Review
 
Photos by DAN PELLE photo

Spokane attorney Nancy Isserlis is KAZZ-FM’s court-appointed receiver. The station expects to be back on the air this week, for now playing a pop-music loop.
(Full-size photo)(All photos)

They didn’t cover how to run a radio station when Nancy Isserlis was taking courses at Gonzaga University Law School.

But in the past few weeks a Spokane judge appointed Isserlis as the receiver in charge of putting a Deer Park-based radio station back on the air. And KAZZ-FM should be operating by the end of this week after nearly a year off the air, Isserlis said.

After working with bankruptcies and corporate insolvency issues for 27 years, Isserlis took on the station job because, she said, it offers a chance to have some fun.

“It’s fun to be a fiduciary,” she said, using the legal term for court-appointed caretaker in charge of a company or property.

In that role, Isserlis doesn’t make any profit from the station but would be paid by the court based on hours she works.

The court requires that she get KAZZ back up and running, then sell it for the best possible price.

“I’m a neutral third party, with equal responsibility to everyone,” Isserlis said.

In recent years she’s been given other receiver’s duties. The most complex involved managing the liquidation of bankrupt North Idaho homebuilder Sullivan Homes Washington.

“The radio station is much simpler,” Isserlis said. “You have just one asset, the license.”

The backdrop to the receivership role was a series of disputes involving the couple who launched KAZZ and the last owner, an Arizona company called Pro-Active Communications.

Earle and Barbara Kazmark started KAZZ in 1986 as a Top 40 station. They later toyed with the idea of making it an all-kids programming station, but that effort failed.

The Kazmarks sold the station in 2003 to a company that then sold it in early 2006 to Pro-Active.

The owner of Pro-Active, Gerald Clifton, of Scottsdale, turned it into an adult-contemporary station. He added a booster in west Spokane to try to extend the signal to the South Hill and Spokane Valley.

Clifton also moved the KAZZ control booth to a main-floor studio on the street level of the former Rock City Grill building, 505 W. Riverside Ave., in downtown Spokane.

But he ran into money troubles with a creditor, who last year repossessed some of the broadcast equipment used to run the station.

Clifton shut down KAZZ in early June 2008.

While the Kazmarks then tried to pry the station license away from Clifton, the clock began ticking on KAZZ.

By Federal Communications Commission rules, if a station stays off the air 12 months in a row, the owner loses the license and the FCC can auction it off.

The Kazmarks’ attorney, John Montgomery, obtained an emergency court order this month, appointing Isserlis as receiver. He arranged for the FCC to transfer the license to Isserlis and away from Pro-Active.

Never having operated a station before, Isserlis contacted Montgomery, who in turn contacted Earle Kazmark. Kazmark is hiring area radio engineers to resume the station’s broadcast signal, Isserlis said.

For now KAZZ will operate in robot mode, transmitting a tape loop of pop music to meet FCC requirements, Montgomery said. Most of its coverage area is in north Spokane and parts of North Idaho.

To sell the station, Isserlis will rely on media brokers whose job is to find buyers interested in radio stations. Isserlis said it’s not clear how much a station like KAZZ is worth.

“I don’t have any offers yet,” she added.

If it does sell, the beneficiary would be Kazmark, who is owed close to $700,000 from Pro-Active from the 2006 sale, Montgomery said.

Also standing to benefit are any creditors who might be owed money by Pro-Active, Isserlis said.

The sale of KAZZ was supposed to fund the retirements of the Kazmarks, who planned to leave Washington and live full time in Arizona, Montgomery said.

But Barbara Kazmark died earlier this year at 71.

And Earle Kazmark, 75, must wait through another round of hoping a willing buyer is found for his station, Montgomery said.

Tom Sowa can be reached at toms@spokesman.com or by calling (509) 459-5492.


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