Hook, Online, and Sinker

Minneapolis neighborhood honchos are betting on Tyrone Reed's dot-com dream. But is there an operator error?

Becky Olson remembers the moment her neighborhood organization, the Whittier Alliance, made its first concerted foray into the digital age. For years the group had been struggling to come up with ways to connect with area residents; surveys, newsletters, and community forums all had failed to reach more than the usual suspects. Then last summer, one of Olson's fellow volunteers happened to visit a public school in Wayzata, where he saw a touch-screen computer kiosk in the lobby. Wowed by the technology, he passed along the information to the Alliance board. In short order the group tracked down the company that had installed the machine: Community and Family Information Centers, Inc. (CFIC), a small, privately held Internet startup based in Bloomington.

CFIC's president and founder, Tyrone Reed, was quick to pitch the Whittier folks a deal. He would provide a kiosk for the neighborhood, along with Web-hosting, design, and technical-support services, all paid for with advertising dollars and some public funds. Whittier would get wired, Reed would make a profit--his proposal called for his firm to keep 85 percent of any revenues from the project--and everyone would march happily into the cyberfuture.

Volunteers in Whittier, and Minneapolis officials, were enthralled, and soon all the usual dot-com buzzwords were flying. The kiosk, along with as many as five desktop computers set up in public locations throughout the neighborhood, would at last provide residents with "equal access" to cyberspace, allowing them to tap into a flood of information from government, business and nonprofit organizations, along with gobs of data on jobs, housing, the arts, and so on.

Neighborhood Revitalization Program director Robert Miller says Reed's info kiosks could soon pop up all over Minneapolis
Craig Lassig
Neighborhood Revitalization Program director Robert Miller says Reed's info kiosks could soon pop up all over Minneapolis

With the enthusiastic backing of the city's Neighborhood Revitalization Program (NRP), the Alliance agreed to commit some $28,000 in NRP funds to the project. Olson, a self-described computer novice who now chairs the neighborhood's Kiosk Task Force, says she is particularly excited by the possibility of acquiring translation software to help make community information accessible to Whittier's non-English-speaking residents. "Whittier is leading the pack, doing something new," she gushes.

Olson hasn't been the only cheerleader. NRP director Robert Miller views what he dubs a "one-stop neighborhood information resource center" as an example of both cutting-edge public-private partnership and democracy in action. Whittier--a square bounded by Lake Street, Franklin Avenue, Lyndale Avenue, and I-35--has a relatively large population of immigrants and poor people, Miller points out, and presumably a below-average level of computer ownership. The kiosk project, he suggests, could help close the "digital divide" between cyberspace haves and have-nots.

Civic boosters in Hershey, Pennsylvania (a.k.a. Chocolate Town), were similarly excited in the mid-Nineties when Reed--then CEO of another dot-com venture, Interactive Media Technologies--blew into town with a similarly attractive proposal--a touch-screen kiosk to be installed in the local theme park, Hersheypark. Members of a business group called the Hershey Partnership fronted Interactive Media from $250 to $1,500 apiece to advertise on the kiosk, according to Tony Nestico, an attorney representing the Partnership. But the deal quickly soured, adds Partnership member Tom George: "Once he got his money, he disappeared and never produced anything. "Everybody involved was upset. Ten or twelve people lost money."

According to an affidavit filed by Reed in connection with a lawsuit the Partnership ultimately filed against him, the group deserved the blame for his venture's failure because they "implied everyone was excited to be on our kiosks....The end result was a drastic lack of participation and very few ad sales," he wrote, adding that the project cost Interactive Media some $50,000. A Pennsylvania judge failed to see things Reed's way and in 1997 slapped the company with an $8,000 judgment. Collection was turned over to an Eagan lawyer, David Hellmuth; he won't comment, except to note that so far his client has not been paid and that "we'll probably be pursing this matter again."

None of the kiosk boosters interviewed for this story had heard of the Hershey debacle. But the Whittier project has set off a small fracas of its own--one that began, fittingly, on the Net. On Friday, February 18 Brad Canham, editor of the Whittier Globe, posted a brief note questioning the deal on a neighborhood discussion list, Whittier Onelist. Canham says he had become disenchanted with the endeavor as he and Reed negotiated over his monthly newspaper's potential involvement with the Whittier Web site. He hoped CFIC would pay a nominal fee for any content provided by the Globe--maybe $100 a month--but Reed argued that instead, the paper should pay a setup fee for the privilege of being featured. Canham also considered subcontracting for Reed through another computer-kiosk maintenance firm run by him and his brother, but that deal was derailed as talks over the Globe's role heated up.

Soon, Canham says, he began to wonder about the other financial aspects of Reed's project--in particular CFIC's plan to keep the lion's share of any revenues. His post concluded with a two-word warning: "Buyer beware."

Tyrone Reed wasted no time in firing back: In a response posted past midnight that same day, he pointed out that Canham had erroneously pegged the Alliance and NRP contribution to the project at $50,000 rather than $28,000. But what surprised Canham and other list members was the tone of the post--a major departure from the upbeat rhetoric that had characterized Reed's previous public statements.

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