Hook, Online, and Sinker

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

"This is very slanderous to me, as well as the Whittier executive board and my company," Reed continued. "Your telling people and implying to the board that I am not trustworthy to do business with is stepping over the line." Absent an immediate retraction, he added, "my attorney will be in touch with you Monday morning." The Globe's board of directors, he vowed, would be included "in any lawsuit and depositions." (Canham never did hear from any lawyers; he says Reed "has burned his bridges with me.")

When City Pages contacted him last week, Reed was happy to discuss the kiosk project, but he ended the interview when the subject of his past business dealings came up. On the subject of the Onelist spat, he said he regrets the exchange. "I just want to forget it and move on," he offered. "Basically, I just took it too personally. He didn't have his facts straight and he was asking people to beware of the project without any substantial information to back it up."


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

Canham may not have had anything but gut instinct to fuel his distrust. But the paper trail on Tyrone Reed suggests that his skepticism may have been well-placed. In addition to the Hershey case, Hennepin County District Court records list nine civil suits filed against Reed and his companies since 1979, most of them over unpaid debts.

Perhaps the most striking one involves Steven Durenberger, CFIC's marketing director for a few months in 1997. When he first went to work for the company, Durenberger says, he was impressed with Reed's gung-ho mentality and jovial manner. But the founder's persona didn't readily translate into financial success for Durenberger: At the time, he says, CFIC was concentrating its efforts on pitching its kiosks to suburban malls where, it was hoped, advertisers would embrace the technology. But, says Durenberger, he had trouble selling the concept; according to a lawsuit he later filed, Reed abruptly stopped paying his $300-a-week salary after about a month.

Frustrated, Durenberger quit. When efforts to collect his final paychecks failed, he says he led a posse of friends to the Eden Prairie Mall with the idea of confiscating a CFIC kiosk. By the time he got there, the machine was gone; so, in August 1998, he sued CFIC and Reed.

John Tackett, Durenberger's lawyer, says he called Reed in an effort to settle the matter--which, he points out, involved the relatively paltry sum of $1,200. According to the lawsuit, Reed responded by saying Durenberger "would never be able to collect from him as he knew how to avoid paying bills and debts and that he would simply declare bankruptcy." In September of 1998, a judge issued a summary judgment in Durenberger's favor.

Tackett says Reed has yet to pay a penny, and that by now, interest and penalties have increased the total debt to about $4,000. "The reason I remember this case," the attorney adds, "was Tyrone's brazen attitude. He just said: 'Go ahead and try, there's a lot of other creditors out there.'"

According to filings with U.S. Bankruptcy Court in Minneapolis, Reed does indeed know something about credit disputes. He and his wife tried to file for Chapter 13 three times in the course of the past decade. All those filings, however, were dismissed owing to opposition from creditors--including the Internal Revenue Service, which in a 1998 affidavit alleged that the Reeds had failed to file income-tax returns from 1992 through 1997. At the time, the IRS estimated the couple's federal tax debt at some $218,000.

The Minnesota Secretary of State's office, meanwhile, lists CFIC's registration as "not in good standing" because the company has not submitted required papers for the past three years. Reed's other company, Interactive Media Technologies, similarly failed to renew with the state and is listed as "inactive." Reed did not respond to City Pages' written questions about those matters, except to say that he'd "had a person who had embezzled a lot of money" and that he'd worked to clear up the resulting problems.

The NRP's Miller brushes off questions about Reed's business background. "I'm not going to say that Tyrone's past isn't a little weird," he offers. "But there's lots of businesspeople who are just as bad, if not worse, in some of their histories, who finally find what they're supposed to do in life and make something work."


On CFIC's home page, Reed touts his company as "the foremost authority on Internet-accessible touch-screen kiosks and community-specific web sites." His promotional literature makes expansive claims about the firm's successes: "Along with serving all 81 Minneapolis neighborhoods, we presently serve 23 west-metro communities including Wayzata, Minnetonka, Plymouth and 17 others." City Pages could not locate evidence that CFIC provides services to any Minneapolis neighborhoods. The second claim, Reed acknowledges, is based on the fact that people from 23 cities may find something useful on two Web sites his company has created: www.wayzata.net and www.mtka.net.

The two sites are nearly identical in design, with cookie-cutter art and sometimes dated links sprinkled among pages full of as yet unclaimed advertising banners. While Reed boasts that "our content is updated daily or sometimes as often as every minute," the "Community Announcements" link on mtka.net leads to a blurb on a charity bike ride held last June. Click on the "School Lunch Menu" icon, and up pops a notice that reads: "The file you have requested does not exist on this server."

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