The truth behind Real Times Media's "$5million" contract - New York News

The truth behind Real Times Media's "$5million" contract extension

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'Michigan Chronicle' owned by Real Times Media 'Michigan Chronicle' owned by Real Times Media
DETROIT, Mich. (WJBK) -

A big question of why here - why would EM manager Kevyn Orr put $5 million toward a company that has taken out loans totaling more than $15 million? The answer, when you break it down - it's not really $5 million.

That company is Real Times Media. It's the parent company of the Michigan Chronicle and several other media properties, and according to its publisher Hiram Jackson, the company received a set of contracts for $4.1 million, and one for $900,000. (Seemingly, $5 million.)

According to Detroit councilman James Tate, the set of contracts was brought to city council members on September 3rd, strictly for their information, but already approved by Orr (while the council was on recess).

The first contract says Real Times Media was awarded a $4.1 million advertising contract for legal notices, but councilman Tate says $3.6 million of that was already set aside for that purpose. So really, it was approximately $500,000.

That half a million, Jackson says, is spread out over 6.5 years, noting that the company's yearly revenue for legal notices is less than $100,000. For example, this year's revenue has been about $50,000. Orr's approval was for a one-year extension (to last through July of 2014) of that contract that was established back in 1996 (then renewed each year thereafter).

The second contract is a $900,000 contract with Paradise Valley Real Estate Holdings to renovate an abandoned building in Detroit, in which the chronicle will use as office space. That money is coming from a federal grant strictly for renovations - not from the city.

"We're rebuilding a building that has been vacant for 15 years. I'm trying to invest in the city," says Jackson.

In the end, unable to reach Kevyn Orr's team Friday, Jackson says Orr likely sees this contract extension as: 1. a run-down Detroit building is being renovated, and 2. those legal notices need to be published anyway, according to law.

As far as the debt goes, Real Times Media spokesman Bob Berg says the two loans used to expand business totaled about 15.5 million dollars - with about 3 million paid back. The rest was converted to equity (the city's pension fund owning about 30%). "I have never missed a payment on those loans and have never been in default," said Jackson. "All money borrowed has been paid back."

James Tate says it wasn't a startling decision on Kevyn Orr's part - it was a contract extension.

Hiram Jackson and his spokesman Bob Berg say there is absolutely no link between the company's loans and money given to the Kilpatrick Civic Fund.

"The Civic Fund had nothing to do with the loans for this company," said Jackson. "I have no ties to the Kilpatrick administration."

Berg also added that the second loan was given after Kilpatrick resigned.

Meanwhile, Jackson says he's hopeful for the future of the Chronicle, and its presence in the community.

"The Michigan Chronicle has been the voice of the community since 1936. We're really excited about moving downtown and being a part of the Detroit renaissance," said Jackson. "We're going to have a great future."

VIDEO: Fox 2's Erika Erickson's live report

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