Copyright M Live Michigan
ANN ARBOR, MI — A potential deal for the Ann Arbor District Library to acquire the Ann Arbor Observer is still in talks and nothing is final yet, library leaders say. AADL has publicly released a confidential term sheet showing a $650,000 purchase price for AADL or an entity formed by AADL to gain ownership of the monthly news publication. The Observer would terminate all its employees and the purchaser would offer employment to them with substantially comparable wages and benefits, the terms state, setting a Jan. 1 date by which to negotiate and execute an agreement. But that timeline may be extended now as library leaders say they’re still exploring the right model to use. AADL Director Eli Neiburger previously said the Observer would become a wholly owned subsidiary of the library. “As we continue to work through what the possibilities are here, it is not looking like it will be a wholly owned subsidiary,” he said. “There’s a number of different models that could be used, most of which are nonprofit models. So, part of the question there is, does the Observer want to become a nonprofit?” Talks are continuing and any agreement will need to come before the library board to be discussed and deliberated, he said. The board voted at the start of its Oct. 27 meeting to go into closed session to discuss the opinion of its legal counsel on the Observer acquisition. Local attorney Tom Wieder later addressed the board in open session, speaking as a resident with concerns about it. “The plan for the AADL, a government body, to purchase, take over and absorb the Ann Arbor Observer, a private, truly independent news organization, is a terrible idea,” he said. “It is more like the relationship between the Russian government and Pravda than what the relationship between government and the press should be in this country.” The process has lacked transparency, Wieder said. He also argues there are serious legal questions about whether a district library can be involved in such a deal. AADL spokesperson Rich Retyi said Thursday, Nov. 6, the library is still in the early stages of discussions. “We’re enjoying working through the details of what form this could take in partnership with the Observer,” he said. “Our goal is to deliver a model that allows the library to ensure a vibrant future for the Observer that works for everyone.” The Observer, available for free home delivery to Ann Arbor-area residents, has served the community since 1976. AADL first announced it planned to acquire the publication in late September. The Observer’s owners — publisher Patricia Garcia and editor John Hilton — joined in the announcement, saying they’re thrilled and grateful the library is committed to its future as an independent local news source. Hilton did not immediately respond to a request for comment on the latest talks of a nonprofit model. AADL administration previously was aiming to have a deal go to the board for a vote in December. It’s now hoping to bring a draft of a potential agreement to the board in the coming months, Retyi said. Library leaders have heard community sentiment in favor of the Observer maintaining editorial independence and they say they agree that’s important to preserve. “I don’t think we have any intent to disrupt that,” Trustee Scott Trudeau said. “We want them to continue to serve the role they’ve served in the community.” The local reporting the Observer does is essential and it’s in alignment with the library’s mission to provide valuable content and information, Trudeau said. “I think we can come up with a structure that makes that clear and solid for the community, so everybody can have confidence that there’s no behind-the-scenes meddling,” he said. “I also am thinking about insulation sort of going both directions, in terms of liability for the kinds of things that newspapers get sued for,” AADL Board President Molly Kleinman said. “Ensuring that the library’s finances are protected from whatever that looks like also feels like a key piece of this to me.” AADL has an annual budget of $23 million, made up almost entirely of property tax revenue. It had a fund balance of over $12.2 million at the end of September, nearly $9 million of which was unassigned, library financial records show. Setting up the Observer as a nonprofit is familiar ground since there’s already public and nonprofit media in the country, Kleinman said. “I wish we had more,” she said. “I love the idea of having more with the Observer.” Trustee Catherine Hadley stressed the importance of being transparent with the community. “We can say like, ‘Oh, well, trust us,’ but we hear that from a lot of people that maybe folks might not want to trust,” she said. Having a wall between AADL and the Observer staff so they can do their work is the only way it will work, she said, adding she’s cautious but excited to see what happens. Board Secretary Onna Solomon said it’s significant the Observer trusts AADL as an entity to carry on its vision. “Whatever this ends up looking like, I think that’s such an important piece of the puzzle is honoring what they do,” she said. “And the whole reason we’re interested in figuring this out with them is because we want to keep this entity alive in a way that supports their local independent reporting.” Discussing the changing media landscape on a broader level, Solomon said there’s little media that can be trusted these days. The infrastructure has been “crumbling all around us,” she said, and the question of new models is something “we’re grappling with as a culture.” She suggested a nonprofit news source trusted as a place where people can feel confident they’re getting facts and quality news would be a good thing to support. There’s a lot of excitement around the idea of a closer relationship between the AADL and the Observer, Board Treasurer Lisa Campbell said. “Now I think we’re at a stage where we need more information about what form of a relationship between the two organizations might be viable,” she said. Trustee Jim Leija said it feels like Ann Arbor has been in a “local news free fall” for the better part of 20 years. The impulse to figure out how to participate in the sustainability of vital local journalism is a good one, he said. It may not work out, he said, but he takes pride in AADL trying to do it. AADL also is considering its next steps for a redevelopment of the downtown library as part of a mixed-use high-rise spanning its current downtown property and the adjacent Library Lane parking lot, a concept city voters approved in August. Neiburger told the board last week he didn’t have much of an update on that. AADL is waiting to hear from the city on finalizing an agreement for the Library Lane property to be transferred from the city to AADL, he said. “The main thing that we’re doing right now is starting to talk to development consultants and see who we might want to hire to work with us to be the library’s expertise as we start to navigate this process,” he said. AADL is reaching out to about 15 firms and he plans to bring finalists to the library board’s facilities committee before deciding how to proceed, he said. AADL plans to go through a public design process for the new library building. It remains to be seen whether it would include space for the Observer, which has an office at 2390 Winewood Ave., off Stadium Boulevard on Ann Arbor’s west side.
