The vacant metal structure that burned over the Labor Day weekend and spewed noxious smoke toward downtown Des Moines once housed a business that was meant to keep construction debris out of the Metro Waste Authority landfill in eastern Polk County.
It also represented one of the far-reaching efforts of the Regency homebuilding and development companies to control virtually every aspect of their market, efforts that ranged from having the Regency named branded on house wrap to maintaining a showroom of appliances and decorative treatments for the homes they built.
Regency was the state's largest homebuilder when it collapsed in April 2008. One of the properties that was owned by one of the more than 300 limited liability companies created by company principals was 1422 Scott Ave., where a fire of suspicious origin burned through shingles and drywall and other debris that had been collected from building sites.
Regency principals James and Robert Myers and other partners created Environmental Reclamation and Recycling to rid Greater Des Moines of the waste left behind by homebuilding. The property at 1422 Scott was purchased for $700,000 in June 2003.
Under the guidance of Metro Waste Authority, which at the time was encouraging companies to recycle construction waste in an effort to keep it out of the eastern Polk County landfill, Regency teamed up with Taylor Recycling of New York state. The company had gained a national reputation for its role in the cleanup of New York City's World Trade Center after it was devastated by the terrorist attacks of Sept. 11, 2001.
Their partnership and the recycling business began to deteriorate after the waste material was rejected at the Metro Waste landfill because it contained decaying gypsum wallboard and other material that did not meet the waste agency's specifications. By 2006, Taylor Recycling and Regency had parted ways, only to be named as defendants in lawsuits brought by banks that had loaned money for equipment purchases at the center.
Just a few months after Regency closed its doors in 2008, Taylor Recycling and the family that owned it filed a lawsuit in Polk County District Court claiming they had been defrauded by Regency principals. The lawsuit even claimed that a Regency lawyer committed malpractice, with his main offense being transferring ownership of the recycling center to entity that was created to secure a loan that was intended to provide a life raft for Regency when it became apparent the company was failing in 2007.
Earlier this year, the Iowa Court of Appeals upheld a Polk County district judge's ruling to dismiss charges against the lawyer. The Taylors also dismissed other defendants in the lawsuit.
That might have cleaned up one legal mess associated with Environmental Reclamation and Recycling, but the construction debris stored inside its sheet metal walls remained, until the building burned over the weekend.
Ownership of the building and 13 other Regency-owned properties in Nebraska, Utah, Greater Des Moines and elsewhere in Iowa was transferred in 2007 to Regency Capital Fund I LLC and used as collateral for a $26.5 million loan.
Regency defaulted on the loan, and all of the properties but one were bought at auction by Denny Elwell Family LC. The property that was not wanted by the Elwell company was 1422 Scott, according to Steve Wandro, lawyer for Regency Capital Fund I.
In the wake of the fire, Wandro said he has been contacted by the city of Des Moines, which wants someone to pay for the final demolition of the building.
The city has initiated condemnation proceedings for a section of the property where the building was located to make way for the Southeast Connector project, an assistant city attorney said.
In the meantime, at least $100,000 is available to pay for the demolition. That is the amount of a bond posted by Regency in 2009 after the Iowa Department of Natural Resources (DNR) initiated efforts to revoke the company's permit to operate the recycling facility.
Regency eventually gave up the permit voluntarily, said Chad Stobbe, an environmental specialist with the DNR.
The department's efforts to award a contract to remove the debris from the building in 2010 failed because estimates soared above the $100,000 that was to be used for remediation of the property.
Legal issues and environmental concerns also have caused potential buyers to back away from acquiring the property, Stobbe and Wandro said.
"Once a year, people would express an interest in acquiring the property for a recycling business or some other purpose, but those never came to fruition," Stobbe said.
The only given about cleanup at the property is that the $100,000 bond posted by Regency in 2009 is available to help defray the bill.
"Those funds are restricted to the cleanup of the property," Stobbe said.