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Dan Bishop and Angie Packer have a brook near the back yard of their year-old home in Michael’s Landing. The brook has a feeder stream, of sorts, snaking through the back yard. And, after a rainstorm, they have a waterfall where the brook meets a wooded ravine.

“In Iowa, we would call that a drainage ditch,” Packer said, pointing out the obvious: The brook, its feeder stream and the waterfall create a nice mind picture, but they shouldn’t exist.

The landscape of Michael’s Landing, rolling hills in West Des Moines where Regency development companies planned a “live, work and play” mini-community, creates its own pleasant scenery.

Uncertainty over the future of the development clouds the view from Bishop and Packer’s home.

“I thought I was buying land in a development that would be finished over time,” Bishop said.

That time could stretch from the originally envisioned three years to seven to 10 years, according to some observers of Central Iowa development.

Regency defaulted on every loan tied to the project after the company ceased operations in April 2008. Sheriff’s sales that will complete the transfer of ownership to banks holding bad development loans are scheduled for Tuesday in Dallas County.

Goodbye debt, hello weeds

When it closed, Regency walked away from a promise to pave 88th Street along the east border of the development from roughly Mills Civic Parkway to Booneville Road.

The company left behind weeds and drainage issues that resulted in an order from the U.S. Environmental Protection Agency to correct the problem. Michael’s Landing soil was flowing through a creek and fouling the Raccoon River.

Black silt fences follow the contours of Michael’s Landing and can be seen in every direction from Bishop and Packer’s home. It keeps runoff out of their back yard, for the most part.

The fence was put in place after First National Bank Midwest filed a lawsuit and a judge appointed a receiver for the approximately 112 acres covered by a development loan.

First National Bank Midwest eventually received a $6.2 million judgment against Regency. Real estate brokers and developers doubt that the lender will receive a bid near that amount, if it receives any offers at all at Tuesday’s sheriff’s sale.

Also at the sale, Community Business Lenders will attempt to recover all or part of a $11.9 million judgment against the borrowers.

Robert Douglas, who represented the lender in its case against Michael’s Landing LLC, said he was not aware of any serious interest in the lender’s property.

Vantus Bank and Bankers Trust Co. already are owners of about 50 acres in the development. Vantus, which loaned money for land slated for retail stores, obtained the title through a sheriff’s sale last month after it won a $6.3 million judgment against Michael’s Landing LLC in Dallas County District Court.

At the sheriff’s sale, Vantus asked for a minimum bid of $6.1 million for a buyer to take the property off its hands. No offers were made and the formality of transferring the deed was completed.

Bankers Trust obtained the deed to roughly 33 acres planned for townhomes in a voluntary agreement with Michael’s Landing LLC.

Suku Radia, Bankers Trust president and CEO, said the bank is in no rush to sell its property, especially not at bargain-basement prices.

He does believe the entire development, which he describes as one of the premier properties in West Des Moines, will eventually find a buyer or buyers.

Developers say that the announcement that Microsoft Corp. would build a data center just south of Michael’s Landing triggered inquiries that waned when the project was put on hold.

Action auction day

Michael’s Landing is not the only Regency property being offered for sale Tuesday. Northwest Bank has won a nearly $3.5 million judgment against a townhome project in Urbandale.

And two other pieces of development ground in West Des Moines, one formerly owned by developer Dave Walters along South 60th Street and another formerly owned by developer John Kline north of Mills Civic Parkway near 88th Street, also are for sale.

Developers and real estate brokers say it is unlikely that lenders holding bad loans on any of the properties will find buyers given current market conditions.

Instead, they say, much of the distressed development land needs to drop at least another 10 percent to 20 percent in price before investors will be ready to buy.

There are several reasons. Credit is tight, although banks say they are willing to lend to buyers with sound financial credentials, and the land was bought at artificially high prices.

In Michael’s Landing, that is bad news for Bishop and Packer.

Bishop had hoped that the sheriff’s sales this Tuesday would result in banks leaving the real estate business and developers returning to complete the parks, homes and streets that were promised when he bought his lot in January 2008.

A park was planned across the street from their home; instead it is a slump in the landscape, just downhill from a mound of dirt and clay that sprouts bull thistles in the summer.

“We like the idea of living out here by ourselves, but we are ready for development to continue,” Bishop said.