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Eminent domain efforts sell scrapyards down the river

Keywords: Tags  Full of Scrap, Knutson Metals Inc., PSC Metals Inc., Lisa Gordon,

Scrap metal recyclers already face a plethora of problems, including reduced margins and increased operational costs as a result of local ordinances. And if such problems aren’t enough, scrapyards also are under attack in what essentially is “the ungreening of America.”

After operating for as long as a century on property that once was considered the “wrong side of town,” scrapyards’ riverfront and urban spaces have now become valuable, coveted targets of eminent domain. Replacing a “green industry” with “green space” does nothing to promote what this country really needs: jobs.

Across the country, more and more recyclers are being asked to pack up their shears to make way for riverfront parks and stadiums so that the public can enjoy the space. But this is not a nation that built itself on leisure time, and the notion that industryÑincluding recyclers, who are such vital links in the raw material supply chainÑshould be displaced by pedestrian paths and playgrounds is ludicrous.

Knutson Metals Inc. will wind down operations and close its doors in Cedar Rapids, Iowa, by the middle of November after 45 years in business. “Some call it progress, while other people call it a shame,” operator Tom Knutson told AMM.

In the 1990s, the city attempted to condemn Knutson’s property for a beautification effort, but he lawyered up and fought the move. The city backed down when they realized how much it would cost to pursue the matter in the courts. Circumstances changed after the city was hit by flooding in June 2008. Cedar Rapids received federal money to install flood protection measures and build an amphitheater on the river. The only problem was the metal recycler that was sitting smack in the middle of a planned parking lot. The city advised Knutson to sell the property or they would use their legal right to seize it. Knutson decided to sell.

Knutson, 67, said he has accepted the situation. “If I was 20 years younger, I would have fought this like hell,” he said. Still, Knutson has no hard feelings and harbors no malice over the long ordeal. He has become a snowbird who likes to flee the cold winters for the Arizona sunshine and points out that he had no one to leave the business to anyway.

But while Cedar Rapids might succeed in redeveloping the site, the extinction of Knutson Metals equates to fewer jobs, less income tax and shrinking tax revenues for the city. If Cedar Rapids were cash-rich, the move could be justified, but the city is struggling like other cities. Its 2013 annual budget is $104.8 million, and the city faces a $3.1-million shortfall that is expected to swell to $17.8 million in 2017.

In St. Louis, a jury awarded the owner of Opal’s Salvage Yard $1.09 million in 2010 when she sued for being forced to vacate her land two years earlier for a redevelopment agency after being in business for 60 years. Opal Henderson said the amount was half of what she should have been compensated for the loss of property and income; after earning $170,000 per year, she basically was given a six-year paycheck and a pat on the back.

The big guns face similar threats as the little guys. Alter Trading Corp. was forced to relocate its Lincoln, Neb., facility to make way for an arena. The city ponied up and paid the recycler $2.9 million to relocate and $1.6 million for the land. One of Carl Icahn’s PSC Metals Inc. facilitiesÑone of the company’s best and highest-volume operationsÑmight encounter a similar problem as the city of Nashville, Tenn., considers using the 55-acre site on the Cumberland River for a proposed ballpark.

While a ballpark no doubt might improve revenue for a city, it will not match the number of jobs generated by river commerce. Riverfronts are vital for interstate commerce and industry, providing an avenue to move goods throughout the country, and Americans are gainfully employed in thousands of spinoff jobs, and taxes are derived from intermodal shipments and ports.

Whether a person leans to the political left or political right, there is no doubt that jobs are the most important matter weighing on American minds, and whittling away at the work force is contrary to where the majority of this country thinks the United States should be headed.

Is it fiscally prudent to kill jobs when so many unemployed people have no disposable income to spend at recreational facilities? It is like getting government money for a residential swimming pool when one can’t even afford the water to fill it.

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