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Last Updated: Mar 31, 2009 - 2:29:20 PM |
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A new flag began flying on Monday over the former Victor Plastics plant. With the acquisition of the company essentially complete, the facility is now known as Riverbend Industries, Victor Division. Mitch Traphagen Photo
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Aquisition Called a ‘Done Deal’;
Flood Insurance May Become an Issue
VICTOR - Riverbend Industries of Ft. Smith, Ark., has all but completed their acquisition of Victor Plastics, Inc. The Victor plant is now known as Riverbend Industries, Victor Division. The company also owns the former Victor Plastics facility in North Liberty.
“Bill Collins, River Bend Manager, called Monday and said the [audit of the] VPI inventory went very well over the weekend,” said Victor Community Development Association president Dr. Leonard Seda. “The workers and auditors did excellent work. I talked to [CEO] Ron Embree today, Tuesday, as he traveled to see a major customer, and he stated, ‘It’s a done deal; we’re just waiting for a few routine papers to be signed.’
“I’m very pleased with the results,” Seda continued.
The VCDA has been involved with the situation since VPI first declared bankruptcy on Jan. 15.
A revision to the 100-year flood plain, however, has raised an issue regarding flood insurance with the plant. As the facility is located in unincorporated Iowa County, the only current option for Riverbend Industries is to purchase private flood insurance since Iowa County does not participate in the National Flood Insurance Program. Private insurance is considerably more expensive, with premiums reportedly 30 percent higher than would be paid through the NFIP.
One Riverbend official said he hopes for a resolution to the issue.
The issue of flood insurance for Iowa County has been raised recently by Marengo realtor Tom Sandersfeld. Sandersfeld has been involved with two properties which the lack of available flood insurance scuttled potential sales. Flood insurance has become a topic of importance recently due to tightened requirements by mortgage lenders and, as such, unincorporated Iowa County homeowners could face significant challenges selling their homes should they reside in a flood plain. Sandersfeld first brought the issue to the board during a meeting in February and again last month. The supervisors will take up the matter again at Friday’s meeting.
Both Marengo and Victor already participate in the NFIP. The Victor Plastics plant, however, lies outside of the Victor city limits and is therefore not eligible to be covered under the city program. According to City Clerk Fred Stiefel, the possibility of the city annexing the plant in order to provide NFIP coverage is unlikely.
“Annexation requires that the property ‘connect’ to the existing city,” Stiefel said. “So this would be a three mile (approximate) distance - probably not likely from a city standpoint.”
According to Bill Cappuccio of the Iowa Department of Natural Resources, coverage under the NFIP is limited for commercial buildings.
“Flood insurance can be purchased for any building within that community - regardless of size, or whether or not it’s in the flood plain,” Cappuccio said. “For non-residential buildings, the amount of coverage available is $500,000 for building and $500,000 for contents.”
The Victor plant building and contents, presumably, are valued in excess of those limits. Sources close to the deal, however, have said the financing agreement only requires coverage to the maximum amount available.
For Riverbend Industries, a resolution may be somewhat slow in coming even if the Iowa County supervisors agree to participate in the flood insurance program. According to the DNR, delays of at least a month or more are possible due to the application process and to FEMA personnel commitments to the recent flooding in Missouri and Arkansas.
See also Riverbend Industries Media Release
This story will be updated as information becomes available.
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