Des Moines' Microcosm of Economics - Part Deux
Starting essentially from Scratch, Michael Myers grew Regency Builders into the largest home builder in Iowa. By following a well-established pattern of pre-designed homes, Regency allowed thousands of Iowans to break the chains of renting and move into their own homes. Regency homes and neighborhoods throughout Iowa became very recognizable by the uniformity of color and design, but few seemed to care. Other than attempting to break into higher-profit custom homes, the Regency business plan did not seem to change. Michael then suffered through a long illness which apparently ran in the family - Lou Gehrig's Disease. Remarkably, his brother Mark died almost exactly one year later of the same disease. In recognition of Michael's accomplishments - and a $15 million donation - a local hospital planned to name a new west-side hospital after the accomplished home builder.
During his disease and following his death, his two sons took over the company with the assistance of some of the Michael's trusted colleagues. Almost overnight, Regency became a significant competitor in commercial buildings and commercial developments throughout Iowa, but primarily in Des Moines and Cedar Rapids. Anyone driving on I-80 west of Des Moines could hardly miss the huge new office building with the trademark blue Regency sign. Regency seemed to spend with near reckless abandon. You would have had to have your head in the sand not to notice. But, the success seemed undeniable, until 2008.
In text-book style, the seems of Regency's success began to burst. Rumors of the inability to meet payroll for the significant number of employees flashed across the business grapevine. Unfortunately, several of the subcontractors were not part of that network. Both employees and subcontractors went unpaid for weeks of work. Des Moines and communities throughout Iowa were immediately stung. Regency employed hundreds of subcontractors, several of which relied solely on Regency for their work. Mechanics' liens outpaced the local clerk and abstracter's office ability to keep up. Recent home purchasers were left with unsodded yards and incomplete warranty work. No bank in the area dared loan additional funds. Dozens of partially completed homes and several partially completed developments were strewn throughout Iowa. Foreclosure suits by the lenders allowed some of these homes and developments to start to be completed through the appointment of receivers; but, as we all know, now is not the time for such things. The national economy had already burst.
The continued acts of robbing Peter to pay Paul caught up with Regency. It is no more. The large and nearly empty office building sits immediately across the street from me and serves as a daily reminder of excess. The hospital graciously allowed the family to forgo the $15 million donation, and the naming rights for the new hospital. Thank heaven not all home builders in Des Moines went this route. We will dig out. But, because of Regency, it will take all that much longer.
