ELKHART -- Sturgis Iron and Metal Co. will close, possibly displacing more than 100 workers and ending two years of tension with neighbors who opposed the operation of the Mega Shredder machine at the company's south-side site.
Mayor Dick Moore announced the company's decision during his State of the City address Monday evening.
The development comes after the Michigan-based company filed for Chapter 11 bankruptcy protection this month, a move that would have let the scrap metal recycler continue operations while restructuring its debts.
In a letter (PDF) Moore said he received earlier Monday, Sturgis executive Kevin Young wrote that the company will sell its assets under the bankruptcy action and then go out of business.
He was unsure what that meant for the future of the recycling site at 1514 W. Lusher Ave., which includes the Mega Shredder on Oakland Avenue.
"The Company does not know whether any purchaser of its assets in the bankruptcy action will continue the current operations or employ any of the company's employees," he wrote to Moore in the letter dated Thursday.
The shuttering will affect 109 workers, according to a document accompanying the letter.
Young did not return a call Monday night seeking comment.
In the letter, he blamed the closing on "the sudden and unforeseeable discovery of a potential significant environmental liability."
That refers to the fact that the company falls within the bounds of an old industrial area that the Environmental Protection Agency recently added to its Superfund priority list for cleanup. In an interview two weeks ago, Young said the federal designation -- which was years in the making because of groundwater contamination that pre-dated Sturgis' arrival -- helped kill a deal with a company that was interested in buying Sturgis.
The company had operated in uneasy relationship with the Oakland Avenue neighborhood since it started crushing junk vehicles in the Mega Shredder in early 2006.
South-side residents and Moore's administration said the machine caused noise, dust and odor that hurt people's quality of life. The city issued numerous fines for explosions inside the machine that were mostly traced to liquid propane tanks bursting under pressure.
The mayor, who wrote his State of the City address before receiving Young's letter, said in the speech that: "The city has received blame for what it has allowed, including allowing the machine there to begin with. The city will therefore not approve or allow any more. This company or any possible new owner must take action to reduce the nuisance to the neighborhood ..."
Afterward, Moore said he had heard many rumors that the company was in financial trouble but he didn't want the company to fail.
"I'll send them a letter stating that's certainly not something I had hoped for," Moore said in an interview. "I was hoping to keep the company going and keeping the employees employed."
Oakland Avenue resident Perry Kirkendoll, a chief critic of the Mega Shredder, said he wouldn't yet consider the closing a victory.
"I won't be satisfied 'til I see that machine disassembled," he said. "When I see them start hauling that thing away, we're going to celebrate."