Irvine Recycler Will Close 198 Centers, Cites Lack of Use

The largest bottle and can recycler in California is closing nearly a quarter of its redemption centers statewide because of a lack of consumer response, the company said Thursday.

20/20 Recycle Centers of Irvine will immediately close 198 of the 885 igloo-style redemption centers that it operates in designated zones throughout the state, said David Little, 20/20 vice president.

The company said its lack of business is caused by shortcomings in the bottle-recycling bill that was enacted last year and gave rise to companies like 20/20.

The current recycling system mandated a network of parking-lot redemption centers. But Little said consumers are taking bottles and cans to established recyclers outside the convenience zones because they pay more for redemption.

These businesses can offer more because they had no new start-up costs and had an established customer base, Little said.

“We’ve invested $15 million, we employ 1,320 people and we’ve done everything we can to ensure the program’s success,” Little said. “We are now at a point where something has to be done if the program is going to be maintained.”

20/20 is losing an estimated $1 million each month, Little said, and could go out of business “right away” without relief.

That help could come in the form of a quick-fix bill--S.B. 2823--scheduled for a vote in the Assembly Natural Resources Committee on Monday. It would increase start-up subsidies to recyclers. A long-term measure to permanently revamp the state’s recycling system is also in the works.

Leon Vann, chief of the state Division of Recycling, said all of the major recyclers in the new designated or “convenience” zones are in economic trouble. Mobile Recycling Services of Stanton used to operate 240 recycling centers, Vann said, but the firm has already closed at least 60 of its enterprises.

The current recycling program is a complicated system in which consumers sell bottles and cans to redemption centers and recyclers, which sell them to companies that reclaim the aluminum, glass or plastic, for a profit.

Redemption centers pay the consumer with money collected from the bottling companies, under the administration of the state Conservation Department.

Redemption centers also receive a bonus, 0.4 cent per container at present. The more containers a center takes in, the bigger the bonus from the state.

According to Little, most of the bonus money goes to established recyclers outside the designated zones, which often pay more than the penny per container offered by such redemption centers as 20/20.

“Many of the advantages of the system are directed to old-line recyclers and scrap dealers outside of the convenience zones,” Little said. “What’s happened is that the old-line scrap dealer is therefore able to pay an extremely high amount of money for aluminum cans.”

Vann agreed to a degree: “About 70% of the (bonus) funds are going outside convenience zones, and 30% of those funds are staying in.”

But the original bottle bill is only partly to blame, he said: 20/20’s system “was put in place very quickly. There were some significant inefficiencies in there. They went from zero to 1,700 employees in 90 days. Some of their facilities were not operated in the most efficient manner. They got some severe criticism because of that.”

Assemblyman Burt Margolin, a longtime backer of recycling, said 20-20’s announcement shows the nine-month program needs a complete overhaul.

“The closure of centers because they don’t have enough volume is an indication . . . that the system is in serious trouble and it needs a major reform,” said Margolin (D-Los Angeles). “The . . . refund value is not attracting consumer participation.”