Terrorists disclosed they’d stored chemical weapons inside a high-rise, and emergency workers had to go in and secure them.

The make-believe scenario Tuesday at Keystone Towers made for a daunting plotline.

But the derelict structure’s true situation is daunting, as well.

The Marion County Health Department boarded up the 13-story apartment building, a block off Keystone Avenue on East 45th Street, in August 2008 after the eviction of the last remaining residents.

The owner, Southeastern Partners of Hickory, N.C., owes more than $1.3 million in back taxes and penalties, and an additional $500,000 in 2008 taxes will be due soon.

“It looks unlikely (Southeastern Partners) will come back and reclaim it,” said David Wu, Mayor Greg Ballard’s policy director.

But spokesman Mark Wilson said Southeastern is negotiating with a nonprofit consortium that wants to convert the building into senior apartments. Wilson declined to disclose the consortium’s identity.

Built in 1973, Keystone Towers was touted as the city’s first project to have a mix of apartments and retailers.

Today, weeds and mud choke its parking lot, windows are broken, and its walls sport graffiti such as “Vile” and “Warrior Boyz.”

Wu said demolition would cost “at least $1 million and maybe $5 million,” the range reflecting uncertainty about the building’s condition and the extent of asbestos and mold contamination. Wu said video taken during Tuesday’s training exercise would be used to evaluate the building’s state.

“We’re sort of killing two birds with one stone,” he said.

Even with its problems, Keystone Towers appears interesting to would-be developers. In addition to the unidentified nonprofit consortium, two groups say they want to rehab the Northeastside site into housing and mental-health counseling facilities for veterans. Members of both groups attended Tuesday’s training exercises.

Brandon Cagle and Zach Goss of Veterans Construction Group said “Save Our Veterans” stole their idea.

“Save Our Veterans” principals Victor Wakley and Jerry Jacobson denied the charge.

A police officer interrupted the conversation and separated the rivals.

Both groups estimated the cost at $20 million to $40 million, yet neither group has funding.

Kenneth Griffin, who runs the veterans portion of the city’s Homeless Initiative Program, said such housing could help about 1,100 homeless veterans.

“There’s nothing like this in the city,” Griffin said, “and it would be great for homeless veterans.”

A city action last week adds to the hopes for redevelopment. The city took possession of another derelict landmark, the main building of Winona Hospital, in the 3200 block of North Meridian Street. Plagued by vagrants, thieves scavenging copper pipe and more than $1 million in unpaid taxes, the former hospital failed to sell at a recent tax sale.

The city has no immediate plans for the former hospital but will seek proposals.

Keystone Towers’ tax sale is scheduled for March 18, but the soonest the city could seize it would be October 2010.