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South Chicago, East Side

After EPA Told Chicago To Halt South Side Metal Scrapper Permit, General Iron’s Owner Sues City For $100 Million

Southside Recycling is suing the city, alleging officials broke their agreement to help move General Iron’s operations to East Side.

The sun sets over the planned location for Southside Recycling, 11600 S. Burley Ave. on Feb. 22, 2021. Four Reserve Management Group recycling facilities currently operate at the East Side site.
Colin Boyle/Block Club Chicago
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EAST SIDE — Owners of a planned South Side metal scrapper are suing the city for more than $100 million and the right to open for business after the city halted its permit review at the urging of the Environmental Protection Agency.

Southside Recycling and parent company Reserve Management Group are suing the city and public health commissioner Dr. Allison Arwady, alleging the city “broke its agreement with RMG” to help move General Iron’s operations to 11600 S. Burley Ave. in East Side.

The companies are suing for damages “well in excess” of $100 million. They cite $80 million spent on the new Southeast Side facility in anticipation of receiving a final permit, and lost profits from closing General Iron’s Lincoln Park operation at the end of 2020.

They’re also suing to force the city’s Department of Public Health to issue Southside Recycling’s final permit. Mayor Lori Lightfoot halted the health department’s permit review May 7, after the U.S. EPA urged the city to more carefully scrutinize the impact of allowing another polluter to open on the Southeast Side.

The controversial plans for another scrapper in the East Side neighborhood have drawn heavy criticism from residents and environmental justice activists. Four other RMG scrappers already operate on the same site.

Since General Iron’s closure last year, Southside Recycling “has jumped through every possible hoop, has supplied every last piece of information, has cooperated through every City delay, and has more than satisfied every permitting requirement,” the lawsuit reads.

In a statement, Mayor Lori Lightfoot said the health department’s review of Southside Recyling’s plan has been “thoughtful, data-driven and robust.” Lightfoot did not directly address RMG’s claims that the city violated its agreement with the company, nor its claims that city officials assured the company the operating permit will be issued.

“Given the recent directive from the U.S. Environmental Protection Agency, we must work with them to conduct a further analysis of potential adverse environmental impacts,” Lightfoot said. “Because this matter is now being litigated, we will have no further comment.”

The stalled operating permit is the last of two city permits Southside Recycling would need to begin operations in East Side. The health department quietly approved an air pollution control permit to the company last fall.

In the lawsuit, RMG officials cited the pollution control permit as an indication the East Side facility was on track for city approval.

But health officials have long downplayed the permit, and previously said it could not be taken as a guarantee that Southside Recycling would be allowed to open.

“The facility cannot start recycling operations without first being issued [an operating] permit,” health department liaison Ivonne Sambolin wrote in a September email to environmental activists and city officials. “CDPH has made clear that any installation activities are taken at the company’s own risk.”

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