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South Chicago, East Side

Will General Iron’s Operations Come To The Southeast Side After All? Judge Likely To Decide In April

City officials blocked General Iron's parent company from moving the scrapper's operations to East Side, and the company challenged that denial soon after.

Activists protested in 2021, demanding that Mayor Lori Lightfoot deny a permit that would have allowed Southside Recycling to open in East Side.
Colin Boyle/Block Club Chicago
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EAST SIDE — A judge is expected to rule this spring on a recycling company’s controversial bid to move defunct North Side metal scrapper General Iron’s operations to the Southeast Side.

Southside Recycling was blocked by public health Commissioner Dr. Allison Arwady in February 2022 from opening a facility at 11600 S. Burley Ave. in East Side. The facility was set to take on troubled scrapper General Iron’s assets and employees.

Parent company Reserve Management Group spent $80 million to build the East Side facility, company officials said. They appealed the permit denial in the city’s administrative hearings court in March.

Arwady’s decision came after Southeast Side activists organized for years to “deny the permit,” including holding a month-long hunger strike in 2021.

“This is what environmental justice looks like,” Michael Regan — the head of the U.S. Environmental Protection Agency who in 2021 urged the city to pause its permit review and complete a health impact assessment — said after the denial.

City health workers, Reserve Management Group employees and consultants hired by the company wrapped up weeks of testimony Monday about the scrapper’s plans and the permit denial before administrative law judge Mitchell Ex.

Attorneys will continue to argue the case out of court until early April, after which Ex will rule on the case, the judge said this week.

Credit: Provided
An aerial view of Southside Recycling’s shredder, 11600 S. Burley Ave.

Through numerous hours of testimony, city officials defended Arwady’s decision to block Southside Recycling from opening. The plans would have harmed residents of a neighborhood that has long been overburdened with industry and pollution, they said.

Health officials had legal standing to pause the permit review, start a health impact assessment and ultimately deny the permit, city attorneys argued.

A federal investigation into the state’s approval of Southside Recycling pushed the city to look more closely at its own review, said Megan Cunningham, the city’s deputy public health commissioner and leader of the health impact assessment.

Assistant health Commissioner Dave Graham, who handles environmental permits, and environmental engineer Renante Marante, who closely reviewed Southside Recycling’s permit application, also testified about their roles in the permit process.

Southside Recycling’s attorneys pushed to subpoena Arwady, but Ex determined there was no need for her to testify. The three city employees shared details about the review process, and it doesn’t appear Arwady was improperly pushed by Mayor Lori Lightfoot or anyone else to deny the permit, he said.

“I’m not going to read anything into that [denial] letter concerning any undue influence from an outside source,” Ex said.

“It seems very clear to me that the reasons [Arwady] put down in her letter” — including the results of the health impact assessment and past compliance issues at existing Reserve Management Group facilities on the Southeast Side — are her reasons for denying the permit, Ex said.

Credit: Colin Boyle/Block Club Chicago
A 2021 protest in Logan Square opposing Southside Recycling’s bid to move to East Side.

Southside Recycling’s attorneys repeatedly disputed Arwady’s decision and questioned her authority to block the company’s operations.

City health leaders unjustly ignored the results of their own health analysis and the state’s prior approval to deny the permit under pressure from residents, Lightfoot and the federal government, company attorneys argued.

Prior permits allowed the facility to be built with the caveat it could not operate unless the final permit was granted. Southside Recycling moved forward anyways, spending tens of millions of dollars to build the facility based on city officials’ assurances of an operating permit, company officials testified.

City officials showed substantial support for the plans to open Southside Recycling for years prior to the final permit’s denial. Their support spurred Southeast Siders to file a civil rights complaint, which led federal officials to determine the city discriminated against Black and Brown residents by moving polluters into their neighborhoods.

Former Mayor Rahm Emanuel’s administration got the ball rolling on General Iron’s exit from Lincoln Park, Lightfoot’s administration agreed to help the company move to the Southeast Side in 2019 and the Zoning Board of Appeals approved plans for the scrapper that same year.

The health department also quietly issued the first of two permits in 2020, breaking a promise to notify residents as permit reviews moved forward.

Southside Recycling has sued the city for $100 million in damages, but federal and county judges have dismissed the claims. The company’s appeal of the county court’s decision is pending as the administrative hearings case plays out.

Credit: Colin Boyle/Block Club Chicago
The planned location for Southside Recycling, 11600 S. Burley Ave.

Southside Recycling’s attorneys also showed an April 2021 draft document apparently showing Arwady’s comments to be made upon the final permit’s approval, suggesting the city was ready to issue the permit just weeks before the review was paused, according to the Sun-Times.

Company attorneys said Ald. Susan Sadlowski Garza (10th) shared that draft with the company, as well as other internal communications between city officials, the Sun-Times reported. Ex denied the company’s bid to enter the draft as evidence.

Reserve Management Group employees and consultants testified their East Side facility would have featured significantly stronger pollution controls than the troubled Sims Metal Management facility in Pilsen.

Sims continues to operate as the city reviews its application for the same permit Southside Recycling did not receive, which amounts to unfair treatment, company attorneys argued. Ex repeatedly said he has not determined whether Southside Recycling’s testimony about Sims will have any impact on his decision.

Sims was sued by the state in 2021 for allegedly breaking air pollution laws. Federal regulators found this week that air pollution levels around the Sims facility would not cause short-term health effects, while “more data is needed to evaluate long-term risks.”

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