Reserve Management Group, the company formerly known as General Iron, which has sought for years to open a metal recycling facility on Chicago’s Southeast Side, appears headed back to court to press its claims Mayor Lori Lightfoot and City Hall owe them more than $100 million for allegedly violating the law and a contract when the city bowed to political pressure and denied the permit needed to operate the recycling plant.
On Feb. 18, the Chicago Department of Health announced it would deny a permit to the company seeking to operate the facility known as Southside Recycling.
The city’s health administrators said they determined “the potential adverse changes in air quality and quality of life that would be caused by operations, and health vulnerabilities in the surrounding communities – together with the company’s track record in operating similar facilities within this campus – present an unacceptable risk.”
The decision to deny the permit for Southside Recycling prompted a sharp response from RMG, who promised to resume their lawsuit seeking a court order forcing the city to grant the permit, and pay them at least $100 million for the denial.
The lawsuit had been largely placed on hold by the courts, pending a final decision from the city on the permit request.
“We have built the most environmentally conscious metal recycling facility in the country, but politicians and government officials have ignored the facts and instead were cowed by persistent false narratives and misinformation aimed at demonizing our business,” RMG said in its statement.
“What should have been an apolitical permitting process was hijacked by a small but vocal opposition that long ago made clear they would unconditionally oppose this facility, facts and science be damned.
“Politics, not environmental or public health protection, is the only reason that the city denied Southside Recycling’s permit to operate.”
The company said it would “continue to pursue all avenues to challenge this decision, including pressing our lawsuit against the city, which will likely result in taxpayers being on the hook for hundreds of millions of dollars in damages.”
Further, RMG said the decision by the city sends a disturbing message to companies seeking to do business in the city:
“The city is not a reliable partner and is not open for business,” RMG said. “Chicago has loudly stated that politics – not signed agreements, its own laws and regulations, nor actual protection of human health and the environment – is the ultimate consideration in all matters.”
RMG, formerly known as General Iron, filed suit in May 2021, demanding the city pay them more than $100 million for an alleged politically motivated bureaucratic nightmare the company says it has been forced to endure at the hands of the city and the activists that city and federal officials allegedly are seeking to appease by appearing to backtrack on the city’s earlier support for S0uthside Recycling’s new $80 million metal recycling facility.
The company has sought to open the new facility on a new 175-acre site in Chicago’s South Deering neighborhood since 2018.
That move was prompted by the city’s decision to pressure General Iron to close the metal recycling facility it had operated for decades on Chicago’s North Side for decades, citing emissions and pollution concerns.
In the years since, the city and Southside Recycling have worked on the necessary permits to allow the work to proceed on a new 175-acre site in Chicago’s South Deering neighborhood. According to court documents, the recycling company has owned the land for decades.
According to the complaint, the city repeatedly assured the recycling center developers that its plans either met or exceeded all of the city’s rules. Southside Recycling then obtained all of the needed permits from the state, including emissions permits for its metal shredder from the Illinois Environmental Protection Agency.
They noted the IEPA modeling and review work, which was supervised by the U.S. EPA, “expressly addressed the important environmental justice concerns of the community” and “explicitly took into account the Southeast Side’s existing environmental burdens.”
And, in their Feb. 18 statement responding to the final permit denial, RMG added: "The City’s own health experts, using intentionally inflated parameters to overstate the effects of the operation, still concluded that the facility poses no risk of adverse health effects above the benchmarks defined by the U.S. EPA."
However, when the company submitted its formal large recycling facility permit request to the city in November 2020, the project came under assault from activists both at public hearings and in public demonstrations, demanding the city deny the permit request.
The activists have cloaked their demands in concerns over the project’s alleged impact on the neighboring predominantly Black communities.
Those activists also joined the court fight, intervening in the action to press their own claims.
Judges in federal and Cook County courts have each initially brushed aside Southside Recycling’s claims, saying the company had not yet received a final decision from the city.
However, in rejecting RMG’s request for a temporary restraining order last August, a Cook County judge determined RMG may still be able to pursue its claims for hundreds of millions of dollars in damages from Chicago city taxpayers, should the city ultimately refuse them a permit.
RMG has appealed the Cook County judge’s decision. A state appeals court has not yet weighed in.
RMG has been represented in the action by attorneys David J. Chizewer and Harleen Kaur, of the firm of Goldberg Kohn, of Chicago.
The city is represented by attorneys from its Department of Law.