General Iron Owners Sue City For $100 Million After Final Permit Put On Hold Amid EPA Demand For Further Review

CHICAGO (CBS) -- The owners of a Southeast Side metal shredding plant have filed a $100 million federal lawsuit against the city, after Mayor Lori Lightfoot put its permit review process on hold earlier this month.

Southside Recycling and parent company Reserve Management Group accuse the Lightfoot administration of breaking an agreement to help the company move its operation, formerly known as General Iron, from Lincoln Park to a new facility at 11600 S. Burley Ave. on the Southeast Side.

The lawsuit seeks $100 million in damages from the city, and a court order requiring the city to issue the final permit needed to operate the new plant.

"When we announced this project nearly three years ago, we accepted many business risks, but we knew that we would make the necessary investment to design and build a facility that complies with all city, state, and federal standards to protect public health and the environment, and we've done that," RMG CEO Steve Joseph said in a statement. "But one risk that we did not take was that the city would cast aside its rules and agreement and suspend the permit review, without any legal justification, after we met every requirement. We regret filing this lawsuit, but we are left with no choice to protect our business, employees, suppliers, and customers."

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RMG closed the General Iron scrapping operation in Lincoln Park at the end of last year.

The lawsuit claims, when it became clear that the new operation would not get its needed permits by the end of 2020, it questioned the need to close its Lincoln Park plant, but the city responded by threatening to stop the permitting process if the North Side operation wasn't shut down.

"At this time, the City continued to reassure SR that the City had every intention of moving the process along to award the permit in early 2021. Since that time, SR 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 claims.

In response to the lawsuit, a spokeswoman for the mayor's office defended the city's review process for the Southside Recycling facility.

"Throughout its review of this complicated matter, the Chicago Department of Public Health (CDPH) has engaged in a thoughtful, data-driven and robust process that took into consideration the application, supplemental materials, expert reports and studies, as well as input from residents who will be most directly impacted by RMG's proposed new use. Given the recent directive from U.S. Environmental Protection Agency, we must work with them to conduct a further analysis of potential adverse environmental impacts. Because this matter is now being litigated, we will have no further comment," the mayor's office said in a statement.

Lightfoot put the final permit review process on hold earlier this month, after the U.S. Environmental Protection Agency urged the city to conduct a more detailed assessment to determine the health impacts of the new plant on the community.

President Joe Biden's top environmental official told Lightfoot in a letter that he has major reservations about the metal shredding plant moving to the Southeast Side, raising civil rights concerns about the move from a predominantly white neighborhood to a mostly Latino community.

The letter reads, in part, "Substantial data indicate the current conditions facing Chicago's southeast side epitomize the problem of environmental injustice, resulting from more than a half century of prior actions. This neighborhood currently ranks at the highest levels for many pollution indicators used by U.S."

Olga Bautista and her family live eight tenths of a mile from the site.  Bautista and the Southeast Environmental Task Force have been fighting hard to stop the company from getting the permits needed to fully operate.

"They're moving into a community that's already overburdened with polluters," Bautista said.

General Iron has a history of violations with the Illinois Environmental Protection Agency and Chicago health inspectors for emitting toxic fluff and excessive air emissions. For years neighbors of Lincoln Park's General Iron have considered the plant an environmental dumping ground. The company wants to relocate, but Lightfoot put that idea on hold, at least for now.

"We don't trust this company any further than we can throw them, Bautista said. "They were not a good neighbor to the community residents in Lincoln Park."

The facility even had an explosion last year that rocked several homes in the North Side neighborhood.

Lightfoot is holding off on making any decision on that final permit until a more detailed environmental study is completed.

It is unclear how long this study would take, but environmental studies can go on for months.