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Could Mayor Lightfoot’s confusing stand on General Iron cost Chicago millions?

RMG built an $80 million scrap metal plant on the Southeast Side last year, based on a 2019 relocation deal it had with the city under Lightfoot.

Mayor Lori Lightfoot is pumping the brakes on her support for relocating General Iron. But her timing and methods threaten to cost the city millions.
Sun-Times

Mayor Lori Lightfoot should have stood on the side of the angels two years ago and simply banned General Iron from relocating to the Southeast Side.

But instead of listening to the community activists who warned against moving the longtime North Side metal scrapping operation — a well-known polluter — to a predominately Latino and Black neighborhood on the Southeast Side, the Lightfoot administration signed an agreement in 2019 to help the company make the move.

Now the feds are probing the civil rights implications of the relocation and General Iron’s parent company, RMG, has filed a multimillion-dollar suit against the city for its 11th hour decision this month to delay granting a permit to operate the relocated scrap metal processing plant.

This could cost the city’s taxpayers. RMG is suing the city for $100 million. And Lightfoot’s administration has blown deadlines for document requests related to the civil rights probe, possibly putting at risk tens of millions of dollars in housing-related federal grants to the city.

A mess indeed

It’s not fully clear why Lightfoot is slow-walking the documents the U.S. Dept of Housing and Urban Development has requested as part of its civil rights probe of the General Iron relocation.

In a letter to the city earlier this month, a HUD official noted that the Lightfoot administration is concerned about the release of “sensitive documents” related to the move. It’s an all-too-familiar — and frustrating — tactic used by City Hall to slow responses to Freedom of Information requests and the release of police body camera videos.

This from a mayor who ran as a progressive and promised a more transparent government.

For its part, HUD isn’t taking the delay lying down.

“Regulations require that the City provide HUD access to this information,” HUD official Kimberly Nevels wrote in a May 17 letter to the city. “HUD is authorized to effect compliance with this request by initiating an administrative proceeding or referring this matter to the Department of Justice for enforcement.”

And if that doesn’t work, HUD warns that it is prepared to block federal housing funds that total more than $100 million a year.

City officials issued a one-sentence response to the Sun-Times: “The City has been working with HUD to produce records responsive to its request.”

Maybe, but it’s telling that HUD essentially has had to threaten the city to get compliance.

Meanwhile, the metal recycling company itself is looking to dig into the city’s pockets, having filed its $100 million lawsuit in May.

Operating under a new name, Southside Recycling, the company is upset that the city — once its steadfast relocation partner — now is following a federal EPA recommendation to hold off on granting an operating permit for the new site until an environmental assessment is completed.

“The City’s failure to issue the permit to Southside Recycling has caused significant and potentially permanent damage to Southside Recycling’s business,” the company’s complaint states.

RMG built an $80 million plant last year at 116th Street and the Calumet River, based on the 2019 relocation deal it had with the city under Lightfoot. And the agreement made the city’s commitment plain: “The city will reasonably cooperate with RMG in achieving the efficient, expeditious transition of the Business to the Southside Properties, including reasonable assistance with processing and review of license and permit applications and scheduling of public hearings.”

What a mess indeed.

Lightfoot’s problem to solve

It’s worth noting Lightfoot inherited this lump from her predecessor, Mayor Rahm Emanuel, whose administration began working behind the scenes in 2018 to help relocate the scrapper from Lincoln Park to the Southeast Side — with full knowledge of the area’s historic, industry-related environmental problems.

But it was Lightfoot’s administration that actually inked the deal, while failing to read the room — that relocating a metal scrapper to an area so environmentally toxic that it affects the health of its residents might need further study.

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