General Iron says it could have stayed in Lincoln Park, but city encouraged it to move to the Southeast Side despite federal probe

General Iron could have continued operating on the North Side while Mayor Lori Lightfoot’s Administration responded to a federal civil rights investigation that launched last fall, a lawyer for the car shredder’s owner said in a court filing Thursday.

Reserve Management Group, which is suing the city over a stalled permit to operate the relocated and rebranded scrap metal shredding operation that is already built on the Southeast Side, referenced a two-page agreement that the city signed with the company in September 2019.

That document laid out a plan for General Iron to close its longtime Lincoln Park operation at the end of 2020 so the company could move to East 116th Street along the Calumet River by the spring of this year, provided it won an operating permit. In a filing in federal court in Chicago, RMG said it “has complied with the Agreement to its substantial detriment.”

But last October, the U.S. Department of Housing and Urban Development opened a civil rights investigation into city zoning and land-use practices. At that time, the city had a chance to tell RMG that there will be a delay in getting a permit. The Lightfoot Administration, instead “told HUD, in writing, that HUD had no right or jurisdiction to interfere with the City’s permitting process,” the court filing said.

“The City did not attempt to call off its Agreement with RMG. It did not tell RMG to continue operating on the North Side because the City could not abide by the Agreement. Instead, the City insisted that RMG follow through on its promise to cease operations [and] said the permit was imminent,” the filing said.

The company spent $80 million to build a new facility and, unless it can begin operation, the company is financially vulnerable, the filing said.

Lightfoot halted the permit review process in May at the urging of the U.S. Environmental Protection Agency’s top official, who said he was concerned about the rights of Southeast Side residents who live in an already heavily polluted area.

Brett Chase’s reporting on the environment and public health is made possible by a grant from The Chicago Community Trust.