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General Iron owner sues city for $100 million — again — over delayed permit

A federal judge tossed out a similar lawsuit last month, where the metal shredder’s owner claimed its constitutional rights had been violated by the city’s failure to allow it to open on the Southeast Side.

Activists occupy the intersection of Milwaukee, Diversey and Kimball during a protest and rally Thursday, March 4, 2021 against General Iron’s relocation to the Southeast Side.
The owner of General Iron has filed another lawsuit against the City of Chicago and CDPH Commissioner Dr. Allison Arwady.
Tyler LaRiviere/Sun-Times

The owner of a controversial car-shredding operation has filed another complaint against the city of Chicago — this time in state court — after a federal judge tossed out a similar lawsuit last month.

The latest lawsuit, filed by the owner of General Iron, aims to force the city to issue a final permit for a new, renamed scrap-metal operation at East 116th Street and the Calumet River, in addition to seeking more than $100 million in damages due to the delay.

Mayor Lori Lightfoot announced in May that she would hold off on issuing the permit until an environmental assessment could be completed. That decision came right after a request from President Joe Biden’s Environmental Protection Agency administrator.

The Lightfoot Administration signed a two-page agreement with General Iron and Reserve Management Group back in September 2019, at which time the company was proposing to buy the shredding operation and move it to the Southeast Side, where it has existing operations. The agreement also laid out plans to close General Iron’s facility in Lincoln Park. RMG then began building its new operation, rebranded as Southside Recycling (SR), which the lawsuit says cost $80 million.

The company claims it followed every step of the two-year permitting process, building the “most environmentally conscious recycling facility in the country,” but that the city has now let down its end of the agreement.

“When it came time for the City to follow its own rules and promises, and to award the permit to SR, the City chose to avoid, delay, and suspend its review of SR’s permit application,” the lawsuit said. “As a result, facing irreparable harm and financial damage, SR asks this Court today to do what the City was obligated to, but failed to do: issue SR the operating permit.”

The city, which declined to comment Thursday because of the pending litigation, has denied the company’s claims in legal documents.

In May, RPM filed a federal suit against the city, claiming its constitutional rights were being violated because of the delayed permit decision.

At the end of June, Judge Robert Dow Jr. tossed out the company’s case and rejected the claim that its constitutional rights as a landowner had been violated but allowing the company to refile in state court. Following the decision, RPM released a statement that they would “immediately seek a prompt ruling in state court.”

In the new lawsuit filed Thursday, against the city and Chicago Department of Public Health Commissioner Allison Arwady, the company claims they have not provided “even a single legally justifiable excuse” for delaying the permit.

“This Court must step in to remedy the City’s violations and award the permit,” the lawsuit said.

Community opposition to the new shredding facility has been strong and some activists even staged a month-long hunger strike. Residents say the move is a case of environmental racism as it relocates a polluting business from a white, wealthy neighborhood to a Latino-majority community on the South Side.

In reaction to the latest lawsuit, the coalition “Stop General Iron” tweeted, “General Iron doesn’t care about environmental justice. They say so themselves. They want $100+ million from taxpayers & a permit to pollute.”