Chicago encouraged General Iron’s move to the Southeast Side, executive says

Top city officials gave assurances that the General Iron metal-shredding operation could move from Lincoln Park to the Southeast Side with the encouragement of City Hall, a company executive said Monday.

“I wanted to make sure the city was on board,” Reserve Management Group Chief Executive Steve Joseph testified at a city administrative hearing over the metal-shredder’s rejected operating permit.

Joseph was asked specifically about a two-page agreement signed between the city and Reserve Management in September 2019, which provided a timeline for the planned General Iron move from its longtime North Side home — at the time, being surrounded by new residential and commercial development — to an industrial area on East 116th Street along the Calumet River.

“We never would have closed on the General Iron assets without this agreement,” Joseph said.

Reserve Management held off on acquiring General Iron from longtime owner, the Labkon family, until Mayor Lori Lightfoot’s administration agreed to terms of moving to the new location — even as Southeast Side community groups were beginning to protest the relocation. Shortly after the city agreement was signed, the sale was completed.

Last February, Chicago Public Health Commissioner Dr. Allison Arwady, a Lightfoot appointee, rejected a permit application to open a relocated, rebuilt and rebranded car and metal shredder due to concerns about pollution and health impact on an already environmentally overburdened area of the city.

Reserve Management immediately appealed the decision through a city administrative process, which will continue through January.

The permit denial followed numerous community protests over the shredder. A federal civil rights investigation found that Chicago’s history of zoning and land-use policies are discriminatory and cited planning leading up to General Iron’s move from a white, wealthy area on the North Side to a working class Latino community on the Southeast Side.

At Monday’s hearing, Jeff Rossman, a lawyer for Reserve Management, said that Arwady “grossly exceeded her authority” and didn’t follow the city’s own rules for the permit process.

City lawyers reject that assertion and accused Reserve Management lawyers of throwing “red herrings” and other distracting details into the city appeal process.

Joseph was asked by his own lawyer about his conversations with the city related to the General Iron move.

He said he became interested in buying General Iron when he saw the business being pushed out of Lincoln Park to make way for a multibillion-dollar development during former Mayor Rahm Emanuel’s administration.

He said two high-ranking officials with the Emanuel administration, former planning commissioner David Reifman and former Deputy Mayor Robert Rivkin, were involved with discussions about the proposed move.

Reifman and Rivkin were actively involved in steps leading up to the proposed relocation of General Iron, internal emails reviewed by the Sun-Times show.

The agreement to move was largely in place under the Emanuel administration, Joseph said. However, when Emanuel decided not to run for re-election, talks with the city were put on hold, he added.

Discussions started again once Lightfoot took office in 2019, and the agreement was signed.

Having watched the pressure city officials were putting on General Iron to vacate its North Side land in favor of new development, Joseph said he was convinced that he needed an agreement in writing.

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