General Iron owner seeks millions from City Hall over permit denial

The owner of the former scrap metal-shredding operation General Iron is moving forward with a previously filed lawsuit against the city that will seek hundreds of millions of dollars for lost business and other costs.

The partnership that owns the metal scrapper filed its lawsuit in July 2021 after then-Mayor Lori Lightfoot delayed a planned decision on whether to grant the relocated, rebranded business a permit to operate on the Southeast Side.

Residents pushed back on the planned relocation of the polluting business, which shreds junked cars, appliances and other large items as a way to sell the metal for reuse. A longtime fixture in Lincoln Park, the business prompted complaints about smell, noise and even a fire and explosion.

The city’s delay of that decision violated terms of an agreement with the business, which built its operation at East 116th Street and the Calumet River, the lawsuit claimed. The delay also cost the business money, the suit said.

The agreement with the city provided a timeline for General Iron to shut down and move from its longtime home in Lincoln Park to make way for a massive real estate development. General Iron’s Lincoln Park site was closed at the end of 2020, and the owner planned to open a rebranded business, Southside Recycling, in early 2021.

“The city’s failure to issue the permit to Southside Recycling has caused significant and potentially permanent damage,” the lawsuit said.

At the time, the business was seeking “damages well in excess of $100 million.” A Cook County Circuit judge in the case noted the Lightfoot administration had not made its final decision and so the case was put on hold.

That hold status changed in December, and a hearing is set for next month on the matter. Owner Reserve Management Group has not publicly disclosed its updated estimate of damages it believes it’s owed.

Even though Lightfoot appeared to initially support the scrap metal site on the Southeast Side, she ultimately denied the permit in February 2022 after community protests that included a hunger strike. That permit denial led to separate legal challenges. In August, the city’s decision to deny the permit was upheld in court.

Southside Recycling was fully built and ready to begin operations under a timeline set by Lightfoot.

Construction of that operation alone cost $80 million, according to the lawsuit.

The lawsuit alleged that Lightfoot gave into political pressures after an outpouring of community and citywide protests over the planned car shredder move from white, wealthy Lincoln Park to a low-income community of color. The complaints led to a federal civil rights investigation that found the city discriminated against low-income communities by putting polluting businesses in the same areas, largely on the South Side and West Side.

A spokesman for Reserve Management declined to comment.

Mayor Brandon Johnson has vowed to defend Lightfoot’s decision on the permit, though City Hall is not commenting on the recent court activity.

“The city does not comment on ongoing litigation,” said Kristen Cabanban, a spokeswoman for the city’s Law Department.

A hearing on the matter is set for March 10 before Judge Mary Colleen Roberts.