City health official defends denial of Southeast Side metal shredder’s permit

The proposed relocation of General Iron to the Southeast Side set off a firestorm of community protests. Now, the metal shredder's owner is challenging a city denial of an operating permit.

Tyler Pasciak LaRiviere/Sun-Times

A top city health official testified Wednesday that the denial of a Southeast Side metal shredder's permit was decided on multiple factors, including residents’ concerns about cumulative air pollution and high rates of chronic diseases in the surrounding community.

Megan Cunningham, managing deputy commissioner of the city's public health department, said that a comprehensive analysis of the health and environmental factors of three neighborhoods, East Side, Hegewisch and South Deering, persuaded Chicago officials to reject an application to open a car and scrap metal shredding facility on East 116th Street along the Calumet River.

"Our goal is to protect and promote public health," Cunningham said during a city administrative hearing over the rejected permit. "Community conditions are themselves a result of policies."

Cunningham added that city officials were concerned about the "inherent risk" that large scrap metal operations posed, including potential explosions.

"A permit is only as strong as a company's willingness to abide by it," Cunningham said, defending the permit denial last February.

Reserve Management Group, the business that owns the shredding operation, wants an administrative law judge to determine whether the city exceeded its authority in denying the permit for the relocated and rebranded General Iron operation that was reconstructed on the Southeast Side after moving from its longtime home in Lincoln Park.

General Iron was acquired by an affiliate of Reserve Management in 2019 after it signed an agreement with the city that laid out a timeline for closing the Lincoln Park facility and moving it to the Southeast Side. Even as community members protested the move, holding demonstrations and even a hunger strike, Reserve Management built a new shredding operation — at an estimated cost of $80 million — confident that it would get city approval.

On cross examination, Reserve Management lawyer Jeffrey Rossman asked Cunningham a series of questions related to the U.S. Environmental Protection Agency's involvement in the shredder permit, a related civil rights investigation by federal housing officials and Mayor Lori Lightfoot's possible influence in the matter.

The permit denial was made by Lightfoot appointee Dr. Allison Arwady, who heads the Chicago Department of Public Health.

But it was Lightfoot who put a pause on the process in May 2021 after EPA Administrator Michael Regan, appointed by President Joe Biden, recommended a health impact analysis be conducted to determine if an already environmentally overburdened community would suffer as a result of added pollution.

Reserve Management's lawyers have argued that the health impact assessment should not have been part of the process.

Cunningham said such health assessments are being conducted routinely across the country and that they allowed her department to take a more comprehensive approach to deciding the permit.

Some of the factors that influenced the city decisions included the high levels of particle pollution common on the Southeast Side, the lack of access to health care and high rates of chronic heart disease and other illnesses, she said.

Rossman compared a zoning board's approvals for the shredding site in 2019 to those of the health department's assessment.

He noted advanced pollution controls that were put in place for the rebuilt General Iron.

Rossman also questioned why a rival metal shredder, Sims Metal Management, was able to continue to operate in Pilsen without adequate pollution controls.

Sims, which has run afoul of federal environmental laws, is building new pollution controls and must get a city operating permit.

It's not clear that the judge deciding the permit matter is going to be persuaded.

Administrative law Judge Mitchell Ex has repeatedly asked Reserve Management lawyers to not stray too far afield from the defining question: Did Arwady appropriately follow the rules when she denied the operating permit last February?

Reserve Management's lawyers asked for a subpoena of Arwady to testify at an upcoming hearing, a request Ex said he would consider. Last year, Ex turned down the same lawyers’ request to take a deposition from the public health commissioner.

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