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Chicago denies permit for scrapyard at heart of 'environmental injustice' battle

General Iron had been in a wealthy, majority white neighborhood on the city's North Side. An attempt to reopen operations in a mostly Latino area mobilized residents.
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CHICAGO — City health officials on Friday denied a key permit to a scrap metal facility planned for a largely Latino neighborhood, handing a victory to residents who had fought the project for more than two years and led the Biden administration to raise concerns of "environmental injustice."

After a year of delays and town hall meetings, the Department of Public Health's denial of the operating permit blocks Reserve Management Group, a metals and electronics recycling firm, from moving ahead with its plan. On its website, the city said its refusal to grant a permit means the company "cannot operate the Southside Recycling facility." 

"It's like winning the Super Bowl and being the underdogs," said youth activist Óscar Sanchez, 24, a lifelong Southeast resident who was involved in a monthlong hunger strike protest last year. "We're going up against institutions worth millions of dollars and powerful people."

General Iron's site on the North Side of Chicago
General Iron's former site in the North Side of Chicago on Jan. 11, 2021.Nima Taradji / for NBC News

In a response Friday, Reserve Management Group said it would "pursue all avenues to challenge this decision," including litigation.

Community activists had blasted the company's proposal to vacate its business, known as General Iron, from the affluent and majority white North Side neighborhood of Lincoln Park and open a new site rebranded as Southside Recycling in a mostly Latino and Black working-class community about 20 miles away.

For many, the move seemed all but certain with the announcement in late 2019 of a city-approved "exit plan" devised under Mayor Lori Lightfoot's administration. In addition, the Illinois Environmental Protection Agency also approved permits for the project in June 2020.

But the city's permit process hit roadblocks as environmental groups and Southeast Side residents questioned how a business with a history of air pollution, noise complaints and explosions could set up shop in a community with a higher rate of asthma and chronic health issues than the North Side.

In May, the Biden administration's top environmental official, Michael Regan, reiterated to Lightfoot in a letter that health data showed the neighborhood "ranks at the highest levels for many pollution indicators." The city agreed to conduct a health impact analysis with the results guiding its permitting decision.

In the meantime, the city faced lawsuits from residents to stop the project. Reserve Management Group also sued the city for more than $100 million last summer to compel it to approve the permit. But a federal judge threw out the complaint, ruling the city was "entitled to engage in careful consideration of proposed land uses."

The permit decision came after a series of virtual town halls in which city health officials acknowledged that opening another industrial facility in an area already burdened by manufacturing plants and scores of salvage yards would adversely affect residents' quality of life.

City officials pointed out that potential emissions from the company's shredding operations could be a concern, although a consultant hired by the city said he did not believe there would be an increased risk to people's health.

"We are committed to protecting and enhancing the health, environment, and quality of life for all Chicagoans," the city's health commissioner, Allison Arwady, said in a statement Friday. "In an already vulnerable community, the findings from the (health impact assessment) combined with the inherent risks of recycling operations and concerns about the company's past and potential noncompliance are too significant to ignore."

A coalition of community and environmental groups celebrated after the announcement, saying in a statement that "this decision can be a turning point for communities of color that have been hurt by environmental racism for decades."

Regan, the administrator of the U.S. Environmental Protection Agency, said the city was right to act in favor of residents' health.

"This is what environmental justice looks like: All levels of government working together to protect vulnerable communities from pollution in their backyards," Regan said in a statement.

But Reserve Management Group on Friday accused city officials of being "cowed by persistent false narratives and misinformation aimed at demonizing our business." The company said in a statement that it had proposed a "conscious metal recycling facility" but what "should have been an apolitical permitting process was hijacked by a small but vocal opposition that long ago made clear they would unconditionally oppose this facility, facts and science be damned."

Despite a victory, Sanchez said that he, too, feels betrayed by the mayor's office and other elected officials, but for another reason: Those who had endorsed the project initially only relented under pressure from the federal government and the community.

"We see the hypocrisy. That's the most stunning thing here," Sanchez said. "There's so much political theater that's happening. The pollution is making us sick, but the political theater is what's killing us."

Safia Samee Ali reported from Chicago, and Erik Ortiz from New York.