City public health official defends decision to block Metal Shredder’s proposed move to the southeast

CHICAGO – A senior city public health official defended his department’s decision to block a metal scrambler from moving to the Southeast Side, arguing the move would have detrimental effects on residents of a neighborhood that has been long struggling with significant industrial pollution.

Megan Cunningham, the city’s deputy public health commissioner, underwent a grueling, eight-hour testimony and cross-examination before an administrative law judge on Wednesday as lawyers for the shredding company questioned her on the merits of the city’s decision to deny the permit.

The denial dates back to February 2022, when the Chicago Department of Public Health refused a permit for the assets and employees of the renamed General Iron scrap iron shredder to move from Lincoln Park to 11600 S. Burley Ave. on the East Side: a big win for local environmental justice lawyers who had gone on hunger strike to protest the move.

RELATED: The city denies a permit to controversial metal scrap yard Southside Recycling after activists fought for years

But the shredder’s parent company, Resource Management Group, immediately filed suit in multiple courts and appealed the decision, arguing that the denial violated the company’s constitutional rights and violated a previous contract it had signed with the city. The company spent tens of millions of dollars building the site along the Calumet River, thinking it would get the necessary permits to operate as Southside Recycling.

At Wednesday’s appeals hearing, held in a small windowless room normally reserved for parking ticket disputes, Cunningham supported the decision to deny the permit, testifying that a federal EPA investigation into an earlier approval of the project from the state EPA prompted the department to take a closer look at its environmental review.

“With the support of the US EPA, we have identified that a [health impact assessment] it was a valuable and important step for us to take in this particular permit decision,” Cunningham said. “We were not just evaluating this permit in a vacuum, but the effects on top of what is already happening in the neighborhood.”

After the EPA announced it disagreed with the state’s approval, the city suspended its review of the permit to conduct the impact assessment, Cunningham said.

The impact assessment, which it conducted, recommended the health department deny the permit on the grounds that the southeast side was already overloaded, that the metal shredder would negatively impact quality of life, and concerns on the company’s compliance history.

“I think we understand that this is a risky business, one that has real potential environmental and health concerns and requires a real degree of care and oversight,” said Cunningham. “The permission is only as strong as the company’s willingness to comply.”

Asset management group attorneys argued that the city should not have incorporated the health impact assessment into its review.

The decision to deny the permit also came two days after the federal Department of Housing and Urban Development told the city in a letter dated Feb. 16, 2022, that it had opened an investigation into whether federal laws on civil rights had been violated by attempting to relocate an industrial polluter to a majority black and Latino neighborhood from his former home in whiter and more affluent Lincoln Park.

HUD officials concluded six months after the city violated civil rights laws.

RELATED: General Iron Officials Say Emanuel, Lightfoot Trustees Pushed for Metal Shredder to Relocate Southeast: Report

A lawyer for the wrecker, Jeff Rossman, disputed the timing of the denial on Wednesday, suggesting the city refused the permit because it learned the HUD investigation could jeopardize more than $700 million in federal funding annual.

“Some of the funds may be at risk depending on the outcome of the HUD investigation,” Rossman said. “I want to ask what impact that finding had on the decision to deny the permit two days later.”

Cunningham said it was the decision of the city’s public health commissioner, Dr. Allison Arwady, to withhold the permit and that he did not believe the HUD investigation had played a role in it.

Rossman also pressed Cunningham about the city soliciting federal EPA involvement in the permitting process. A letter from the city’s legal department to an EPA employee in February 2021 asked whether “the U.S. EPA will suggest that the Chicago Department of Public Health suspend the final operating authorization process,” Rossman said.

The letter of inquiry came months before the EPA formally told the city that it did not agree with the state EPA’s approval, causing the review to be suspended and the health impact assessment to begin.

Cunningham said the US EPA said it changed its opinion on state approval of the project after the change of federal governments.

“When the city realized that the US EPA was looking at the permitting decision made by the Illinois EPA differently, it gave us pause,” Cunningham said. “And we knew we had to take another look, a deeper look, at this stage of the city’s overhaul.”

Over nearly five hours of cross-examination, the junk shredder’s lawyers hammered Cunningham with questions about each of the health assessment findings, especially its standards for traffic and air pollution. The assessment said the facility would have negative impacts on both, although neither would have a high enough rise to impact residents, the closest of whom live within 2,000 feet of the site.

“There is no healthy level of exposure to air pollution,” Cunningham said.

Rossman also asked if the city would use the same rigorous standards in its review of a permit application from Sims Metal of Pilsen, the city’s only other scrap recycling facility. Cunningham said the two requests were not alike because SIMS wanted to renew its permit, rather than build a new facility.

In his final line of questioning, Rossman noted that the facility complied with all state and federal requirements. Cunningham agreed yes, but said the city still had the authority to deny permission, looking at the development holistically.

“These were assessments of factors that were taken collectively to make a conclusion,” Cunningham said. “There wasn’t a single threshold number.”

The appeals hearing will continue on Friday, with two more city officials slated to testify.

Asset Management Group attorneys formally requested on Wednesday that Dr. Arwady be subpoenaed, which city attorney Brad Wilson strongly denied.

Judge Mitchel Ex, who is presiding over the hearings, said he would consider the matter and decide on Friday whether Dr Arwady can be called to testify.

The unusual appeal has two more hearings scheduled after Friday, January 27 and 30.

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