Heat a large, heavy-bottomed pot over medium-high heat. Add olive oil and let it heat for about 30 seconds. Add diced onion and red pepper. Cook, stirring occasionally, until very tender, about 6–9 minutes.: The pan should smell faintly warm and the oil will shimmer when it is ready, not smoke. As the onion and red bell pepper soften you will hear occasional gentle sizzling and see edges go translucent then take on a golden tint, releasing sweet, caramelized aromas. This stage builds the sweet heart of the chili and breaking down the vegetables here helps thicken the sauce later. A common mistake is rushing the heat too high, which browns edges too fast and leaves the inside undercooked; keep the temperature steady and stir every minute or two so nothing sticks. If the pan starts to smoke, lower the heat, and add a splash of broth to deglaze and capture those browned bits.
Reduce heat to medium. Add garlic, chili powder, oregano, cumin, basil, seasoned salt, cayenne, paprika, and pepper. Stir constantly for 45 seconds to 1 minute until fragrant.: Once the vegetables are tender, adding minced garlic and spices releases an immediate aromatic pop that will fill the kitchen with warm, toasted notes. You should smell toasted chili and cumin quite quickly; the mixture will go from vegetal to deeply spiced. Stirring constantly keeps the spices from clumping or burning and allows their essential oils to bloom into the oil, integrating flavor throughout the pot. Beware of overcooking here — garlic can turn bitter if left too long — so watch the time and remove from direct heat briefly if any sign of scorching appears.
Carefully pour in the undrained diced tomatoes (they may splatter). Stir for about 20 seconds. Add black beans, pinto beans, green chiles (if using), corn, vegetable broth, sugar, and the bay leaf.: When the tomatoes hit the hot pan you may hear a brief sizzling and see the mixture begin to deglaze, lifting browned bits into the sauce for extra depth. Use a long handled spoon and add them slowly to avoid splatter. The canned tomato liquid helps create the base of the chili while the beans and frozen corn introduce texture. Stir just long enough to combine before adding the broth to establish the simmering liquid. A typical misstep is adding too much liquid at once; if the chili seems thin, simmer to reduce rather than adding thickeners.
Stir to combine. Reduce heat as needed to maintain a gentle simmer, stirring occasionally. Let cook for 25–30 minutes.: You want a gentle, steady simmer that produces little bubbles and a cozy smell of melded spices and tomato. Over the simmer the sauce will darken and concentrate, and the beans will soak in flavors. Stir periodically to ensure nothing sticks to the bottom and to check the consistency. If the simmer is too vigorous you risk breaking down the beans excessively and thinning the chili with evaporation, so lower the heat to keep it gentle. This long gentle cook is what allows the layers of flavor to marry.
Remove 1-1/2 cups of chili and transfer to a blender. To avoid spills, remove the blender lid’s center insert and cover the opening with a kitchen towel. Blend until smooth, then pour back into the chili and stir.: When you blend a portion you create a velvety body that thickens the pot without resorting to flour or cornstarch. The aroma will be fuller and the texture more cohesive once the blended portion returns. Use caution during blending because hot liquids expand; the kitchen towel trick and removing the center insert relieve pressure while protecting your hands. A common mistake is blending too much at once which can cause a hot splash; blend in batches if needed and be sure to secure the lid well with a towel as described.
Squeeze in fresh lime juice and stir in cilantro (if using). Adjust seasoning to taste. Serve with your favorite toppings—Cheddar cheese and sour cream are my go-to!: The final squeeze of lime brightens the deep, smoky flavors and lifts the palate, while chopped cilantro gives a fresh herbal finish. Taste for salt and heat, then tweak with a pinch more seasoned salt or cayenne according to preference. When serving, the contrast of creamy toppings with the spicy, warm chili creates delightful temperature and texture differences. One mistake is adding acid too early; it can mute slow cooked flavors, so save bright citrus for the end to preserve the layered profile you built during cooking.