At a worn-out playground in the Parkway Gardens low-income housing complex, Mykita Stadium, a high school student, kept a close eye on her 4-year-old sister as she played in the fading daylight.
It was a warm February day, with temperatures near 70 degrees, yet just a handful of the more than 1,000 children who live in the historic development on Woodlawn's western edge came out to play.
The reason? "It's violence — people just want to shoot and kill for no reason," Stadium said just before taking her sister inside ahead of the darkness. "I leave at an early time if I want to go outside, or I go in the car, or I have my mom pick me up."
Stadium wasn't exaggerating. In a little more than five years, 41 shootings have shattered the calm along the blocks that line the publicly subsidized brick apartments, most recently killing an 11-year-old girl, Takiya Holmes. Last August, Nykea Aldridge, the cousin of Chicago Bulls guard Dwyane Wade, was shot to death while pushing her newborn daughter in a stroller.
Unlike Chicago's notorious housing projects of the past — the now-demolished Cabrini-Green or Robert Taylor Homes, for instance — this complex is not owned and operated by a government agency. Rather, divisions of a New York-based private developer better known for its luxury towers downtown, Related Companies, own and manage a complex that has become a symbol of the violence wracking the city.
The complex is jointly owned by Related Affordable and Related Midwest, both divisions of their parent, and is run by Related Management.
With pressure building on Mayor Rahm Emanuel to bring the city's gun violence under control, the private owners of this complex are feeling the heat, too.
Neighborhood leaders are asking why a real estate firm with a $20 billion-plus portfolio of properties cannot do more to help its desperately poor tenants, who have been buffeted by violence. Related is led by Stephen M. Ross, owner of the Miami Dolphins and a significant donor to an Emanuel campaign fund.
"Given the fact that (Related) gets federal dollars for rents, I'd suggest they do something to enhance individual lives, and that's what they are not doing at all," said the Rev. Corey Brooks, pastor of New Beginnings Church, just south of the development. "I believe you can be a business owner and make money and at the same time care about the lives of individuals who live on your property."
But officials from Related said that the answers are not so easy — and that they have supported after-school programs and playgrounds, which are investments in their tenants, who face a lot of the same challenges that plague other crime-infested neighborhoods.
"Parkway Gardens is without a doubt a very challenging property," said John Kennedy, senior vice president of Related Management. "We've worked, since the time of acquisition, to provide safe and decent housing for our residents here."
On Friday, after meeting with an official from the U.S. Department of Housing and Urban Development, Related announced a series of security improvements, including limiting and redesigning entry points to the complex, better lighting, more fencing and cameras and beefed-up security staffing. The measures were the culmination of months of planning, the company said.
"We have worked closely with the Chicago Police Department and other City agencies as well as HUD to plan and effectuate these changes," the company said in a statement.
HUD officials stressed the need for better security at Friday's meeting. "HUD places resident safety as its utmost concern," the agency said in a statement.
Hot property
In 2011, subsidiaries of Related Companies acquired the 35-building, 694-unit complex for $40 million and embarked on a major renovation. Wedged between Martin Luther King Drive and a CTA yard, the property was built in the 1950s to accommodate residents drawn to Chicago in the Great Migration. Former First Lady Michelle Obama lived there as a child.
But though Parkway Gardens won distinction for its Modernist design, it was built in a way that isolated it from the broader neighborhood, with many buildings set back from the road, which creates hidden spaces. Add in the dense concentration of impoverished tenants, and the complex becomes a challenge for any manager, experts say.
Related, though, saw opportunity when it acquired the development as part of a post-recession buying spree in which it scooped up dozens of similarly subsidized housing complexes across the country. In Chicago alone, the company owns nine complexes, including Lathrop Homes, with a total of nearly 3,000 apartments, HUD records show.
Betting on low-income housing marked a return to its roots for the Related Companies, which in recent decades has become known for its soaring developments like the Time Warner Center and Hudson Yards in New York. In Chicago, for example, it bills its new luxury rental building 500 Lake Shore Drive as "45 stories of priceless panoramas, refined leisure and plush furnishings." The company is on deck to develop two choice sites here, the former Chicago Spire property at 400 N. Lake Shore Drive and a 62-acre spread along the Chicago River in the South Loop.
Few of the low-income properties Related bought have the potential to generate rent revenue like Parkway. If the complex is fully leased, Related stands to collect nearly $10.5 million a year in rent. It's the company's second most lucrative subsidized property in terms of rental income, records maintained by HUD show.
Despite a history of problems at Parkway Gardens, competition to buy the complex ran high, in no small part because of the long-term rent guarantee that came with ownership.
The market for similar buildings — often called project-based Section 8 because of the sort of subsidies that are tied to the buildings — has heated up in recent years, according to Alan Cravitz, a vice president at Draper and Kramer, who for decades has helped structure financing for such projects.
"These are pretty safe bets," Cravitz said. "You've got a long-term contract with the government and rents are higher than market rates."
Tenants are required to pay up to 30 percent of their income, and the federal government pays the rest. Rents in the project-based properties typically are calculated on an average for a broader area within a city, presenting particularly good deals for landlords like Related, who can collect premium rents in poor neighborhoods.
A three-bedroom apartment at Parkway, for example, can bring in up to $1,375 per month, and a two-bedroom can command $1,167, according to Related. That's up to 14 percent higher than HUD estimates is "fair market rent" in the surrounding Woodlawn community, records show.
For Related, there were other taxpayer-backed financial incentives related to Parkway Gardens as well.
The project was financed, in part, through $59 million in bonds issued by the Illinois Housing Development Authority. Under that financing agreement, Related, as the project sponsor in the transaction, is also allocated federal low-income housing tax credits that could amount to $30 million over 10 years.
And the company's successful bid to have it added to the National Register of Historic Places earned it another $9.6 million in federal tax credits. Although that designation also can be a burden to property owners — it limits the ability to reconfigure the development in the future – it provided a boost to Related's bottom line.
Those and other tax credits helped finance the $100 million purchase and rehabilitation at Parkway Gardens, which made Related eligible for yet another infusion of government money — a $10.4 million developer's fee, according to the Illinois Housing Development Authority.
Questionable conditions
After the rehabilitation was complete in 2013, Mayor Rahm Emanuel joined officials in a reopening ceremony, where he lauded the public-private partnership among Related; Wells Fargo, which also helped finance the project; and public agencies as an example of "investing in a path to a brighter future for our children."
Since acquiring the complex, Related invested, on average, $61,500 per unit upgrading flooring, bathrooms, appliances and other infrastructure, according to state records.
The complex had a history of violence and health issues, including chronically broken heaters and rodents, before Related took over, city records show. But even after the overhaul, complaints from tenants about the conditions at Parkway Gardens continued.
City inspectors cited 6514 S. Martin Luther King Drive, just one of the 35 buildings across the complex, with more than three dozen code violations between the time Related took over the property in 2011 and the end of 2016.
Among the infractions was a 2015 violation over windows that "opened easily and stayed open." It was issued four months after a child reportedly fell from a sixth-story window.
Kennedy declined to comment on the incident citing related, ongoing litigation.
A year later, city lawyers filed two lawsuits against Related citing open code violations at Parkway Gardens and calling for an injunction or "if necessary, that a receiver be appointed, to bring the subject property into compliance," court records show.
The type of code violations are "not atypical" for a development of this size, Kennedy said. "There are a number of challenges that we have with residents, particularly in a building of this size, so it is a continual challenge for us to maintain and repair a lot of damage to the units," he said. "We make corrections immediately."
Bill McCaffrey, a spokesman for the city's law department, said the company has been addressing building code violations, some prior to previous court dates in the fall and some in advance of the next court dates in May and June.
By federal inspection standards, Parkway is one of the Related's lowest-scoring properties, HUD data shows. Its latest score was 72 out of 100, putting it just above what was historically the threshold for passing.
That score can be biased, experts warn, in historic buildings.
Security concerns
While some tenants say that roaches and mice are still a problem, their biggest concern is the fear of gun violence at Parkway Gardens, which permeates life in the whole neighborhood.
The fear is so great the pastors at the New Beginnings Church, housed in a former roller rink just south of the low-rise housing development, say children often sprint to the programs they offer because they're afraid gunfire will break out.
"After youth group meetings, mothers call and say, 'I'm coming to pick up my kids. Please don't let them walk home,' " said James Owolabi, the youth pastor. "Some of the boys in our mentoring program told me they have nightmares of people chasing them with guns."
Kennedy said that property managers are continually assessing how they can strengthen security and adopting new measures. A new firm was brought in a few years back and a security command center was set up so camera footage could be monitored regularly and security redeployed as needed, he said. The management also is in regular contact with the police department, he added.
He declined to give specifics about how much is spent on security.
As far as Jermaine Holmes, 35, a Parkway Gardens resident, is concerned, a lot of the problems stem from former residents and other guests who bring crime to the community.
From a management perspective, "The only thing you can do is add guard booths and do random checks," Holmes said. He also thinks that residents could do more by discouraging visitors who loiter and engage in crime. "This community needs to take responsibility for itself."
Nonetheless, violent crime in and around the development remains a lightning rod for neighborhood fear and anger, much of it expressed privately for fear of gang retaliation.
"Sometimes it makes me feel hopeless, because who wants to live this close to Parkway Gardens?" said one retiree who owns a home near Parkway Gardens. "What law-abiding citizen wants to be subjected to that?"
acaputo@chicagotribune.com
kbergen@chicagotribune.com
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