A potential buyer has emerged for a troubled Near West Side affordable housing complex whose current owners were hauled into court by the city this spring for failing to maintain the property.
Chicago real estate investor Barry Chernawsky has signed a contract to buy St. Stephen’s Terrace Apartments at Western and Jackson from the partnership that currently owns it.
Chernawsky emphasized that he hasn’t closed on the deal-a 50-50 proposition, he described- that’s at least six months away. He declined to discuss details of the transaction, such as price.
“If we do get St. Stephen’s, we will correct the property. You have to get the OK by many people to buy this property,” he said. “Nobody wants to see it the way it is. Everybody would like to see this thing stabilized and become a nicer place to live, because the neighborhood is a nice place to live.”
St. Stephen’s comprises townhouses and three mid-rise buildings that sit behind metal fencing and cinderblock walls. The complex is on the southeast corner of Jackson and Western avenues. The U.S. Department of Housing and Urban Development subsidizes up to 70 percent of the rents for the majority of leaseholders there.
InterCoastal Group, a Los Angeles-based real estate firm, manages the day-to-day operations at St. Stephen’s and co-owns the complex with St. Stephen’s Terrace Corporation, a nonprofit formerly associated with St. Stephen’s AME Church.
Rev. Albert Tyson said no one at the church had been involved in the apartment complex since 1985. But after a February fire there displaced residents, the nonprofit board was recreated. Tyson is now serving as its chair.
“What sparked my involvement were two things: one was the condition of the Terrace and the unresponsiveness of management at that time to the needs of the people,” Tyson said.
The second issue, he explained, was the name: “I have not wanted the name of St. Stephen’s Church [tarnished] by the unresponsiveness of management at St. Stephen’s Terrace.”
The complex has deteriorated physically. It barely passed a HUD inspection in 2006. Residents have complained that the lack of maintenance resulted in broken fixtures, graffiti on the walls, vermin and roach infestations, and other problems.
In January and early February, city building inspectors combed through the property, marking 247 building code violations in 15 buildings; the violations form the basis of a receivership action currently winding its way through the Circuit Court of Cook County.
InterCoastal president Sheldon Berger said the firm has invested $360,000 in the property since the February fire, hired a new security firm, and brought in a new manager. He confirmed that a sale was possible but declined to discuss details.
Crime at the complex
In addition to the decay of buildings, security – including for drug dealing and violent incidents – has been an ongoing challenge. On July 17, at 12:20 a.m. a person got out of a car and opened fire from Van Buren Street into the property. Three teens standing in a parking lot were shot; all were treated at area hospitals. Police spokesman Robert Perez said the incident appeared to be a drive-by shooting.
Chernawsky declined to discuss details about the incident because his firm has not closed on the deal. He did say he’s experienced in rehabilitating troubled properties, including what was once “the biggest heroin complex in Chicago.”
He mentioned that his firm took over units on the West Side previously owned by longtime West Side developer Cecil Butler, who gained notoriety in 2004 for allowing the massive, HUD-subsidized Lawndale Restoration housing complex to fall into disrepair.
“This is my business … I make a living this way,” Chernawsky said. “Second, whatever I’ve done in the past was beneficial to the community it was in. I’m accepted by HUD already. That’s the most important thing.”
Ed Hinsberger, a director in the Chicago office of Housing and Urban Development, said the agency was looking forward to new ownership at St. Stephen’s. No residents would be displaced during the transfer, according to Hinsberger, and those whose units were made uninhabitable by the February fire would be brought back.
“It’s not a done deal. We’re probably at the early stages of that transfer,” he said. “The parties have agreed on their conditions. It’s now a matter of getting through the process.”
Regina Harlan, a hairstylist, was displaced from her unit at 2334 W. Jackson following the February blaze. She’s living in another subsidized unit near Western and Warren, and has only been able to keep up with St. Stephen’s news by visits there and status hearings in court.
Harlan isn’t sure she wants to return to the complex.
“If St. Stephen’s was what it was supposed to be, honestly I wouldn’t mind coming back,” she said, noting its proximity to public transit and new developments. “If it means going back to the same type of stuff of what’s going on right now – the gunshots, drug selling, the writing on the wall…the elevators that don’t work – that’s what’s discouraging.”
Michael Nagrant contributed to this report.