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The City of Chicago has brought a receivership action that could take St. Stephen’s out of the hands of InterCoastal, part-owner and manager at the affordable housing complex.

What is the future of St. Stephen’s?

For some residents who’ve lived through difficult conditions at St. Stephen’s Terrace Apartments, skepticism reigns when they talk about the future of the affordable housing complex. “The bottom line is it’s not going to exist,” said Regina Harlan, a 13-year resident.

Sheldon Berger, president of InterCoastal, the L.A.-based manager and part owner of the complex said InterCoastal wants to continue managing the property. Berger said it’s his goal find buyers for a new partnership that could apply to the state for tax credits to fix up the property, with InterCoastal sponsoring the effort.
“My preference is not for InterCoastal to walk away from the property,” he said.

Stephanie Dixon, who has lived in a fourth floor apartment in St. Stephen’s Terrace Apartments mid-rise for 10 years, can’t turn on the overhead light in her kitchen. It’s broken.

But even if the electricity worked correctly, she’s not sure she’d want to illuminate the space: the kitchen’s ceiling remains stained a sooty gray from a small grease fire a couple of years ago. Management at St. Stephen’s, an affordable housing complex of town homes and three mid-rise towers located at the southeast corner of Jackson and Western, never applied a new coat of paint, she said, despite her requests.

“As far as the upkeep of the property … they half patch it up,” said Dixon, who shares the unit with her two children and a younger sister, paying no rent for it because she’s currently unemployed.

Dixon has had problems with mice and roaches. She worries about her children’s safety when gang members sell drugs in her building, especially during evenings and weekends. People have set trash on fire in the garbage chute next to her unit when it gets clogged.

Garbage, in fact, was lit afire around 11 a.m. Feb. 16 in 2325 W. Jackson, Dixon’s building, and at 3:30 p.m. in 2334 W. Van Buren, an adjacent St. Stephen’s mid-rise. The latter fire displaced the building’s residents, who have been placed in other subsidized housing units.

Fire department spokesman Larry Langford said garbage chutes in both buildings were backed up with trash. He didn’t know why the fires started; the police department’s Bomb and Arson unit has no investigation into the fires, a spokesman said.

The fires, according to Ald. Bob Fioretti (2nd), served to accelerate an effort to address a series of physical and security issues at St. Stephen’s. In January and early February, city building inspectors combed through St. Stephen’s, marking 247 building code violations in 15 buildings.

Those violations, which cite everything from defective doors and out-of-date fire extinguishers to a failure to remove graffiti in the hallways and electrical and plumbing issues, form the basis of a receivership action the city brought against the owners and management of St. Stephen’s two weeks ago in Circuit Court. The city is claiming $117,000 a day in damages, the complaint says.

Representatives from InterCoastal Group, a Los Angeles-based real estate and property management firm which manages St. Stephen’s and owns it in partnership with a Chicago church, said they didn’t know the city had concerns until after the Feb. 16 fires.

Sheldon Berger, the firm’s president, said previous violation notices were being sent by the city to the title holder at the complex, which he said was a non-profit organization associated with St. Stephen’s A.M.E. Church, located in East Garfield Park. Rev. Albert Tyson could not be reached for comment.

Berger said the U.S. Department of Housing and Urban Affairs, which subsidizes up to 70 percent of the most St. Stephen’s residents’ rent, has always given his firm passing inspection scores. HUD considers InterCoastal as the owner and manager of the complex.

But the complex nearly failed an inspection a few years ago, scoring a 64 according to a HUD report released in 2006. A score below 60 would have forced HUD to consider terminating all housing subsidies at St. Stephen’s, Debbie Wills, a HUD spokeswoman, wrote in an e-mail.

HUD provided more than $2.1 million in rental assistance for most of the apartments on site at St. Stephen’s between Feb. 2008 and January of this year. InterCoastal and HUD inked another contract Feb. 28, 2009.

“HUD was giving us passing grades. The time I saw the property it looked adequate — it didn’t look beautiful, but it looked adequate,” Berger said. He said HUD’s passing scores lead him to believe nothing was out of order.

“Magically,” Berger said, the city found him when they wanted to send the complaint.

“It’s a bit of a mystery to me why I was only alerted to the severity of what they perceived as the problems so late,” he said.

When pressed about complaints of poor management and deteriorating conditions residents made to Chicago Journal Berger said residents and site management tend to become “natural enemies.” He said Denise McNabb, a regional manager for InterCoastal whose office is located at St. Stephen’s, seemed to be doing a good job.

McNabb, who is named in the complaint, did not return a call for comment.

Berger said his firm is rehabbing the empty 2334 W. Van Buren building and has hired new security.

But longtime residents are skeptical InterCoastal will deliver. The firm’s operations seemed to decline starting a couple of years ago, several told Chicago Journal.

“I’ve been hearing that for years … how it’s going to get better. It never gets done,” said Regina Harlan, a 13-year resident of the 2334 W. Van Buren building displaced by the Feb. 16 fire.

According to the city’s complaint, 11 units in Harlan’s old buliding had no smoke detector. Eight units had mice infestations. Eleven units had roaches. “Noxious odors” permeated the building, it says.

Harlan thinks InterCoastal is rehabbing her old building on the cheap. During a recent tour of 2334 W. Van Buren, some units were marked “No Work” on pieces of duct tape strung across the doors. Workers, some wearing asbestos masks, were busy renovating other units. Harlan wants her old apartment, which allows water to leak into it, fixed, and not just the fire-damaged units.

She scoffed at the notion that InterCoastal didn’t know about the housing complex’s many problems.

“They definitely did know. Why did they feel like they could get away with it?” she said. “I don’t know.”
Contact: mmaidenberg@chicagojournal.com

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