Court Appoints Receiver For Distressed Kenwood Apartment Building

This story was originally published by the Hyde Park Herald. Reprinted with permission.

After years of tenant outcry, the court has taken control of a troubled Kenwood apartment building and appointed a receiver to address persistent dirty and dangerous conditions.

On Friday, Jan. 12, Cook County Circuit Court Judge Lloyd Brooks ordered Apex Chicago IL, owner of the Ellis Lakeview Apartments, to hand over management responsibilities of the 105-unit property to a court-appointed receiver, Trigild IVL.

Brooks selected Trigild IVL, a commercial real estate firm that specializes in managing distressed properties like Ellis Lakeview, to fully address a host of its resident concerns and issues identified by a recent inspection of the property, ranging from pest infestations and garbage build-up to repeatedly broken elevators and poor access to hot water.

According to Block Club, 5T Management will stay on as the property manager, which a court had assigned back in 2022 to handle the building’s daily operations upon ousting Apex’s preferred manager. In addition to the eleven-story Ellis Lakeview tower, 4624 S. Ellis Ave., 5T operates four other large affordable apartment buildings on the city’s South Side, including two in Washington Park.

Brooks handed down his ruling amid a foreclosure effort by the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac. The ruling comes after several years of residents fighting for necessary repairs to be made, including past efforts to seize control of the property from the owner.

Tamashay Brown, a resident of the building for more than twenty years, said she and other tenants have been documenting issues for years to little avail. Feeling like tenants’ complaints went unheard, Brown said she has since deleted many of the photos of the problems she has witnessed at the property.

“I’ve shown up to every court appearance along with others to constantly plead with HUD, Freddie Mac, the city’s attorneys, FHFA and anyone else that would listen, so I’m glad we’ve made it this far,” she said.

Brown said she is cautiously optimistic about what the future holds for the building’s management. “It’s still a fight ahead for the new owners to do right and put the proper monies that should be spent inside the building,” she said. “We won’t settle for a slum lord at all.”

Attorneys for the U. S. Department of Housing and Urban Development and Freddie Mac, who were at the hearing on Friday, said that Apex had effectively given up on the property in recent months.

In 2022, the company avoided having the property put into receivership by agreeing to maintain a repair fund of $350,000 for the building’s maintenance. But, over the past several months the actual amount in the account has been far short of that requirement—only about $42,000—according to Freddie Mac attorney Shannon Condon.

Nonetheless, Apex was still receiving federal housing subsidies during that time, with the federal government contributing more than $240,000 in November and December to keep the building afloat.

But instead of paying 5T Management to maintain the property as required by the court order, Apex spent tens of thousands of dollars of public money paying its own affiliate companies and legal bills, Condon told the court.

Things got so bad that 5T Management signaled they would abandon the property if they were not paid promptly, which prompted the feds to intervene and pay the company directly for 5T to continue overseeing day-to-day operations at the building, Condon said. Freddie Mac was also forced to pay for the insurance and security at Ellis Lakeview, after Apex stopped paying those bills, she said.

And this came while Apex’s former manager for Ellis Lakeview, Boruch “Barry” Drillman, pled guilty to participating in a vast, multiyear real estate fraud with four other unnamed co-conspirators. All together, they fraudulently obtained more than $165 million in loans.

According to the Department of Justice, Drillman is scheduled to be sentenced in April and faces up to five years of time in prison. As of press time, the DOJ could not be reached for comment as to whether other people affiliated with Apex are among Drillman’s co-conspirators.

As Trigild IVL takes over as receiver, the federal government’s filing to foreclose on the property will still proceed. A separate city lawsuit against Apex that was launched in 2021 over code violations at the property will also go forward, with a hearing scheduled next week, Jan. 25.

Max Blaisdell is a fellow with the Invisible Institute and a staff writer for the Hyde Park Herald.