Art | Development | Housing | Pilsen

All in the Family

A battle over a Pilsen real estate empire highlights the neighborhood’s uncertain future

Julie Xu

This past fall, perceptive Chicago art lovers may have noticed the absence of one long-standing tradition: after forty-five years, the Pilsen East Artists’ Open House wasn’t happening.

Many of the neighborhood’s residents thought that the lack of an Open House—which has traditionally been a chance for the public to enter and explore the galleries, studios, and workspaces of the artists living in Pilsen’s Arts District, most of it centered around 18th Street and Halsted Street—might have had something to do with a recent change in management for many properties in the area: from Podmajersky Inc., run by John Podmajersky III, to PMI Properties, run by his sister Lisa Podmajersky. In a letter to her tenants on October 5 explaining the management change, Lisa wrote: “As most of you know, our management transition has involved a lot of work and person-power to complete. Hopefully most of you understand that because of this transition, we will not be holding the Open House on the properties we manage this year.”

The letter is an indirect acknowledgment of a strange lawsuit affecting East Pilsen over the last few years. At its core is a vitriolic set of court cases between John Podmajersky III and Lisa Podmajersky, the two members of the third generation of Pilsen’s Podmajersky dynasty that has done much, over the past several decades, to give East Pilsen its current reputation as an artists’ enclave. (Both Lisa Podmajersky and John Podmajersky III, through representatives, declined to comment for this story.) The spat follows a host of other factors that have changed the face of Pilsen over the last few decades. Development by UIC has encroached from the north; rising rents have threatened to drive out artists, galleries, and many long-time Latinx residents; and several stalled, failed, and vacant development projects have appeared in an area that has been described for twenty years as some variant of “up and coming.” East Pilsen has seen a lack of consistent visitors to the neighborhood outside the flagship Second Friday events (monthly receptions by galleries and studios along South Halsted). The dwindling traffic, in combination with higher rents, mean that there are fewer artists and galleries in the neighborhood than twenty, ten, or even five years ago. Pilsen’s artist class—until recently a gentrifying force that helped push out many of the neighborhood’s blue collar, Mexican residents—now faces an ousting of its own.

The Podmajersky lawsuit is both personal and inscrutable compared with these larger economic and political currents, but it’s another reminder of the uncertainty that animates an ever-changing neighborhood. It’s also a reminder that this uncertainty cuts both ways: the ownership change has fueled fears of creative decay, but also engendered hope that Chicago’s unofficial arts district can still come to flourish.

In 1914, John and Elizabeth Podmajersky, Slovakian immigrants, moved to Pilsen and started a dairy. When business declined, they moved into real estate, buying up some property in the neighborhood. The Podmajerskys’ son, John Jr., along with his wife Annelies, increased the family’s holdings. He acquired a number of lofts with the aim of advertising them to artists in order to create an artists’ colony, replete with charming alleyways and cozy communal gardens. “John Jr. thought of it as a new Prague, a new Bohemia,” said Daniel Barber, a painter who lived in the area from the early 1980s until the 2000s.

Former residents’ accounts of John Jr. give the sense that he was gruff, brisk, and businesslike, though not without some charm; Barber described him as having a “typical cantankerous way.” Gary Justis, a sculptor who lived in the area from the late 1970s until the early 1990s, said that certain residents sensed that he was hostile: “They assumed he was rich, which he never was,” he said. “He was connected, with good credit. And committed to improving the neighborhood.”

This commitment to improving the neighborhood manifested itself in different ways. In the mornings and on weekends, John Jr. would walk around picking trash off the streets, said Barber. But both he and Justis remember that there was a slow creep toward gentrification even when they lived there, one subtly abetted by the Podmajerskys. “Retail was just starting, and a cafe had come in,” said Barber. “There were a lot of local Mexican-American shops. But I think John did not want them there.” Of course, some attempts at beautification were less successful than others: Barber recalls that when the second Mayor Daley attempted to plant rows of trees along the streets, one neighborhood teenager biked along a row of them with a machete, slicing off their branches.

Alicia Gonzalez, daughter of Mexican-American artist-activist and longtime Pilsen resident Jose Gonzalez, remembers John Jr. raising the rent on the building her father rented until he had to move out: “We lived at 567 West 18th Street,” she said. “That was my first memory of living in Pilsen. That was my dad’s first place…And that was a pretty big artists’ loft. A big, huge studio.”

“My dad didn’t make very much money at all, he was busy promoting other artists,” said Gonzalez. “[Podmajersky] was catering to certain artists, not necessarily my dad. The studio we did have, there was a moment when I was a little girl, where the roof caved in where I slept. The maintenance of the building wasn’t always great.”

Gonzalez says that she and her dad were quick-moving tenants after leaving the Podmajersky building, slowly making their way further west into the less-developed and cheaper West Pilsen. But she remembers walking by her first home a few years later on her way to church and noticing that the windows had been redone.

“It’s funny that it was the window, but it was powerful. It was one of these icy cool windows,” she said. “It had beautiful glass windows. As a kid, I was just very cognizant of that [they] were never there when we lived there. Clearly there was much more investment in catering to a specific kind of artist.”

While they worked on the business, John Jr. and Annelies also had two children, John III and Lisa. Lisa left Chicago in 1980 to attend college at the University of Vermont. While there, she and Annelies were interviewed for a New York Times article about students reluctant to head home to their families during school holidays. “Vacations can be tense,” Lisa said in the article. “Parents try to do a lot of parenting that they don’t do the rest of the year, and they are frightened by the loss of control.” After finishing school in Vermont, she moved to Colorado, where she would live for the next twenty-plus years.

Meanwhile, John III went to school at the University of Chicago and began to work for his family’s real estate business in the eighties. According to public deed records, he also began his own company, Podmajersky Inc., in the mid-nineties to manage the holdings he had been acquiring since the previous decade. His control over the management aspect of his parents’ real estate holdings increased until 2003, when he completely took over the company’s day-to-day operations. A 2004 conceptual plan for John Jr. and Annelies, put together by their estate planning attorney and included in court documents, suggests that the family’s goal at the time was that John III would own the properties upon his parents’ death; the plan also warned that if the pair did not act quickly, “your legacy that you have spent a lifetime building (the artist colony in Pilsen) will be dissipated and Johnny will not have his opportunity.”

Lisa returned to Chicago just as her parents’ health was declining. This is where the story gets murkier, or at least contentious: in July of 2012, Annelies and John Jr. filed a lawsuit against their son alleging that he had misinformed his parents about the nature and extent of his financial control over their properties through Podmajersky, Inc. For instance, the lawsuit claimed that John and Annelies initially believed John’s annual salary was only $100,000, but an additional management fee earned him “considerably more.” The pair sought to remove their son as property manager for the Podmajersky properties in Pilsen.

During the course of the litigation, both Annelies and John died—Annelies in late September of 2013, John in October of 2014. John had modified his will to make Lisa the owner, both directly and through various limited partnerships and corporations, of all of the couple’s properties in Pilsen. After Annelies’s death, John III filed a counter-claim to his parents’ initial lawsuit, alleging that Lisa came back in order to manipulate her ill parents to cut him out of their wills and to wrest the management of the Podmajersky properties out of his hands. Among other things, the lawsuit claims that Lisa changed the locks to their parents’ condo after learning John III had keys to the building, and that she denied John the opportunity to visit Annelies at her hospital bed.

But despite John III’s attempts to nullify the revised will, a court order in February of 2016, enforced that summer, required him to turn over management of the properties to PMI, a new company owned and operated by Lisa. This meant that the more than one hundred properties owned by the Podmajersky family, many of them along the neighborhood’s traditional arts corridor centered around Halsted and 18th Street, would come under new management. Because of his own earlier acquisitions, John III still owns around thirty-five properties in the area; at least some of these properties, such as Fountainhead Lofts, are managed through his Podmajersky, Inc.

When PMI announced that it was taking over management of most of the properties around the neighborhood’s established art corridor, the reaction from residents was uneasy. “In the beginning it was a little scary, just because as business owners we don’t know, are we going to be moving?” said Delilah Martinez, owner of VIP Paints, which hosts arts classes. “Are they going to shut it down? Are they selling to some bigwig? We were all a little scared. It did bring us all a little closer too, because we didn’t know what their next move was.”

Martinez, however, says she’s been happy with life under PMI.

“I’ve had the pleasure of meeting Lisa, and she’s amazing,” she said. “She definitely is about keeping the artists and businesses going, making sure all the stores get filled, and meeting our needs, because there’s a lot of things that we need to upgrade. Sometimes a lot of owners don’t want to do that for us, but I get the sense she definitely wants to.”

Other residents, though, are less satisfied.

“It took about a month before they started really communicating with us,” said Allen Vandever, an artist who lives just off Halsted on 18th Street. “One of the nice things about when it was just Pod, everything was always kept very clean. The yard work was always done very timely.”

Pointing out to his front gate, he added, “There’s a lot of garbage lying around. Never would have happened under Podmajersky. In the beginning I was trying to give them time to catch up…I’m hoping they have it all straightened up by next year.” Vandever said he was also disappointed by the lack of an Open House, as well as by the disappearance of art installations from vacant storefronts, but noted that PMI had pledged to improve outcomes for artists. “They sent us one email from the daughter saying she wanted to bring it back to how her father had it, and I’d heard a lot of people complaining about what the son had done with it, definitely made it more corporate,” he said.

The switch in management also caused at least one business in the area to leave. Katrell Mendenhall-Hall, who owns a modeling agency now headquartered at 14th Street and Michigan Avenue, noted that she felt uncertain about the future of the area after the management transition.

“Honestly, the way the transition was done, everyone was caught off-guard, so it made me feel uneasy,” she said. “Even though I’ve had nothing but great experiences with PMI. Everyone’s been as helpful as they can be, but you can tell there was some disorganization. It doesn’t make us as business owners, people that live there, comfortable within the first four to six months. The transition could have been more comfortable for us.”

But there are bigger issues for artists in Pilsen, beyond the problems of daily property management. Most notable is the high turnover rate of artists and galleries, which has left behind a string of vacant storefronts along Halsted. One cause of this turnover seems to be rising rent: according to City Notes, 2014 rents on the Lower West Side had increased by sixty percent since 2000, though much of that increase appears to have taken place before 2010. Vandever says that in four years under Podmajersky Inc., his own rent rose from $900 to $1200 a month. Given that he and his wife, a singer, had what they called a “down year” in 2016, he’s worried about his ability to sustain himself.

The neighborhood has also failed to attract the kind of audience some artists have hoped for. Bridget Bolger used to own the South Halsted Gallery, located on 18th and Halsted. In a skeptical article titled “Pilsen’s Ailing Arts District,” she told the Reader that when she and her husband, Scott Multer, moved into the area in 2009, she thought visits to the neighborhood would begin to pick up. A couple of years later, she moved. “There weren’t that many artists on my side of the street,” she said in an interview with the Weekly. “Slowly but surely they started moving out, because the exposure wasn’t happening in the area anymore. Of course, we had Second Fridays, but after a while it’s just kind of a party crowd.” Apart from the lack of visitors—she noted there was no foot traffic during the day, and hardly any on a night that wasn’t a Second Friday—Bolger also remarked, like Vandever, that rent had gone up for her and the residents she knew. “I think we were the last wave of artists there. I really do,” she added.

It’s not apparent, either, that the empty storefronts left behind by relocated artists will necessarily be filled with new galleries. Most of the vacant windows along Halsted are emblazoned with a sign from the Kudan Group, a real estate consultant, which, on its website, lists ten East Pilsen properties available to rent for “loft storefronts, creative offices and production uses.” The future East Pilsen, then, may look less like a group of free-spirited bohemians making art and more like a group of creative businesses such as Martinez’s arts classes or Mashallah Ghouleh’s jewelry store.

Filling up its empty space is not the only impediment PMI faces if it hopes to re-emphasize arts programming in the neighborhood. The Chicago Arts District, which organizes both Second Fridays and the annual Open House, is run by Cynthia West, who is John III’s wife. The organization is funded by John III’s Podmajersky, Inc., and the latest Second Friday featured the company as a prominent sponsor. During the course of the lawsuit, one document filed in 2012 by John III and his lawyers claimed that “the use of Chicago Arts District, a valuable marketing tool where plaintiffs’ properties are located cannot be used by plaintiffs if Podmajersky, Inc. management is cancelled.” Though management of the properties has been transferred already, it’s not clear what will happen to arts programming in the neighborhood if the case is ultimately settled in Lisa’s favor—whether the Chicago Arts District will continue to operate, and if so, how closely they’ll work with PMI. Cynthia West and the Chicago Arts District did not respond to repeated requests for comments on this story.

If artists truly are on their way out of East Pilsen, their enduring legacy won’t just consist of abandoned galleries and quaint gardens, but also of the part they played in the gentrification of the area. As a 2016 report from UIC notes, Pilsen’s “redevelopment was spearheaded by a White artist enclave and consolidated progressively into a predominately White version of gentrification.” The steady departure of Latinx people like Alicia and Jose Gonzalez operated in tandem with a steep rise in the price of property: from 1990 to 2000, the census tract that holds part of the artist colony saw a 548 percent increase in owner-occupied housing values. And Pilsen’s appeal has undeniably been augmented by the aura of artsiness that hangs over it now. “When I was growing up, I went to private school in Lincoln Park. None of my friends would ever have gone to Pilsen. But now a lot of people live there,” said Alicia Gonzalez. “We have friends now that are like, ‘We’re going to Pilsen to hang out!’”

The offices of PMI and Podmajersky, Inc. now sit about a half block apart from each other on opposite sides of Halsted, a visual metaphor that’s perhaps a bit too perfect. The case itself drags on: the next court date is set for the middle of May. In light of the larger changes taking place in the area, a familial spat between Pilsen real estate royalty is relatively unimportant, but it is an indication of how precarious the neighborhood’s position seems to be at the moment. Pilsen is balanced between remaining an artists’ enclave and going the way of the North Side’s Wicker Park and Manhattan’s SoHo, where a process of gentrification started by artists—pushing out industrial workers and ethnic minorities—ends with the artists’ own displacement, and the transformation of the entire area into something more vaguely upscale and expensive.

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