As South Shore residents were jolted awake in the middle of the night to a controversial federal raid on their apartment building, a nasty legal battle between the building’s owner and lender offers clues into how Chicago real estate turmoil escalated into a national news story.
Wells Fargo’s foreclosure lawsuit against the property’s landlord reveals that city officials were aware of serious problems with the complex well before the raid took place, but have shared nothing publicly about whether they had knowledge of federal agents’ plans ahead of time.
Chicago code inspectors visited the 130-unit asset at 7500 South South Shore Drive two weeks before it was subject to a massive Department of Homeland Security operation that led to dozens of arrests on Sept. 30, raising questions over what city officials knew about alleged illegal activity taking place in the building prior to the jarring raid.
The building’s owner, Wisconsin-based investor Trinity Flood, is currently facing a $27 million foreclosure lawsuit filed by Wells Fargo regarding missed loan payments on the property as well as several other properties in Chicago and across the U.S.
On Oct. 1, the day after the raid, a judge considered an emergency order requested by Wells Fargo to appoint Matthew Tarshis of Frontline Real Estate Partners as a receiver for the property. The judge determined a receiver would be determined at a later date. The decision came after two months of contentious back-and-forth between Flood and Wells Fargo.
Wells Fargo alleged that the bank was foreclosing on Trinity Flood not only because of missed loan payments but also due to the investor’s failure to insure the 7500 South South Shore Drive property. But Trinity Flood hit back, stating that the lender-placed insurance plan they ended up with was significantly more expensive than a prior plan the building held and was based on “inflated property values.” The landlord used the ongoing dispute over the insurance plan as reason to request that a judge not grant Wells Fargo’s emergency order for a receiver.
The same week that a judge was considering granting the emergency order for a receiver, the federal operation quickly garnered national attention. Residents in and around the building took photos and video of hundreds of government agents approaching the property, some from unmarked white vans and others from the back of rental trucks, photos show. Reporting from NewsNation, which was invited on the operation, states that agents descended from military helicopters, as well.
Witnesses told reporters on the scene that most, if not all, of the tenants, including children and U.S. citizens, were rounded up and detained temporarily outside of the building.
Customs and Border Protection, the ATF and the FBI were all involved in the operation, which resulted in the arrests of 37 people, according to the Department of Homeland Security. A statement from the agency noted a preliminary review of the operation found that the 37 people arrested were undocumented and that subjects were “believed to be involved in drug trafficking and distribution, weapons crimes, and immigration violators.”
Mayor Brandon Johnson and Alderman Gregory Mitchell, who represents the area, have not issued official statements about the raid, besides a reference Johnson made to the operation during a Friday press conference. They did not respond to multiple requests for comment.
“The South Side of Chicago is under siege with (President Trump’s) federal agents that are terrorizing our communities, where Black families are being awakened in the middle of the night with masked armed men with high power weapons in their face,” Johnson said.
Governor J.B. Pritzker denounced the operation on social media, sharing an article about it and writing, “ICE is running around Chicago harassing people for not being white. Just a year ago, that was illegal in the United States and now it’s commonplace. That’s not making America great again.”
But legal documents from the foreclosure lawsuit indicate that at least some government officials were well informed that the building was facing significant turmoil.
“The building is unsecured, which allows non-tenants to access the interior. There has also been increased criminal activity and shootings at the property, which is located across the street from an elementary school, and the current property manager is unable to ‘re-assert control over the building,’” a legal filing from Wells Fargo stated. “The City has received reports from (a) tenants’ rights group and the Alderman’s office that conditions continue to worsen at the property.”
It’s unclear whether city officials were aware that federal officials were plotting an operation at the property ahead of time or if they were involved at all in the effort.
Trinity Flood, attorneys for the landlord, Wells Fargo and representatives of Wells Fargo also did not respond to requests for comment.
John Warren, Chair of Squatters Legislation Task Force for Chicago landlord lobbying group Neighborhood Building Owners Alliance, said he hopes situations like this won’t escalate to such a scale in the future when a new Illinois law regarding squatters takes effect.
The law, which takes effect January 1, allows police to remove “squatters” from residential properties without a court-ordered eviction.
Meanwhile, the landlord group NBOA advises members to comply with lawfully issued warrants.
“Our housing providers will always respect a lawfully issued warrant and comply with their legal obligations,” said NBOA president Michael Glasser. “We want to cooperate with law enforcement in addressing criminal activity while upholding our fundamental responsibility to keep our tenants safe and secure, and to respect their privacy and their rights.”
The operation came as immigration enforcement is ramping up rapidly in Chicago, accompanied by protests both downtown and at an immigration detention center in Broadview.
On Friday alone, federal agents reportedly deployed tear gas on a residential street in Logan Square and handcuffed and threatened Humboldt Park-area Alderwoman Jessie Fuentes with arrest, Block Club Chicago reported. Fuentes said she heard the agents brought a suspect to the hospital after he fell while they were chasing him. She said they would not produce a warrant for the man or allow him to speak with attorneys.
Protestors have also been criticizing ICE for allegedly violating due process in its apprehension of subjects.
Guidance from the National Apartment Association notes that “renters and their families have a right to privacy and generally do not have to allow ICE into their homes.”
But it also goes on to clarify that ICE can receive criminal warrants from a judge in certain circumstances.
Editor’s note: this post has been updated to properly reflect that Matthew Tarshis was recommended to be a receiver for the property at 7500 South Shore Drive but a judge will determine whom to appoint at a later date.