The Lost Dream of Obam-a-Lago

A few weeks before the 2016 election, Chicago Tribune sportswriter Teddy Greenstein—now a DraftKings executive, naturally—broke some tantalizing news: Tiger Woods was this close to signing a deal to design a luxury lakefront golf course right next to the site President Barack Obama had chosen for his new presidential library. The $30 million project would convert two existing public golf courses into one ritzier and more challenging PGA-caliber one, which would woo away bankers and Boeing executives from the suburban courses with the irresistible buzz of the Obama “brand,” which at the time boosters were counting on to revolutionize the presidential library genre into a full-blown Destination, a temple to the lame-duck president’s achievements, real and imagined.

Nearly a decade later, the Tiger Woods golf course is almost certainly not happening, the Obama Presidential Center (the Obama Foundation decided to skip the library altogether and store the presidential archives in a suburban office park ten miles away, for some reason) is five years late, and the area on the South Shore of Lake Michigan is in the news again for having been the site of a traumatic ICE invasion, featuring a reported 300 federal agents descending upon a residential apartment building from Black Hawk helicopters and unmarked vans, smashing in windows, jimmying doors off the hinges, and zip-tying everyone in sight, immigration status be damned.

Maureen Tkacik: How a Colorado slumlord’s psyop turned into a brand-new “forever war” on Venezuela

But long before ICE blew in, the South Shore neighborhood had been ravaged by a series of sprawling apartment building pump-and-dump schemes, aided and abetted by industrial-scale mortgage fraud, old-fashioned government inaction, and, in recent years, a smattering of Venezuelan gangsters the law enforcement establishment seems as ill-equipped to prosecute as it is to police the various machinations that hollowed out the housing stock. For the residents of Chicago’s South Shore, the ICE raids are not so much shock treatment as they are an uneasy new phase of a longer campaign of elite demolition of lower-class Chicago. “At the end of the day, they devalue our property with violence. They allow this shit to happen … so they can take our houses,” said one lifelong South Shore resident who lives across the street from the raided building. He described witnessing the raid and declined to give his name due to fear of retaliation.

No one in the neighborhood blames the Venezuelans, whom the real estate speculators moved in to many of their most troubled buildings when the city introduced a short-lived housing voucher program, even though most everyone understands that some of them are not good people. “If we didn’t welcome them with open arms, there would be a bloodbath in our community,” the same across-the-street neighbor said.

More from Maureen Tkacik | Emma Janssen

The biggest scam in recent years, a $170 million “nonprofit” called the Better Housing Foundation, launched around the same time the Obama library was announced, and imploded two years later after 64 of its 81 buildings, which included a high-rise two blocks down from the ICE raid at 7500 S. South Shore Drive, fell into such dire disrepair that the Chicago Housing Authority placed them on a blacklist for housing voucher recipients. Near simultaneously, a Florida-based enterprise called EquityBuild that had purchased nearly 200 buildings in the area sent thousands of investors an email advising them not to panic that their funds had been frozen, because “projects such as the Obama Library and the Jackson Park golf course … have helped drive values faster than we had predicted.” But EquityBuild founder Jerome Cohen wasn’t waiting around for prices to appreciate. He was fleeing to Israel—just as EquityBuild’s former general counsel Gordon Hirsch had tried to warn the FBI he would in five notes he wrote detailing the scheme before he died by suicide.

“Call the FBI Mortgage Fraud Unit. Tell them that EquityBuild, Inc. is a Ponzi scheme [that] is run by Jerry Cohen [in] Marco Island, Florida,” one note reads. “They buy the property + resell it the same day for a lot more money, add rehab costs, Shaun as lender sends investor $ to Jerry. So Shaun is using investor $ to buy + rehab properties owned by his father Jerry. Crazy mortgages are put on the property & EquityBuild abandons them …”

The notes, written back in 2012, further instructed their readers to urge the FBI to act quickly. “They will flee,” Hirsch warned on a Post-it note. Cohen had been arrested under Florida’s “Fugitive from Justice” statute in late 1993 amid a tornado of lawsuits and state investigations into a low-income rental empire he ran in Philadelphia with a cousin. As the rental empire collapsed, Cohen relocated to Florida and launched a business called Offshore Corporate Consultants, Ltd., specializing in “asset protection” and “privacy structures,” while his wife continued to call tenants demanding rent checks.

But the FBI didn’t act quickly, or, ultimately, at all. More than 900 investors lured in, in part, by late-night infomercials featuring William Shatner lost a combined $130 million before the SEC stepped in to shut down the Ponzi scheme in 2018, by which point Jerry and his wife were already in Israel. “They hated Chicago,” remembers Dave Marcus, a New Yorker who invested $1.3 million in EquityBuild in October 2016, of the Cohens, who commuted between Manhattan and Marco Island when in the country. “But obviously they knew that Chicago was a great place to do slimy things.” (Cohen is now dead, having never returned to the U.S.)

Somehow the family escaped indictment altogether, as did their lieutenants, including Tyler DeRoo, who had pocketed $1.17 million in salary and commissions during his years at EquityBuild, according to a lawsuit later filed by the court-appointed receiver. (DeRoo settled the lawsuit but has been sued for failing to make one of the payments.) DeRoo stayed right where he was. The implosions of EquityBuild and Better Housing had dumped thousands of South Shore apartments on the market all at once, but valuations were about to come roaring back as middle-class and moderately affluent investors across the country began plowing funds into an unprecedented apartment building bubble during the pandemic. By the end of 2021, nearly 20 former EquityBuild properties had already been flipped to new owners for a handsome return; an analysis of 27 transactions found that the average building in the bankruptcy portfolio had fetched a 101 percent return over a holding period of about a year and a half.

Along with a couple of partners, DeRoo spent $32 million on iffy South Shore property during the pandemic. One of his purchases, a 70-unit building at 74th and Phillips Avenue, was a particularly dubious bet at $5.5 million, with a mere 4.5 percent down payment. The previous owners had been sued by the city over building code violations with a mortgage of just over $3 million. But the timing was somewhat fortuitous: A tidal wave of Venezuelan migrants was about to descend upon Chicago, the product of Republican Texas Gov. Greg Abbott’s effort to export the chaos of border towns to hated blue cities.

With that chaos would come contractor gravy trains on both sides of the journey. The bus operators that raked in $55,500 a pop—or $1,246 a head—busing Venezuelans to Chicago, Denver, and the coasts; the massive shelter operators Equitable Social Solutions and Favorite Healthcare Staffing raked in roughly a half billion dollars shamelessly overbilling the city. Landlords who stepped up to offer longer-term housing to migrants were offered as much as $15,000 per household for six months, or more than twice the compensation for the average Section 8 recipient. The program also had far fewer strings attached than established housing assistance programs; landlords were encouraged to participate even if their units weren’t entirely ready for prime time.

DeRoo appears to have taken the city up on the offer. By 2024, the 74th and Phillips building was teeming with Venezuelans, and building code violations. A city-issued citation cited DeRoo’s company for harboring a roach infestation, an “accumulation of refuse,” broken or defective window panes, holes and large cracks in interior walls, broken exterior walls, a “defective floor,” defective and improperly installed smoke detectors, defective or missing door hardware, and the absence of clearly marked street address and exit signs. Another citation a few months later ordered the company to hire a licensed plumber to fix leaking water. In early November of last year, DeRoo’s company was served with a foreclosure notice from the city for code violations. (The code violations were later resolved, but the complex is now in the hands of a receiver.)

Then, early on the morning of November 22, a 28-year-old named Eulices Wladimir Bolivar-Moreno was found shot to death in the hallway of the building and pronounced dead at a nearby hospital. Bolivar-Moreno had been arrested a month earlier for aggravated possession of a loaded and unlicensed weapon. Just a few weeks later, a woman called 911 to report her boyfriend had been shot, and a 24-year-old man was found dead in an apartment on the building’s fourth floor. A Facebook page called Substance News reported that the man’s body was found lying next to a rifle and that the murder was believed to be related to a Tren de Aragua turf war. A few days later, a phalanx of cops and social workers arrived and abruptly evicted—or “evacuated,” in the words of city officials—the entire building just two days before Christmas, a decision WGN News reported had been made by the city building department.

“Too many occupants moved into the building, creating deplorable conditions” and causing “serious issues” over the past month, was the official reasoning for the eviction, according to a statement issued by the Salvation Army. Neither the statement nor the news report mentioned the murders or three aggravated assaults, including two shootings. One of the evictees told the news he had just paid $1,200 to cover a month’s rent ten days earlier.

That’s when, residents say, a busload of Venezuelan migrants ended up at 7500 S. South Shore Drive, a U-shaped mid-rise postwar building of 125 apartments that until a week or so ago was bedecked with a faded banner boasting LUXURY WATERFRONT APARTMENTS.

Like the Phillips Avenue building, 7500 S. South Shore had been flipped in early 2020, not far from the peak of the great multifamily bubble. The transaction was brokered by the Kiser Group, a commercial real estate brokerage whose South Shore specialist partner Noah Birk has sold more apartment buildings than any other broker in Chicago. But the building had an even longer history of landlord extraction and disrepair, having failed its annual inspection 14 years in a row since it was owned by the notorious Chicago slumlord Mark Fishman, who had taken out an eye-popping $14 million mortgage on the property with Cole Taylor Bank back in 2006 before disposing of the property for just $5.5 million in 2018 to a New York developer called DAX Real Estate.

When DAX put the building up for sale less than two years later, they quickly landed on an ideal buyer in Trinity Flood, a low-key investor based in Fond du Lac, Wisconsin, who was on a very tight deadline to close a sale because she was looking to take advantage of a tax break known as a “1031 exchange.” When she agreed to a price that doubled DAX’s money, a Kiser Group press release touted the transaction’s “record-breaking” $88,000-per-unit valuation.

But by the summer of 2020, Flood had buyer’s remorse, alleging in a lawsuit that both DAX and Kiser had misrepresented the scope of the building’s renovations and the magnitude of its maintenance costs to close the deal at an inflated valuation. Crucially, she alleged, DAX had refused to let her tour more than two apartments and failed to inform her that the building required a 24-hour security guard that cost $15,000 a month. Neither Trinity Flood nor Kiser Group returned messages left by the Prospect.

A May 2020 review on ApartmentRatings.com also accused management of filling apartments with residents of mental institutions, recently released prison inmates, and sex workers; failing to fix the elevator or shovel snow; and refusing to respond to resident complaints. “7500 is a heroin house,” the reviewer declared. And it was not about to get better.

Flood then attempted to haggle with Wells Fargo, the bank that owned the mortgage on the property. (Perhaps notably, Wells Fargo had also been a favored bank of Jerome Cohen and his son, Shaun Cohen; the bank ultimately agreed to pay $3.75 million for its role perpetuating the EquityBuild Ponzi scheme.) She asked for a $3 million modification of the mortgage balance in order to make the expenditures necessary to maintain the building’s value; the bank refused.

In 2024, the city sued Flood and the bank over the mountain of code violations the property had amassed, and the bank launched the foreclosure process by transferring the loan’s servicing to an aggressive “special situations” servicer owned by private equity behemoth KKR, even though she was still making payments on the loan. (The lender claimed Flood had not maintained adequate insurance on the property; Flood said the insurance requirements of the loan were based on a fraudulently inflated valuation.)

Around this time, a property management company called Strength In Management, or SIM, assumed control—or lack thereof—of the building. Its owner, Corey Oliver, is one of just a handful of board members on the political action committee of the Neighborhood Building Owners Alliance, the local landlord lobby. He was also a heavy user of the state’s migrant rental assistance program: A July 2024 Chicago Tribune story reported that Oliver had already made some $560,000 in revenue housing more than 50 migrant families in his buildings; he did not return a message left at SIM headquarters.

In news reports on the recent raid, tenants have blamed SIM for making a bad living situation even worse. The company ramped up evictions while failing to fix the elevator or the plumbing, broken doors, or trash-strewn hallways; an online review of 7500 S. South Shore reports that SIM management had invited tenants who paid their rent on time to move to a building three blocks away owned by Oliver’s father, further degrading conditions at 7500.

It’s a familiar pattern in South Shore, according to Erick Johnson, a reporter at The Chicago Crusader who used to live in a building on South Paxton Avenue owned by EquityBuild’s Tyler DeRoo. At first, he says, it was ideal; a generously sized studio for less than $700 a month. Then the pipes began to fail, and the landlord moved him to a bigger apartment on a different floor. Then DeRoo sold his holdings on South Paxton to another alleged “Ponzi-like scheme” called CKO Real Estate, this one operated by Chikoo Patel, with financing from a (now-estranged) Boca Raton–based investor named Shai Wolkowicki, and pretty soon he was finding himself without hot water once a week or so.

A property manager finally leveled with Johnson. With just four tenants left in the building, Patel wasn’t inclined to pay the outstanding utility bills; perhaps he’d like to move to another of the company’s buildings? Johnson started digging around, soon discovering that CKO had quietly racked up at least $20 million in debt buying dozens of buildings, including 26 in South Shore. But while Patel had amassed a fleet of luxury cars and a $63,000 unpaid American Express bill, tenants were struggling with exploding pipes and black mold, rodent infestations, freezing-cold showers, and in a few buildings, no heat or electricity whatsoever.

“I was talking to a retired postal worker in one of these buildings, and he told me he was going to the library to charge his phone because he had no electricity,” Johnson said. “We have seniors living in third-world conditions down here, and the city knows full well what is going on because they get 311 calls all day about it, and they’ve chosen to do nothing, and what they have done took months.”

Hearing fellow CKO tenants’ stories, Johnson began to realize his cold showers were just the first phase of slumlord hell. “Eventually, these buildings start to go to squatters, and you can tell because you’ll see extension cords all over the lobby, plugged into whatever outlet still works.” 7500 S. South Shore Drive was headed in that direction. During the nine months between Christmas and the ICE raid, the police recorded more than 50 crimes there, including eight burglaries, a handful of shootings and stabbings, and then, in June, the astonishing murder of Gregori Arias, a 32-year-old from Caracas who had launched a pop-up barber shop in a downtown park shortly after he arrived in Chicago in 2023.

The details of Arias’s murder are hazy, but what has been established is this: He was dragged from an apartment and shot first in the chest by an unknown assailant, then a second time in the head by a 25-year-old serial deportee named Jose Javier Coronado Meza. The murder happened during a scheduled building inspection by the Chicago Housing Department, whose staffers fled the scene and flatly refused to return to the complex. Arias’s killers and witnesses also fled the scene when they heard police sirens responding to the crime, and yet Chicago Police Department officers did not venture inside the building until a witness officially reported the crime the next day, by which point the crime scene had been meticulously cleaned up and Arias’s body had disappeared. It did not end up impeding the investigation too much: Detectives used BlueStar technology to detect traces of his blood beneath the laminate flooring, then matched the DNA with that on his toothbrush. Meza was detained on weapons charges and allegedly blabbed to a cellmate about burying Arias’s body in a random concrete slab on a construction site.

When the Prospect visited 7500 S. South Shore Drive the week after the raid, the building was abuzz with workers. Three security guards were manning the entrances, and two men who appeared to be janitors were taking a smoke break from what looked and smelled like a challenging cleaning job; city cops wearing bulletproof vests identifying themselves as members of the “Department of Counterterrorism” and Department of Buildings bureaucrats shuffled in and out. It was a scene you might have expected following a horrific crime, as opposed to a horrific law enforcement raid apparently triggered by a crime three and a half months earlier. It was difficult to shake the knowledge that back in ordinary times, the CPD had apparently failed to so much as enter the building directly following an execution-style murder that occurred while city workers were inspecting the building, or that said inspectors had subsequently refused to enter the building for fear of their own safety.

For all the horror its residents had endured during the raid, the truth was that 7500 S. South Shore could be a horrible place to live. “It was a nasty mess before ICE came,” a longtime resident named Cassandra Murray told the Chicago Sun-Times. “So don’t nobody keep putting that shit on ICE, because that was not ICE.” Nor was it, she clarified, the migrants. “This building was a mess before the Venezuelans, when the Venezuelans [arrived] and since they’ve been gone.”

Many Chicagoans feel the same way about their city. “This is a city that is constantly displacing its elders to make way for insiders,” says Zoe Leigh, a Chicago native who founded a pro-Trump group called Chicago Flips Red after her mother’s building was abruptly demolished by the city with no notice, in a weird chain of events she suspects to have been motivated by a politically connected developer.

Leigh is forthright: She is not particularly MAGA and she is almost wholly motivated by spite toward the Chicago political elite, and the Obama Presidential Center’s 99-year, $10 lease with the city of Chicago—along with its ugly “climbing wall” aesthetic—exemplifies everything she despises about the town’s “one-party rule.” Last November, Leigh learned she was not alone when Trump nearly doubled his 2020 vote count in Chicago, despite an unprecedented drop-off in voter turnout. The influx of Venezuelans is a big reason for that, says Johnson of the Chicago Crusader, who has contrasted the city’s shoddy treatment of Black tenants with the $640 million it has spent on migrant lodgings.

But the barbarism of the ICE invasion quickly squandered whatever goodwill Trump might have enjoyed in the Windy City, says the Rev. Michael Pfleger, a celebrity pastor of sorts who helms Saint Sabina Church, a Catholic parish a few miles directly west of South Shore, where a Palestinian flag hangs not far from the crucifix and the American flag outside the church hangs upside down in opposition to what he terms Trump’s “Make America White Again” agenda.

“What can you even say about Kristi Noem, Stephen Miller, Pam Bondi? They’re wicked, wicked people. And I think everyone in this town understands they are trying to provoke a confrontation that will give them the pretext to declare martial law,” Pfleger told the Prospect. “But while all this turmoil is going on, don’t lose sight—what we had before wasn’t good either. Chuck Schumer and Hakeem Jeffries are not going to save us. We don’t want to be merely better than them. We want what’s right. We need our own Project 2025.”