City wins 1st round in suit against troubled landlord

Receiver will oversee 12 properties

The city has won the first round in its lawsuit against a landlord accused of turning a blind eye to drug dealing and prostitution at a dozen rental properties in Milwaukee.

A Milwaukee County Circuit Court judge granted the city’s request for a temporary injunction last week and ordered the appointment of a receiver to oversee properties owned by Kenneth D. Churchill III.

The city convinced the court there was “gross mismanagement” of Churchill’s 12 properties and a receiver would prevent further problems from occurring, said Heather Hough, an assistant city attorney.

When asked for comment when reached at his West Allis business, Churchill III Luxurious Limousine Service Inc., Churchill said, “I would love to, but because it is with attorneys and all that, I can’t.”

In its lawsuit filed in February, the city accused Churchill of accepting monthly cash payments to allow drug activity at the properties. The complaint also alleges he was involved in the “delivery, distribution, manufacture, sale, storage and possession” of controlled substances. Drugs linked to his properties include heroin, crack, cocaine and marijuana, officials said.

Two days after the lawsuit was filed, Churchill pleaded guilty in federal court to distributing heroin. The plea agreement, filed in U.S. District Court for the Eastern District of Wisconsin, said that Churchill sold heroin on seven occasions to undercover law enforcement agents between May and September 2015.

The temporary injunction means that Churchill has no authority to access the properties without permission of that receiver. It also means the receiver will be in charge of collecting rent and using the money to fix the properties, some of which have bedbugs, roaches and other serious problems, Hough said.

“The great news for the tenants that are in these properties — the good tenants — is that they’re also in charge of using those rent monies to bring them up to code,” Hough said.

The city sued in an effort to

force the sale of Churchill’s 12 properties, saying his “negligent rental and management practices are creating a public nuisance.”

The lawsuit asserts problems involving drugs and other crimes at Churchill’s properties have been going on for years. Evidence like hypodermic needles, tourniquets, metal pipes, clear glass tubes with crack cocaine residue and digital scales have been found at the rentals, the complaint said. Six of the 12 properties reportedly have received drug house designations by police, with two repeatedly getting the designation.

In January, police found 35 shell casings on the street in front of one of the properties, as well as bullet holes in the home, according to the complaint.

Around that time, a confidential informant

provided police with information that Churchill was aware drug activity was occurring at the properties and allowed it to continue if tenants gave him $1,000 monthly.

Hough said Churchill expressed a desire to sell his properties during the hearings on the case. The receiver would have to approve any property sales, and the proceeds could go to the city to reimburse the Milwaukee Police Department and to be used for anti-drug and gang activity.

Ald. Bob Donovan applauded the court’s decision.

The court victory shows what can happen “when neighbors come forward and work with police and city inspectors to combat nuisance properties,” Donovan said. “The neighbors were fed up and stepped up with cooperation and key information, and the landlord is getting shut down like a bad habit! This case should make bad landlords nervous, because the city could be working on a case against them soon.”