Chicago police said they were responding to an incident in the West Humboldt Park neighborhood's 4100 block of West Chicago Avenue just after 11 a.m.
While officials have not shared much info, they believe the man is armed with several weapons and a blow torch.
Police said they have blocked traffic from a six-block radius around the incident. They did not say when roads would reopen.
Chantal Robinson was on edge as she picked her kids up from school.
"It is crazy. When they called me, I thought something had happened to them," she said.
The man is known to some residents of West Humboldt Park.
"If he likes you, he talks to your or whatever, he's the kind of guy that will give you the shirt off his back," said Gregory Wynne, neighbor.
Video from Chopper 7HD shows the scaffolding the man is using to display an anti-Semitic sign, the Chicago flag, the Ukrainian flag, and an upside down American flag which is a universal sign of distress. He also appears to have a blow torch.
"He is on a loud speaker speaking anti-Semitic things. He's always playing anti-Semitic music," said resident Eric McNeil.
Frustrated residents and community groups said they have warned city officials and CPD about the dangerous situation, only to have it happen again.
"It's been three different times," said Titus Washington, who works in the neighborhood. "I've been working here eight months and on three different occasions they have this whole block cut off because of him."
As the situation continues there's basically gridlock in this area as police have shut off several blocks west of Pulaski along Chicago Avenue. They are also asking people to stay clear of the area if possible as negotiations with the man continue.
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