What makes the PPD in KW going Bad so weird is that it's a new Part of the City. KW isn't even finished being Built yet. It's the Part of the City where the Good People of Paragon have decided to Honor their most cherished Hero of all time, Statesman. One would think the Best of the Best PPD would be sent to watch over this City. It would be an honor to serve in KW. Having corruption already set in just feels off.
Having said all of this, The Zone was originally designed as a Co-op zone. What that was going to look like only those with access to the original notes have any idea. So maybe?
If I could make a suggestion: reduce the amount of "Bad Behavior" taking place on the Hero side and Island, and boost it up on the Villain side. This way you can still have the appearance of a nice low crime City area and still have a undesirable underbelly on what was supposed to be the Villain side of the map.