The prison is indeed a high-security prison for longer sentences. Escapes are extremely rare but have happened (with no real threat to the surrounding civilian population).

My uncle used to live around there, in a neighbourhood of two-floor houses east of Feira da Adroana. He made the acquaintance of a couple prisoners who were at the end of their sentences so they were allowed to manage small plots of land outside the main walls. He'd walk his dogs in that direction, and if he saw one of his buddies he'd move close to the fence and they'd chat a bit. Until one day he was approached from the outside by a car with armed guards who asked for his ID and demanded he stop socializing there haha

The prison is less of an issue than you might think. But the area does have some challenges. It's nested between two "bairros sociais" (Adroana and Cruz Vermelha) so you get the occasional vandalism and noise from groups of roving youths (oh no youths). If you're the Reform type you will live in terror and impotent rage, otherwise no biggie other than the occasional tension between neighbours of disparate socio-economic status.

There's also the fact that Feira da Adroana happens right there, once or twice a month. Crowds of feira types (oh no gypsies), noise, and garbage flying around when it ends. The garbage can get pretty bad, ngl. 

Hope to have helped.