Op, I have been in an almost identical situation, even down to the issues around race being flagged by someone in HR as in needing to tread carefully (this employee was of a different ethnic background to most in the office, the only one, but that had nothing to do with how he was being treated).
The workplace you describe sounds extremely unprofessional and/or inept.
Frankly after a year of suffering in your position, I went on annual leave for two weeks, and this person had to report into MY manager.
The day I got back,I was immediately called to agree to a plan to get rid of this person. My boss was at the end of his tether, absolutely livid about this employee's attitude, crap work, etc.
Funny that, because my boss had been no support and resisted my suggestions to put a performance management plan in place... Yet 3 days of managing this employee themselves, they couldn't cope 
It was one of the final straws , I quit about 3 months later. No one was protecting my mental health and wellbeing. I was so stressed all the time dealing with that team member and the fallout from shit work... Nowadays I'd suggest just leaving.
Honestly, life is too short to try and fix broken office environments... If it's a major problem, it's a lot easier to move jobs than try and change anything.
If you wouldn't go back, make sure you're clear on the lack of support during your exit interview. Mine was quite cathartic, albeit probably changed nothing in that place. Shrug