13-Acre Suburban Medical Campus Vacant Since 2019 Eyed For Data Center Development
The redevelopment of an abandoned hospital in south suburban Blue Island is taking a publicly contentious turn toward a new data center project after a reported shake-up in property ownership.
Blue Island City Administrator Tom Wogan said at an April city council meeting that there has been some “noticeable changes” in the management of the vacant 12.5-acre MetroSouth Medical Center campus, located on Gregory Street, over the last several weeks.
Blue Island Mayor Fred Bilotto told Bisnow in an email Saturday that the city received a general inquiry from the site's ownership about the city's development process regarding any future use, data center included. Nothing official has been submitted to the city and there is no proposal under review, he said.
“Any future development, including a data center or any other use, would have to go through a full and transparent public process, including review by the Planning and Zoning Board, the City Council, and multiple opportunities for community input,” Bilotto said in a statement.
“We take residents’ concerns seriously and will act in the best interest of our community,” he added. “As someone who was born and raised in Blue Island and is now raising my family here, this community’s future is deeply personal to me.”
Public responses to a statement on Facebook from Bilotto after the city council meeting expressed concerns about the potential data center project, especially its possible impact on local utilities. Opposition to new data center development has ratcheted up in some Chicago suburbs in recent months, including Naperville, where residents quashed a proposal in January.
Lockwood Development Partners, which purchased the former hospital for $20M in 2020, had initially planned to redevelop it into senior and veterans housing. An affiliate of Washington-based Builders Capital originated almost $32M for the project and later provided a second mortgage of more than $15M in 2024, according to public records.
Builders Capital filed a foreclosure lawsuit in December against Lockwood after the developer allegedly defaulted on the debt. It was unclear if the foreclosure lawsuit had been resolved.
In January, Lockwood President Charles Everhardt told The Real Deal that data center development was the “highest and best use” of the property, with fiber running across the railroad tracks just east of the site and a power source secured. Wogan confirmed at the city council meeting that Everhardt and his business partners were no longer involved in the development.
The MetroSouth Medical Center campus closed in September 2019 and was prepared in 2020 to house Covid-19 patients. The campus was ultimately never used during the public health crisis.
In 2022, Lockwood put the property up for sale as a possible film and TV production location or a life sciences research campus, according to Crain’s Chicago Business. The company was also open to leasing the property rather than selling it, but it found no takers for either option.
Wogan said the ownership group looking to bring a data center to the site would likely present a case that it is two steps ahead of the common issues the broader public has with data centers: environmental impact, noise pollution and general quality of life. The data center development could bring significant financial benefits, but its popularity is relatively new, he said.
“We're going to have to decide, do we believe it?” Wogan said. “How do we verify it? And is it something our community is willing to accept and welcome? And I think right now, as we sit here, there's a lot more questions than answers on that.”
UPDATE, APRIL 26, 3:45 P.M. CT: This story has been updated with comments from Blue Island Mayor Fred Bilotto.
