Shuttered Blue Island hospital shopped as the next Cinespace

The listing will test how hungry investors are for big properties south of the city with prime access to public transportation, and whether they envision a future health care use or something different for the longtime hospital campus.

The Lockwood venture paid $ 20 million for the property in March 2020 and intended to convert it into housing for veterans. But the pandemic sidelined that vision, as the state of Illinois took control of the hospital and spent around $ 20 million upgrading the facility as a potential emergency site for COVID-19 patients, according to a SVN marketing flyer.

Lockwood retook control last year and has been renting out the hospital to film and TV production companies under a new “MetroFilm Studios” brand, with Amazon, HBO and Netflix among the content studios that have shot shows in and around the building.

Now the developer is testing whether a production company will want to acquire the campus outright or partner with it on a joint venture to run the campus as a production studio as demand for such space soars in Chicago. Driven by a boom in demand for streaming content , producers of movies, TV shows and streaming services spent a record-high $ 631 million in Illinois last year, according to state and city figures announced last week.

Dan McNulty, a Chicago-based consultant who oversees the hospital property on behalf of the Lockwood venture, said the firm is having ongoing conversations with an undisclosed production studio about a deal to team up on converting the entire campus into studio space. the wake of Chicago’s most prominent production campus, Cinespace Chicago Film Studios, selling recently to a private-equity firm for more than $ 1 billion.

While demand for studio space in Chicago is growing, production companies “are stuck because of the soundstage space available,” McNulty said. “We hear that loud and clear.” Other investors are on the local film and TV bandwagon already. A producer of “The Chi” television series last year proposed plans for a big film studio in South Shore, and a New York developer sought investment partners last year to create a studio on the city’s Northwest Side.

Lockwood is also open to leasing all or part of the campus to a user rather than selling it. In addition to the film and TV angle, SVN is marketing the MetroSouth campus for health care uses, such as clinical space or lab space for life sciences research. Local demand for the latter has grown during the pandemic, though Blue Island is wholly unproven as a destination for companies seeking space for pharmaceutical or biotechnology research.

Any substantial redevelopment of the property would require approval from the city of Blue Island, which wants the property to help bring foot traffic and economic activity to the area but would prefer the hospital continue to serve a health care use, said City Administrator Tom Wogan.

“We have a vested interest in wanting to see the property serve a beneficial role in the community,” he said. “We’re hopeful that (its) future involves filling in some of the gaps in health care services that the community lost when the hospital closed. “

In addition to the hospital, the campus includes a 43,000-square-foot medical office building at 2310 York St., as well as a parking garage and surface parking lots that offer 819 spaces combined.

SVN is playing up the substantial upgrades that the Army Corps of Engineers added to the hospital building in preparing it for COVID-19 patients, including installation of HEPA air filtration systems in all patient rooms and an increase in the hospital bed count from 392 to more than 500.

The hospital opened in 1905 and was most recently expanded in 2003. Its previous owner, Brentwood, Tenn.-based Quorum Health, closed it in 2019 amid staggering financial losses. The facility was one of many community hospitals struggling to survive in recent years amid mounting operating costs and pressure to drive down overall medical spending.

SVN brokers Angelo Labriola and Paul Cawthon are marketing the MetroSouth hospital property on behalf of the owners.