Former Sherman Hospital site sold to developer who served time for fraud; site could be used for housing development

Former Sherman Hospital site sold to developer who served time for fraud; site could be used for housing development
The former Sherman Hospital site at 901 Center St. in Elgin includes three buildings, green space and a parking lot. (HANDOUT)

The former Sherman Hospital site on Center Street has been sold to a company whose CEO spent two years in prison on a government theft conviction but also served as a federal informant in the prosecution of Gov. Rod Blagojevich, records show.

Chicago-based Freedom Development Group purchased the site for approximately $1 million, CEO and managing principal John Thomas. The amount is less than the minimum $1.5 million starting bid that had been listed when the 14-acre property was being auctioned a few months ago by Chicago-based Rick Levin and Associates.

Thomas said he submitted a proposal directly to Advocate Sherman directly rather than going through the auction. Hospital spokeswoman Terri Hickey said Freedom Development Group was the only interested buyer.

The property will be used for a residential or senior-housing development, Thomas said. It’s also possible they may resell it, he said.


Thomas has had a checkered past, having spent two years in prison after being convicted in 2015 of stealing nearly $375,000 in taxpayer money earmarked to develop a marina in south suburban Riverdale. Thomas also was a federal informant, wearing a wire to record comments from a former business associate Antoin “Tony” Rezko at a Blagojevich fundraiser.

Following his 2017 prison release, Thomas created Freedom Development Group, which has acquired and developed properties in the Chicago area and St. Paul, Minnesota.

The Sherman Hospital sale was made in July, according to the Kane County Recorder’s Office, but announced by the hospital this week.

“As a longtime provider of health care in Elgin, we care about this community and the area residents we are so proud to serve,” a statement from the hospital said. “Following an open bidding process, our former location on Center Street has been sold to 901 Center Street Holdings LLC.”

“We have worked with city officials and neighborhood leaders throughout this process and expect that they will collaborate with the new owners on a plan for development that benefits the community,” the statement said.

901 Center Street Holdings is the company owned by Thomas’ business partner. The name is derived from the former hospital’s Elgin address.

“Elgin is a great town,” Thomas said. "I think we got a great deal on the asset.”

Thomas said he spoke with Elgin Community Development Director Marc Mylott last month to discuss what best fits the property in terms of redevelopment. He said he’s attempted to set up meetings with Mayor Dave Kaptain and the Northeast Neighborhood Association of Elgin.

"I hope they look past my past and look forward to the future,” he said.

Thomas said he is not afraid to talk of his past and hopes he is judged based on what he’s done since his release.

City of Elgin spokesperson Molly Gillespie said Advocate Sherman did not inform the city or the Northeast Neighborhood officials about pursuing a sale with Freedom Development Group after the auction proved unsuccessful. Thomas did contact the city about Freedom’s plans to purchase the property but no redevelopment plans were discussed, she said.

“The property remains zoned for use as a hospital and medical offices, so the Freedom Development Group will require city approval before any redevelopment occurs,” Center said. “The area residents will have an opportunity to participate in reviewing and commenting on any proposed redevelopment plans to ensure compatibility with the community’s vision.”

Sherman Hospital was founded in 1888 and opened at the Center Street site in 1898. The site expanded and modernized several times over the next century before relocating to its current facility on Randall Road in 2009.