Florida State University, City of Tallahassee complete hospital asset transfer, advancing FSU Health
Florida State University and the City of Tallahassee on Friday completed the legal transfer of city-owned hospital assets, marking a historic milestone for FSU Health, the university’s academic health system.
The action allows Florida State and Tallahassee Memorial HealthCare to continue their work toward establishing an academic health center in Florida’s capital city.
The transfer follows approvals by the Tallahassee City Commission on March 11, the Florida State University Board of Trustees and the Florida Board of Governors.
“This milestone reflects years of partnership and a shared vision for the future of health care in our region,” said FSU President Richard McCullough. “This is a major step forward for FSU Health and for expanding clinical care, research and medical education in North Florida.”
Tallahassee Memorial HealthCare will continue its long‑standing role of operating the hospital and remains responsible for patient care, employees and daily operations.
This partnership will expand medical education, strengthen clinical care, and grow research in Tallahassee and across North Florida. Together, the organizations are building an integrated academic health system designed to better serve patients while advancing discovery and training the next generation of health care professionals.
“This is an exciting day for TMH, FSU and our community. This brings us one step closer to our vision of an academic health model — one that will strengthen our ability to recruit physicians, expand specialty services, and continue delivering exceptional care close to home,” said Mark O’Bryant, CEO of Tallahassee Memorial HealthCare.
Tallahassee Memorial HealthCare becomes the clinical anchor of FSU Health and builds on years of collaboration between the two institutions, including construction of the FSU Health Research Center on the TMH campus, which is expected to open later this year.
'Historic milestone': FSU now owns TMH campus as city transfers hospital assets
Florida State University now effectively owns the Tallahassee Memorial HealthCare campus.
FSU and the City of Tallahassee announced Friday evening that the legal transfer of the city-owned hospital assets are complete, "marking a historic milestone for FSU Health, the university’s academic health system," according to a FSU press release.
TMH will continue to operate the hospital as a non-profit and doctors and staff will remain hospital employees rather than state employees. FSU, however, now owns much of the Miccosukee Road campus and equipment as part of a $1-a-year lease deal after the City of Tallahassee divested its interest in the hospital it has claimed as its own for nearly 80 years.
How will the hospital operation merge with FSU?
Because there is no definitive agreement on more than a dozen different points, there is plenty of uncertainty of how the two entities will come together.
The best guide for what happens next may be a September Memorandum of Understanding between FSU and TMH that was forged after months of tense negotiations and accusations.
The MOU envisioned an academic medical center governed by a 17-member board made up of hospital and university appointees. TMH, which feared political interference if it lost local control of the board to academic seats, would ultimately have a slim voting majority with one extra member over FSU.
Then came objections from Florida A&M University that it wasn't included in the deal and that the university, which once ran FAMU Hospital before it was closed, deserved as many as three seats. That sent negotiators back to the drawing board, with FSU holding separate discussions with FAMU.
FSU ultimately agreed to give up one of their seats to a FAMU representative with the understanding that TMH would give up a seat for TSC. But TMH officials said they never agreed to that.
It's not completely clear where the final board makeup will land.
The agreement also explicitly states TMH is to "retain control" but is subject to "coordination and cooperation" with FSU. The hospital will remain an independent entity, with its financial statements also remaining separate from the university.
All the costs associated with "purchasing, securing and maintaining" assets, as well as repair and maintenance costs will fall on the shoulders of TMH. Finances will only cross when it comes to shared employees that are working for both parties, the MOU says.
While FSU Health will ultimately become the dominant brand, don't expect a full-fledged name change too quickly. The MOU says the parties will co-brand for ten years, unless otherwise decided by the board.
What is FSU paying and pledging for the hospital?
The city's agreement with FSU includes a pledge that university administrators will spend $1.7 billion to invest locally over the next 30 years – though the agreements make clear that this is on the condition of the legislature appropriating "a sufficient amount for FSU to perform its obligations under this agreement."
It also includes a commitment by FSU to invest $100 million in existing hospital facilities and another $150 toward the FSU Health endeavor.
For the transfer of the assets, the city will charge FSU $109 million, which will be contributed back to City Hall coffers in annual installments of $3.63 million over the 30 years.
