(Austin) – To speed up the redevelopment of the Central Health Brackenridge Campus in downtown Austin and generate revenue faster to fund health care delivery, Central Health may move away from its master developer strategy.
On Wednesday, Feb. 21, the Budget and Finance Committee of the Central Health Board of Managers recommended Central Health President and CEO Mike Geeslin negotiate with parties, including The 2033 Fund, who are interested in developing two blocks on the 14-acre campus. The 2033 Fund is a non-profit organization established by UT alumnus and businessman Sandy Gottesman.
As Central Health explores new redevelopment options, Wexford Science & Technology, LLC, has withdrawn from consideration to be the master developer for the Brackenridge Campus. Central Health selected Wexford Science & Technology last October as its preferred master developer after a two-step competitive procurement process.
“We appreciate Wexford Science & Technology participating in our procurement process – it’s a time-intensive process that requires a thoughtful, comprehensive response and we wish them future success,” Geeslin said. “At the same time, I commend our board for having the foresight to give Central Health flexibility in pursuing a number of redevelopment options, whether it’s working with a master developer or redeveloping the campus tract by tract. Whatever path we choose, our top priority is to fund Central Health’s mission of providing health care services for Travis County residents with low income.”
The 2033 Fund is interested in two specific blocks on the Campus for health and research operations. The tracts are Block 167, the former University Medical Center Brackenridge hospital tower, and Block 164, which is located along Red River Street south of the existing parking garage. Block 164 would be used for future health-related needs and to support the joint mission of Central Health, Dell Medical School at The University of Texas at Austin, and their partner Seton Healthcare Family.
The UT System Board of Regents next week will consider authorizing UT Austin to lease those blocks from the 2033 Fund both for Dell Medical School activities and to potentially sublease portions to other entities with an aligned health care mission, said UT Austin President Gregory L. Fenves.
“Redeveloping the Brackenridge Campus provides a unique opportunity to improve health care in Central Texas and to continue to align the missions of UT’s Dell Medical School and Central Health,” Fenves said. “UT Austin has always been open to working with a master developer, or directly with Central Heath or its designee to use the land to promote clinical care, health and research operations.”
The Central Health Board of Managers is focused on leveraging the Campus’ maximum potential for Central Health’s long-term financial health, and a partnership with UT through The 2033 Fund offers near-term cash flow to Central Health. Central Health would also maintain flexibility for future development options on other parts of the campus, six contiguous blocks located at 15th Street and Interstate 35. By working directly with a potential tenant, Central Health potentially eliminates significant overhead costs, which means more net revenue to fund its mission.
“The 2033 Fund is excited about the opportunity to work with UT Austin and potentially be part of Central Health’s efforts to help develop this historic tract,” Gottesman said. “We also look forward to partnering with other organizations to promote health care operations and medical research on the site.”
The financial details and timeline of any such partnership would be negotiated among Central Health, the 2033 Fund and UT Austin before any agreements are finalized.
“This is an option we must explore,” said Dr. Guadalupe Zamora, Central Health Board Chair. “As we serve more and more Travis County residents, Central Health will benefit from having tenants on its campus paying rent as quickly as possible. The board is determined to do what’s in the best interest of Central Health, Travis County taxpayers and the people we serve.”
If Central Health reaches an agreement with The 2033 Fund, it will not preclude the health care district from redeveloping the remaining blocks in alignment with the Central Health Brackenridge Campus Master Plan. With or without a master developer for the project, the Master Plan can serve as a guiding document. It was created with community input and adopted by the Central Health Board of Managers. The Master Plan is based on three principles – Mission, Stewardship and Partnership – and calls for a mixed-use, high-density development including medical and health care space. The redevelopment is an integral part of the Capital City Innovation District, an emerging downtown neighborhood of innovators and entrepreneurs focused on creating healthier communities.