CENTRAL HEALTH DOWNTOWN PROPERTY
Central Health is redeveloping and leasing portions of its Downtown Property to diversify revenue streams to pay for health care now and in the future.
With a diverse mix of revenue sources, Central Health won’t have to rely solely on property taxes to fund health care for Travis County residents with low income.
This plan is already proving to be a viable way of generating money for our health care operations. In Fiscal Year 2020, we generated $12.3 million* through only two leases.
Over the next year(s), we will undertake various projects to prepare the property for redevelopment. Our goal is to increase the value of the land and remove as many potential conditions that potential developers could consider high-risk.
Our ultimate goal is to maximize the revenue-earning potential of the entire property to fund health care for Travis County residents with low income. This work includes:
- Removing or reducing environmental hazards, demolishing all buildings that aren’t occupied or suitable for future leasing.
- Obtaining an overlay on the zoning from the City of Austin to increase development potential.
- Working with the City to realign Red River Street from 15th to 12th Street, creating new and better access to the property, frontage road, and utility corridor, making the entire property more attractive to developers and the public.
*Ascension Seton will pay Central Health $9,390,624 in FY 2020 to lease the existing parking garage and the Clinical Education Center (the parking garage is connected to the Dell Seton Medical Center, which provides the majority of hospital care to Travis County residents with low income). The 2033 Higher Education Development Foundation, a nonprofit created to benefit UT, will pay Central Health $2,880,028 in FY 2020 for two tracts of land.
What is the Central Health Downtown Property?
The Central Health Downtown Property — former Brackenridge Campus — is a vital community asset that connects the new University of Texas Medical District — including the new Dell Seton Medical Center, which replaced UMC Brackenridge in 2017 — with the Texas State Capitol Complex and Downtown Austin, including the city’s envisioned Innovation Zone.
As planned improvements are made to Interstate 35 and Waller Creek, and in conjunction with a proposed Austin urban rail system, this downtown property can be a vibrant and sustainable hub for a healthy and innovative community.
What’s going to change?
Exciting changes are happening on and around Central Health’s Downtown Property. The new Dell Medical School at The University of Texas at Austin is growing and expanding, Seton has moved into its new state-of-the-art Level One hospital – the Dell Seton Medical Center at UT, and the area is the hub of the Capital City innovation District.
A lease between Central Health and 2033 LP will add more energy to this vibrant area, jumpstarting the redevelopment of the former Brackenridge Campus to immediately generate revenue to pay for health care services in Travis County.
What does that mean for the property?
Central Health’s Board of Managers is looking for innovative ways to generate revenue to fund our core mission – providing access to health care for people with low income. Leasing a portion of its downtown property to the local nonprofit 2033 LP is phase one. The lease will result in $1.425 million for Central Health to fund health care services in Travis County. And it will be the beginning of a new, exciting mixed-use development in downtown Austin with a focus on medical and health innovation, job growth, retail and more.
Redevelopment and Revenue
The Central Health Board of Managers agreed to lease a portion of the downtown property (two blocks) to the 2033 Higher Education Development Foundation, a local nonprofit created to benefit UT Austin. The Foundation is constructing a new 17-story office building that will serve as the flagship of Austin’s emerging Capital City Innovation District, an initiative of Central Health, UT Austin and Ascension Seton, with support from the Downtown Austin Alliance and Opportunity Austin. Companies, nonprofits and community groups will come together in the District with the goal of improving health care, creating jobs, and funding health care through lease revenue. The Foundation’s 99-year ground lease for Blocks 164 and 167 will pay Central Health $460 million over the life of the lease.
Central Health prioritized community engagement since the inception of its Downtown Property redevelopment project. Community engagement efforts kicked off in June 2014 with a community open house to present initial information about the project.
Since then, Central Health has engaged thousands of residents in the planning process and solicited feedback using a variety of tools, including community forums, neighborhood and stakeholder meetings, surveys, and online updates via a website and e-newsletter.
Community feedback from public engagement efforts has helped shape and will continue to guide the planning process and proposed site plan. Below are five key themes that emerged from the community conversations and surveys.
- Community members are largely in favor of the project and feel that the creation of the Dell Medical School at The University of Texas at Austin and the adjoining Dell Seton Medical Center and teaching hospital will bring benefit to the community.
- Most community members support mixed-use development for the property that would include medical uses; space for medical research and innovation; spaces that create a sense of community; and other uses that provide revenue for Central Health to carry out its mission.
- Most community members prefer health care services close to home in locations that are easy to access and include ample free parking.
- The campus should be designed for accessibility and connectivity with surrounding areas. Walkability, public transportation, and accessible parking accommodations should be considered on the campus. The campus should also serve as a connective corridor to the new Medical District north of 15th Street, the revitalized green space of Waterloo Park and Waller Creek, as well as to existing resources in the Red River District and East Austin.
- The campus should be an inclusive hub of activity that provides opportunities for job growth, innovation, retail, and other uses. It should be designed in a way that feels welcoming and inclusive to all members of the community.
Community Engagement Approach
In consideration that all Travis County residents stand to benefit from the Downtown Property redevelopment project, Central Health designed an ongoing, multi-pronged community engagement effort to cast a wide net to inform, engage, and partner with many segments of the population. Central Health is utilizing a variety of tools to solicit community input and gauge public support of the project, including (1) Large scale community events; (2) Small stakeholder meetings; (3) Surveys via phone, in person at health centers, neighborhood canvassing, in person at neighborhood meetings, and online; and (4) Creation of a dedicated web page.