April 21, 2021
Travis County approves Central Health’s plans to buy property for a consolidated headquarters with clinical space and fund construction of two new health centers in Eastern Travis County
(Austin) – Travis County Commissioners Court voted Tuesday, April 20, 201, to approve Central Health’s request to issue certificates of obligation (debt) to fund the construction of two new health centers in Eastern Travis County, and purchase and renovate a former department store for a new consolidated headquarters that will include additional space for clinical and other health services.
Investing in Health Care Over Rent
Consolidating office space will allow Central Health to achieve significant long-term savings, which can fund future healthcare for the community. Central Health estimates the savings to exceed $100 million over 30 years.
“We’ll invest in health care for people with low income by controlling long-term administrative costs,” Central Health President & CEO Mike Geeslin said. “It’s simple math. Over time, it’s less expensive to own than to rent, and stewardship of public dollars is part of our responsibility to taxpayers. At the direction of our Board of Managers, we’ve been exploring options for reducing lease costs through office consolidation for almost three years.”
On April 1, the Central Health Board of Managers voted unanimously to give Geeslin the authority to negotiate an agreement to purchase and renovate property for a new consolidated headquarters and clinical space at the former Sears store at Hancock Center. The building is next to the existing CommUnityCare Hancock Clinic, located at 41st Street and Interstate 35 South – just south of the intersection of Highway 290 East.
The headquarters is expected to house the majority of Central Health Enterprise employees (Central Health, CommUnityCare Health Centers, and Sendero Health Plans), including administration, patient navigation, medical management, data and technology, and Medical Access Program (MAP) eligibility call center. Central Health currently pays about $1.8 million annually to lease offices at locations across Travis County.
“Consolidating the majority of the Central Health Enterprise workforce at one headquarters represents multiple benefits for the enterprise and the public, including better access due to a centralized location, proximity to public transit, more parking, and enhanced collaboration and productivity for our team,” Jeff Knodel, Central Health Vice President & CFO said. “This location provides room for future growth, especially for clinical services.”
If and when needed, the location would offer approximately 100,000 square feet of clinical and/or health services space for future expansion to serve Central Health MAP and MAP BASIC patients.
“To keep costs down for taxpayers, we’ve searched for an existing facility to renovate instead of purchasing property and paying for new construction. This is an opportunity that came to us and we knew we had to explore,” Knodel said.
If successful, the purchase of the consolidated headquarters and clinic, as well as construction of two health centers will add about $5.2 million to Central Health’s annual debt service payment, increasing the average property tax bill by $8.65 annually in Fiscal Year 2021. By eliminating lease costs, more of Central Health’s operating budget will be used for healthcare services. Central Health’s financial advisors informed staff that current bond market rates are attractive, and Knodel said Central Health decided to move swiftly to take advantage of these conditions.
No decision has yet been made about the future of the Central Health Cesar Chavez property, which it owns outright, if the purchase of the Hancock property is successful.
Building New Health Centers in Eastern Travis County
With Travis County Commissioners approval, Central Health can move forward with funding the construction of two new health centers in Del Valle and Hornsby Bend, areas with some of the highest rates of families living in poverty and lack of access to health care services in the county.
“The Central Health Board of Managers committed to expanding access to health care in Eastern Travis County and these clinics are part of that commitment,” said Sherri Greenberg, chair of the Central Health Board of Managers. “Data informs our planning decisions, but we listen to residents – and patients – to better understand the types of services they want and how the buildings should look and feel. Collaboration is key.”
A recent community survey about both clinics received 711 responses.
Planned services include primary care, dental, specialty services via telehealth, behavioral health, and pharmacy. With plans well-developed at this stage, the approval of funding for the construction of both of these health centers represents a crucial next step.
Construction for both health centers is expected to begin by the end of 2021 and be completed before renovation of a new headquarters is completed, which is expected to take at least three years. More information on the planned health centers is available at bit.ly/DelValleHWCenter and bit.ly/HornsbyBendHWCenter