The State University System Board of Governors has approved Florida State University's $110 million contract with Tallahassee Memorial HealthCare and the city of Tallahassee.
It's part of the agreement for the city to transfer the hospital and its assets to FSU.
Kyle Clark, FSU's senior vice president for finance and administration, said the money will be paid over 30 years with annual payments of $3.6 million with zero interest.
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"There's a number of accountability measures and performance measures that are embedded in the lease that between FSU and Tallahassee Memorial Hospital, and the university would have the right to terminate should any of those breaches not be cured," he said.
Board Chair Alan Levine applauded the university's move.
"I think you guys have done something here that is demonstrative of how a university would acquire a hospital in terms of making sure you're not taking on an entity that's losing money or potentially failing financially," he said.
The FSU Board of Trustees approved the purchase of the hospital earlier on Thursday.
As part of the purchase, FSU is pledging to spend $1.7 billion on the hospital over 30 years, including $100 million in property upgrades and invest $150 million toward clinical faculty, laboratory resources, research and academic operations.
Included in the contract are accountability measures, Clark said, and the university would have the right to terminate the lease if any breach occurred.
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Board member Doug Broxson, a former state legislator, congratulated FSU president Richard McCullough on the acquisition, which he called a “heavy lift.”
Broxson said when he first met McCollough, the president expressed concerns about the health care not only for Leon County residents, but also the counties surrounding it, which are some of the poorest in the state.
The counties that border Leon – Wakulla, Liberty, Jefferson and Gadsden – are considered “fiscally constrained counties” in state law, eligible for state funding due to their struggle to raise money from property taxes.
“When we consider what you are doing today, it will not only rebrand the great brand of Florida State, but it will send a message about its commitment to the poorest among us,” Broxson said.
The agreement was approved by the Tallahassee City Commission earlier this month.
The full, final agreement with specific terms has not yet been released.
Information from News Service of Florida was used in this report.
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