Florida State University and Tallahassee City Manager Reese Goad have agreed to a proposed Memorandum of Understanding (MOU) that will serve as the basis for the transfer of all city-owned hospital assets currently leased to Tallahassee Memorial Healthcare, Inc. (TMH)
The City Commission is scheduled to take action on the MOU at the next regularly scheduled January 14, 2026, meeting at 3 p.m. at City Hall.
The MOU proposes approximately $3.6 million in annual payments to the city for the next 30 years. In addition, the agreement requires the continuation of charity/indigent care, a $250 million investment by 2034 and a longer-term investment.
The Agreement
The agreement will begin the transformation of the hospital into a full academic health center, operating under FSU Health, a healthcare ecosystem that combines research, clinical care, and teaching to bring healthcare innovation and cutting-edge medical advances directly to patients across North Florida.
“Florida State University is committed to investing in the future of healthcare while expanding our mission of education and research,” FSU President Richard McCullough said. “We appreciate that support from the City of Tallahassee and look forward to establishing an academic health center in North Florida.”
The agreement outlined in the MOU provides that FSU will ensure that charity/indigent care remains in full effect and continue to be at least as generous as what is currently in place, In addition, the MOU lays out an approach whereby FSU will invest $1.7 billion locally of the next 30 years. This commitment consists of a 30-year contribution to citizens as payment for the city-owned assets; a short-term investment to improve local facilities and provide research grants; and a 30-year long-term investment plan aligned with academic health center practices.
Specifically, the contribution to citizens totals $109 million over 30 years, recognizing the citizens’ investment in the original facilities. An additional investment of $250 million by the end of 2034 will upgrade existing facilities and support clinical faculty, research and other investments. The final portion of the financial commitment will support the development of new clinical and laboratory spaces and facilities. Together these commitments are expected to exceed $1.7 billion.
“The agreement charts a bold, transformative path forward. Thanks to the dedication of professionals who refuse to accept the status quo, the future of healthcare in Tallahassee will be better,” Tallahassee Mayor John Dailey said. “By aligning our hospital with one of the state’s premier universities to create an academic health center, we are redefining healthcare in a way that positively impacts the lives of residents locally and across the region.
Financial Impact
Academic health centers are integrated healthcare institutions that combine patient care, medical education, and research within a university-affiliated hospital system. These institutions play a central role in advancing medical innovation, training future healthcare professionals, and providing specialized medical services that may not be available at community hospitals. Typically affiliated with medical schools, research universities, or teaching hospitals, academic health ceneters serve as regional hubs for complex and specialized care. The creation of an academic health center in Tallahassee will bring world-class medical training, cutting edge clinical research, and expended healthcare services to North Florida, lessening the need for Tallahassee citizens to travel for health care and providing opportunities for others outside the region to travel to Tallahassee for health care.
The Office of Economic Vitality has completed an initial economic impact assessment utilizing source data from the U.S. Department of Commerce, Bureau of Economic Analysis and its Regional Input-Output Modeling System. When with the investment commitments outlined in the MOU, the analysis projects a conservative economic impact exceeding $3.64 billion and the creation of more than 900 jobs over the next 30 years.
FSU, City Agree to Proposed Terms for Transfer of City-Owned Hospital Assets added by Staff on
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Ish Kabibble You are missing the point. FSU health is going to happen and yes they need the hospital to be academic medical center for the conference alignment aka Football and to tap into massive research dollars. At the price stated FSU is buying the asset that should be valued over a billion dollars for 109 million or a 70 to 90% discount off market with payments spread out over 30 years. Someone is licking there chops at this deal and thats FSU. This real issue is the COT is selling a valuable tangible asset for what would appear to well under market value. TMH is responsible for all the debt currently NOT the COT they are simply the landlord here and have minimal exposure. COT should be getting fair market value for the land buildings and equipment and when you come up with that price tag citizens should demand to know where and how that valuation was calculated in an official appraisal. The other question is what are the citizens of Tallahassee getting out if this deal other than the city selling off real estate. Also I would say at this price point I would have to imagine that other parties would become interested because for 109mill you cannot replace whats already there for that money. Again the new surgical tower was over 250mill and the COT is selling the whole kit and caboodle for less than 50% of what it cost to build that one building. Citizens wake up and demand accountability and fair market value for the hospital. Once word spreads in the meda about this proposed sale price other offers may come to the table what is the COT going to do when that happens??? Especially if its a higher offer?
TMH has been mismanaged for years. It is top-heavy and has overpaid the very top while undervaluing its nurses and leaving key medical positions vacant. It has abused some of its vendors (ie: departure of Advanced Urology to CRMC). It is cash poor and has been liquidating assets to improve its books. Florida State is likely positioning itself to expand its footprint as a research outlet. This model has been successfully used across the nation for decades. Most, not all, of the best medical facilities in the nation leverage the tethering to a major university for better medical care. Additionally, FSU is probably looking ahead to conference alliances and better financial security. This move aligns FSU with, say, the Big Ten Conference and the type of accreditation it requires with a medical school component. TMH is in no position to bargain for a better deal. Florida State University has proven itself. Is it perfect? No, but there is no other entity better positioned to try and fix the trainwreck which TMH has become. The City is finally coming to its senses, at least on this singular issue.
I didn’t read anything in this report that benefits me or my health. So, they are required to keep the emergency room just as crowded and inaccessible for regular taxpayers as it is now,,,big deal. FSU is not on our side.
Citizens of Tallahassee are being ripped off. FSU is stealing this hospital. How and who was responsible for coming up with the final valuation of the land and buildings? FYI the new surgical tower that opened in 2019 cost over 250million to build. Something needs to be done to stop this sale until the purchase price is at fair market value. The COT is giving this away.