Central Health parts ways with firm redeveloping Brackenridge site

Updated Feb 21, 2018
The University Medical Center Brackenridge site will be redeveloped over the course of several years.

Central Health has changed course on its plans to choose one master developer to redevelop the prime six-block site in downtown Austin that was once home to University Medical Center Brackenridge.

Travis County’s health district in October had selected Baltimore-based Wexford Science & Technology, one of several contenders, as its preferred partner for the yearslong project, but Central Health officials announced Wednesday night at a budget and finance committee meeting that the firm has withdrawn from consideration.

Central Health owns the 14.3-acre site at East 15th and Red River streets, which is awaiting its next chapter after the old hospital was closed last year and relocated to the newly built Dell Seton Medical Center at the University of Texas, diagonally across the street. The new hospital serves as an anchor for UT’s fast-growing medical school.

Central Health’s budget and finance committee voted Wednesday to recommend that Central Health President and CEO Mike Geeslin negotiate with other interested parties, including the 2033 Fund, a nonprofit. Committee members Sherri Greenberg, Abigail Aiken and Shannon Jones abstained.

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The split with Wexford was amicable, Geeslin told the American-Statesman. As talks progressed in recent months, he said, it became clear to both sides that Central Health and Wexford had differing visions for the site.

By taking a new, different route, officials said they hope to speed up redevelopment and, at the same time, generate more revenue from the site.

“We appreciate Wexford Science & Technology participating in our procurement process,” Geeslin said. “It’s a time-intensive process that requires a thoughtful, comprehensive response and we wish them future success.

“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.”

Already, there’s interest from the 2033 Fund in at least two of Central Health’s six blocks.

Established by Austin businessman and UT graduate Sandy Gottesman, the nonprofit has an eye on city Block 167, where the former hospital stands, and Block 164, the site of a medical office building along Red River Street.

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The last tenants in the medical office building will soon relocate, Central Health’s vice president of real estate and facilities, Steven Lamp, said, and it’s expected the existing structure will be demolished.

Any new building there would be designed “for future health-related needs and to support the joint mission of Central Health, Dell Medical School at UT and their partner Seton Healthcare Family,” spokesman Ted Burton said.

When it comes to the old hospital tower, Lamp said the 2033 Fund is exploring whether to retrofit it or replace it with something new.

There is no timeline for work to begin of either of the blocks.

“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.”

At a meeting next week, the UT System Board of Regents is expected to consider allowing UT’s Austin campus to lease both blocks from the 2033 Fund and, potentially, sublease some portions of the two sites to other entities with health-related purposes.

“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,” UT President Gregory 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.”

ALSO READ: UMC Brackenridge campus redevelopment raises affordability worries

As for the remaining land on the Brackenridge site, Geeslin and Lamp said Central Health and its board could choose to work with a single developer — or several of them — in future phases. The goal of having as much of the site used primarily for medical-related purposes remains the same, they said, regardless of which developers are chosen.

Some of the campus is under lease for several more years, Central Health said, while UT has a contract in place for a significant chunk of the 1,400 spaces in the parking garage across the street from Dell Seton Medical Center, meaning a redevelopment there is unlikely.

There is a need to monetize as much of the site as possible to help fund Central Health’s many community health care programs, Central Health board Chair Guadalupe Zamora said.

“This is an option we must explore,” he said. “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.”