UT regents expected to OK leasing Central Health land for Dell school


The University of Texas plans to sublease two Central Health parcels from a nonprofit, the 2033 Fund.

UT regents are also expected to continue Chancellor McRaven’s salary at $1.2 million a year through May.

A 2016 master plan for the redevelopment of the former University Medical Center Brackenridge hospital site envisioned a public market, open spaces accessible to pedestrians and bicyclists, and tall buildings full of amenities such as a hotel, housing, and retail, office and medical space.

But it’s now unclear how much, if any, of that vision will come to life after the Travis County health care district, which owns the 14.3-acre site at the southwest corner of Red River and 15th streets, announced last week that it was dropping the master developer it chose for the project. Board members said they wanted to speed up the process and make money sooner.

“It’s in Central Health’s best interest to keep things as flexible as possible,” Steven Lamp, Central Health’s vice president of real estate and facilities, said Monday. “Our primary focus needs to be on generating revenue so we can provide health care.”

One piece of the puzzle will come into focus Tuesday when the University of Texas System regents are expected to vote to authorize UT-Austin to lease two of the site’s six blocks for the Dell Medical School and other health-related enterprises.

One of the blocks contains the former hospital, which closed when the privately owned Dell Seton Medical Center opened on UT land across 15th Street.

Though the Central Health board found in 2016 that Brackenridge would not be viable for reuse after it closed, now UT will lease part of it for offices and research, at least in the short term. Officials said they’ll decide later whether to renovate the old hospital, demolish it, or use it as is.

Last week, Central Health officials signaled that they plan to lease two parcels to a nonprofit organization known as the 2033 Fund, which was established by Sandy Gottesman, a local real estate developer and UT graduate.

Gottesman said Monday that he is still negotiating with Central Health and hopes to take the matter before the agency’s board of managers by its March 28 meeting.

The university has been working closely with Central Health on innovative ways to use its property, UT President Gregory L. Fenves told the American-Statesman on Monday. “I’ve been working with Sandy for 2½ years, ever since I became president,” with Gottesman in the role of a kitchen cabinet adviser on real estate matters.

The regents’ agenda indicates that the university would sublease two blocks from the 2033 Fund.

One block is occupied by a medical office building that is expected to be vacated soon and then demolished. The other is the Brackenridge site.

Both would probably be used for research and office space, and portions of the office building site could be subleased by UT to other entities with health-related missions; the 2033 Fund would be the developer of that parcel.

University officials said they can move faster and at less cost by working through the 2033 Fund than they could by working independently or with a for-profit developer that would charge fees.

State Sen. Kirk Watson, a key champion of the medical school, didn’t flinch at the change in plans.

“We want (Central Health) to be nimble,” Watson said. “We want them to recognize that they enhance the value of that property by tying it to innovation and health care and research. … They seem to be moving in the right direction, as far as I’m concerned.”

Aside from the UT deal on the table, however, Lamp said a lot is still up in the air while officials seek out the most lucrative redevelopment plan.

The 2016 master plan “will continue to serve as a guiding document,” and feedback from community meetings will also still factor in, Lamp said.

Will the final plan still incorporate a public market, despite it partially being within the old Brackenridge site, which UT could soon occupy?

Will there still be housing, including some element of affordable housing, as Council Member Ora Houston and other community members had requested? What about a hotel or the open street plan? Lamp said it’s “all to be determined.”

Certain overarching principles will remain in any final product, Lamp said, such as pedestrian friendliness.

“We don’t really know what the final development is going to look like, so we’re not ruling anything out, but we’re not guaranteeing anything, either,” Lamp said.

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