Tallahassee commission directs manager to negotiate payment for proposed FSU–TMH academic health center

The Tallahassee City Commission on Friday, during a special meeting and public hearing, voted 3–2 to direct the city manager to negotiate a payment structure with Florida State University related to a proposed memorandum of understanding that would create an FSU Health academic health center and transfer title to the city-owned main hospital campus to the university under a long-term lease.

The memorandum of understanding, presented by leaders from Tallahassee Memorial Healthcare and Florida State University, would preserve TMH as a nonprofit, locally operated hospital while rebranding it as FSU Health, establish a 17-member governing board (9 seats nominated by TMH and 8 by FSU), and place the campus under a 40-year lease for a nominal dollar-per-year amount, according to presenters.

Mark O’Brien, chief executive officer of Tallahassee Memorial Healthcare, told commissioners an academic health center model would let the region expand specialty services, residencies and clinical research. "It will expand access to advanced care over time, training and retaining physicians, nurses and health professionals," he said.

Florida State President McCullough said the university sees the affiliation as a way to bring research, residency slots and clinical trials to the area and to help keep clinicians in North Florida. "This partnership is not just about us," McCullough said, noting FSU’s existing work with Florida A&M University and Tallahassee State College and citing a state-supported FSU Health Academic Research Center under construction on the TMH campus.

City staff described the city’s legal position: the 1979 lease makes the city the title holder of the main campus assets even though TMH has operated and financed much of the property since that time. City Manager Merritt told commissioners the MOU contemplates a transfer of those leased assets to FSU and that the commission should give staff direction on whether and how to pursue a transfer and any compensation to the city.

Public commenters voiced broad support for improved local specialty care and more training programs, and also raised repeated concerns about the proposed change in ownership of city assets. Epidemiologist and former state official Dr. Shamariel Roberson said academic centers can improve population health through research and training. "This partnership has the potential to do more than just expand health services," Roberson said.

Other speakers urged caution. Lamonte Horn, a concerned citizen, argued the transfer would move "the city's equity to a state controlled entity under a 40 year leaseback" and urged the commission to submit the final agreement to a public ballot referendum. Several speakers asked the commission to require independent appraisals of the property and to secure legally binding protections for indigent care, continuity of staff and local governance.

Several speakers asked the commission to guarantee seats for Florida A&M University and Tallahassee State College or to otherwise formalize commitments to local, historically Black institutions. FAMU Vice President Palm told the commission his university seeks concrete pathways for students and faculty to participate in the clinical pipeline and research partnerships.

On procedural and financial details, FSU and TMH representatives said the affiliation aims to preserve TMH’s nonprofit status and local operational control while allowing FSU to supply access to tax-exempt financing, state appropriations and research infrastructure. Presenters described a soon-to-be-completed $134,000,000 FSU Health Academic Research Center on the TMH campus and said the partnership will support expansion of residency programs, including psychiatry and family medicine; presenters said the psychiatry program will ultimately bring about 16 residents to the region and the family medicine residency practice will serve roughly 10,000–12,000 patients a year.

Following nearly three hours of presentation and public comment, Mayor Daley made a substitute motion directing the city manager to negotiate a payment structure with FSU related to the transfer of the city-owned campus assets and to continue work with the parties on definitive agreements. Commissioner Richardson seconded the motion. The substitute motion passed 3–2; commissioners Matlock and Porter voted no.

Commissioners and staff repeatedly said more analysis and community outreach are needed before any final sale or transfer is completed. City staff said the MOU the parties provided is an initial framework and that any final agreement would be substantially longer and require further legal review, public notice and, likely, additional public hearings. City staff earlier asked the commission to set a public hearing for Oct. 22 so the public could review a draft transfer framework; commissioners did not vote to finalize that date during the substitute-motion vote.

Commissioners listed immediate follow-ups: city staff will continue negotiations with FSU and TMH, produce financial and legal analyses including potential valuation approaches for the city-held assets, and return to the commission with recommended terms and additional opportunities for public engagement. Several commissioners said they want independent appraisals and binding written commitments on indigent care, staff continuity and local governance to be part of any final agreement.

The commission’s action does not itself transfer property or change TMH’s operations; it authorized staff to negotiate payment and framework terms to bring back to the elected body for further decision.

What’s next: City staff will report back with the results of negotiations, supporting appraisals and draft legal agreements for future hearings and possible votes. If commissioners approve a final transfer agreement, it will be presented for public review and, depending on the commission’s direction, could be subject to additional public processes or ballot referral.