City of Tallahassee leaders and Florida State University have struck a sweeping deal valued at $1.7 billion to transfer all City-owned hospital assets that are currently leased to Tallahassee Memorial HealthCare (TMH).

City officials say the agreement is designed to remove barriers to growth and accelerate improved health outcomes across Tallahassee and North Florida, with an emphasis on expanding specialty care, modernizing equipment and strengthening research capabilities.

Mayor John Dailey called the agreement a “turning point,” saying it aligns with the City Commission’s goal of moving the community’s healthcare system toward a higher standard of research-driven excellence with broader regional impact.

The City Commission is scheduled to hold a public hearing on March 11 at 9 a.m. in the City Commission Chambers at City Hall (300 S. Adams St.) to take final action.

A path toward an academic health center under FSU Health
The transfer is positioned as the next major step in transitioning the hospital into a fully integrated academic health center operating under FSU Health—a model that combines clinical care, medical education and research to bring new treatments and innovations directly to patients.

FSU President Richard McCullough said the agreement reflects a shared commitment to strengthening healthcare locally while also advancing education, research and clinical excellence. He added that the partnership is intended to create an academic health center that serves the region for generations.

What The $1.7B Investment Includes

Under the agreement, FSU’s commitment totals $1.7 billion invested locally over 30 years, structured in three major components:

• $109 million over 30 years as a contribution recognizing citizens’ historic investment in the original facilities
• $250 million by the end of 2034 to upgrade existing facilities and support clinical faculty, research and related initiatives
• A long-term investment plan over 30 years to develop new clinical and laboratory spaces and other facilities consistent with academic health center practices

Charity Care Commitment Remains

As previously outlined in the Memorandum of Understanding approved Jan. 14, FSU will ensure charity/indigent care continues and remains at least as generous as current levels, according to the City.

Economic Impact Projections

The City’s Office of Economic Vitality completed an initial impact assessment using federal source data and the RIMS II modeling system. Combined with the investment commitments, the analysis projects an economic impact of more than $3.64 billion and the creation of over 900 jobs during the next 30 years—an impact the City characterized as a long-term engine for the local economy.

Source:  FSU