'Hostile takeover': Real estate forum tackles elephant in the room and city, FSU, TMH drama
TaMaryn Waters- TMH, which leases its land from the city for $1 per year, has served as an independent, nonprofit healthcare system since 1979.
- While city officials say no action will be taken at an upcoming meeting, TMH representatives and other stakeholders are concerned about the future of community healthcare in the region.
- FSU has expressed interest in creating an academic medical center at TMH, but no plans involving a sale were mentioned in a previous agreement between the two entities.
The 5th Annual Commercial Real Estate Update offered a state of the market on development trends but an "elephant in the room" dominated backroom discussions on whether the city may make a move to sell Tallahassee Memorial HealthCare to Florida State University.
Ever since news broke about an extraordinary City Commission agenda item that revealed staffers are studying whether "a potential sale" of the community hospital is in the city's best interest — especially among community leaders and power players. About 300 of them, along with industry insiders, gathered at the Moon Monday night for the event.
Ed Murray, a principal at NAI TALCOR, the commercial real estate firm that hosted the event, kept the discussion mostly focused on development trends, but at one point said the latest series of events feels like a "hostile takeover" attempt of the community hospital.
"We were blindsided by the agenda item," said Murray, immediate past chairman of TMH's Board of Directors who's been on the board for nine years.
TMH officials, including the hospital's president and CEO Mark O'Bryant, who also attended, say they were caught off guard by the informational agenda item this week that discusses sale options — none of which were discussed with the hospital prior to them being made public. Days after the item went public, FSU put forth a letter expressing its interest in TMH and saying it was "eager to explore" the idea of transforming the hospital into an Academic Medical Center, presumably under the FSU Health flag.
During the event, O'Bryant was invited to talk briefly about major projects underway at TMH to the crowd. His comments steered clear of the drama involving the city and FSU. But he addressed the matter head on in an interview afterward with the Tallahassee Democrat.
"It does feel like there's been conversations held in advance (of this week's upcoming meeting) that didn't include us or any of the other commissioners," said O'Bryant. "That's very concerning. It feels like there's already a structure and a plan in place."
O'Bryant went on to say that TMH has been a community partner that's grown to meet rising demands in Tallahassee and the region.
"This is a community asset, and we've been very good stewards of this asset," O'Bryant said. "We've grown it, developed it. You would think that after 76 years of basically developing that, in that conversation, the city would have said, 'Hey, we may want to be out of the business of healthcare.'"
TMH — the largest healthcare provider in the region serving 21 counties in North Florida and South Georgia — was founded in 1948 as a city-run hospital and transitioned into an independent, nonprofit healthcare system under a long-term lease agreement with the city in 1979.
The city owns 75 acres, roughly 2 million square feet in building space and assets occupied by TMH. The lease agreement calls for TMH to pay the city $1 per year.
City officials said no action is slated to take place at the upcoming meeting but the agenda item makes clear that city staff will "explore the feasibility and potential advantages of a possible sale of the property, considering all available options and approaches."
Ahead of the City Commission meeting Wednesday afternoon, city leaders, TMH officials and others, including O'Bryant, Murray, TMH Board Chairwoman Sally Bradshaw, Tallahassee Mayor John Dailey and City Manager Reese Goad met for the first time since the agenda item dropped.
Murray said those representing TMH look forward to continued meetings "toward resolving some issues."
"But, right now, we're very uncomfortable with the potential degrading of community healthcare in our community," Murray said.
TMH already has a Memorandum of Understanding (MOU) with FSU that outlines the governance structure for a new academic health center in Tallahassee and a medical campus in Panama City Beach.
That MOU, however, makes no mention of a potential property sale by the city that would turn ownership over to FSU, O'Bryant said.
As previously reported, the city analysis came after TMH officials asked the city to change its bylaws so it could create a new health system board whose members wouldn't require "city confirmation authority" to oversee the broader TMH health system and strategy.
After the meeting, City Commissioner Dianne Williams-Cox repeated previous statements by some on the commission, noting this week's agenda item is for informational purposes only.
"To my knowledge, there will be no discussion about selling of the hospital on Wednesday night," she told the Democrat in an interview.
When asked if she had a stance on whether to sell TMH to Florida State, Williams-Cox didn't say where she stood.
"I'm not in a position to say yes or no at this point," she said. "I just want to keep the lines clear, because there's a whole lot of misinformation and disinformation that gets out there from time to time, and I don't want to be a part of it."
Contact Economic Development Reporter TaMaryn Waters at tlwaters@tallahassee.com and follow @TaMarynWaters on X.