TALLAHASSEE, Fla. (WCTV) – On Wednesday, the Tallahassee City Commission will review public hearing requests and a valuation report released from a private consulting firm on the proposed value of Tallahassee Memorial Hospital, per an agenda item.
Valuation
The city hired Ankura Consulting Group, LLC, to conduct a report on TMH’s value in the proposed TMH-FSU partnership.
“The valuation is intended to assess the land, buildings, and related fixed improvements that the City owns and maintains title to,” the agenda item wrote.
On Wednesday, the Tallahassee city commission is looking to assess a valuation report released from a private consulting firm on the proposed value of Tallahassee Memorial Hospital.(Must credit City of Tallahassee)
The group used different valuation methods to determine TMH’s value. For assets including real and personal properties, the cost approach, sales comparison approach and net book value were used.
A historical appreciation analysis was used regarding real property assets, while for all of TMH’s assets, the revenue market approach and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) market approach were used.
The cost approach valuation found TMH’s estimated asset value to be $438,250,000 and the sales comparison methodology found it to be $418,600,000.
The net book value methodology found that the estimated real and personal property asset value was $390,298,355. The firm’s historical appreciation analysis found that TMH’s real property assets were valued at $109,304,777. For all of TMH’s assets, the estimated value found through the revenue market approach was $513,596,993 and the EBITDA market approach was $584,508,815.
The agenda said that the total valuations ranged from $26 million to $584 million. However, when accounting for debt, the range is from $26 million to $220 million. When not accounting for debt, the valuations range from $109 million to $584 million.
“While it is typical to include debt in the equity calculations, staff has confirmed that in the proposed agreement between TMH and FSU, the current outstanding debt of $364 million will remain TMH’s obligation and will not transfer to FSU,” the agenda item said.
Public Hearing Requests
The city agenda item also requested a second public hearing on the TMH-FSU partnership and another public hearing “at a later date once the Definitive Agreements have been finalized for Commission consideration.”
The agenda item said that there will be several Definitive Agreements, including a Lease and Operating Agreement, Branding Agreement, and the ACCA.
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According to the agenda item, staff is negotiating an MOU with FSU under the city commission’s direction for the transfer of the City’s assets. They say once the agreement is reached, a future public hearing is expected to be scheduled.
On the Proposed TMH-FSU Partnership
The agenda further discussed the proposed TMH-FSU partnership and the requested transfer of the city’s ownership of TMH to FSU. It said that the TMH-FSU partnership “is contingent on the transfer of ownership.”
The agenda item wrote that the “modern trend” of other academic-health partnerships in Florida, citing UF Health and Tampa General, “puts Tallahassee at risk of losing funding, patients and providers to those cities.”
They said the partnership could grow academic networks, tackle workforce shortages, research demands and evolving community needs.
The agenda item stated that under the Memorandum of Understanding, “TMH will remain the hospital’s licensed operator,” while FSU will own the property and lead “academic, research, and branding initiatives under the FSU Health identity.”
The hospital would be a “dedicated space for students and residents,” under the partnership, which the agenda item states would allow existing partnerships with FAMU and TSC to continue. During the first 10 years of the agreement, the agenda item stated that the branding of the hospital “will be unified under a co-branded identity.”
“FSU will license and oversee the use of the FSU Health brand,” the document wrote.
FAMU’s Board of Trustees said it’s negotiating an agreement with FSU that will be included in the discussion of the TMH-FSU academic health center agreement.
At it’s last meeting, the board announced they would ask the city of delay the this upcoming public hearing for 30 days.
The full agenda item for the City Commission’s Wednesday meeting can be found below:
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