Negotiations over what amounts to a sale of Tallahassee’s community hospital to Florida State University could spill into the new year as the city and university go back and forth on the price tag and the process of transferring the assets.
City Manager Reese Goad said it’s possible the commission has an offer to consider at the December meeting, but he said all the agreements have to be approved at the same time before a transfer can occur.
“We’ve met numerous times with representatives from FSU,” Goad told commissioners during the Nov. 19 meeting. “They are, as you might expect, negotiations.”
There’s no set timetable to reach an agreement, he said, but as soon as they do, the commission will be informed.
City Manager Reese Goad speaks as the City of Tallahassee, Florida State University and Tallahassee Memorial HealthCare meet to discuss the sale of the hospital Wednesday, October. 1, 2025.
“I think they’ve gone well,” he said of the negotiations. “We’ve covered a lot of ground.”
Will final TMH vote come during a bitter election battle?
But the clarity on the timeline means a final vote on an issue, which Commissioner Diane Williams-Cox has said is “ripping our community apart,” may not take place until well into 2026 in the grips of a volatile election year.
The city formally began discussing the sale of Tallahassee Memorial HealthCare to FSU after the commission agreed to move forward with negotiations in a split 3-2 vote during its September meeting.
But well before news of a possible sale broke publicly in March, Goad and city leaders were already putting a price tag on the hospital. They contracted with a private consulting firm that had previously worked with FSU to develop a quick valuation that is not considered a formal appraisal.
Commissioner Jeremy Matlow, who is running for mayor in 2026, once again called for a vote for a formal appraisal on Nov. 19, but the motion failed in a typical 3-2 fashion.
City and university representatives have been meeting amid increasing backlash from the community and local leaders who take issue with the deal’s secretive origins, swift approval and lack of inclusion of other local institutions such as Florida A&M University and Tallahassee State College.
But the city negotiations with FSU on a price may be the easy part.
At the same time those talks are continuing, there appears to be more of a standoff between FSU and TMH leaders over seats on the governing board. Hospital officials say that any board arrangement that gives a majority of seats to academic institutions is a “non-starter” and would mean giving up “community control” of the hospital to institutions that ultimately answer to politicians.
“What we’re working toward in negotiations is a [memorandum of understanding] that would set the framework … we would then move forward to develop that full agreement,” Goad said. “Simultaneously, TMH and FSU are working on the development of their agreement and how that relationship will happen. So all these things are moving forward in parallel.”
Would it be legal to sell the hospital without a final agreement in place?
All of the assets associated with TMH’s main campus — including the 75-acre property, two-million square-foot building, hospital beds, X-ray machines and more — are still owned by the city as part of a $1-a-year lease agreement.
The lease agreement’s origins stretch back to the hospital’s founding on April 23, 1948, when six people “gathered in a small room in a wooden barracks at Dale Mabry Field, on the outskirts of Tallahassee” and created the hospital. Back then, it was called “Baptist Hospital” and made up of 36 one-story wooden barracks scattered on a hill at Dale Mabry Field, where Tallahassee State College now sits off Appleyard Drive.
The city of Tallahassee purchased the hospital for $10,000. The original location, however, wasn’t ideal. For roughly $2 million, a new 150-bed hospital building was built at TMH’s main campus location on Miccosukee Road. In 1979, the city set up the lease deal in which the city retained ownership of the property and the building, but the TMH nonprofit operates the enterprise.
There’s been strong opposition to transferring the lease and those long-held hospital assets without all the cards on the table, and Goad explained Wednesday that all the parts have to move forward together.
“They’re all related, and they’ll come back together at the conclusion of the process,” Goad said.
When asked by Commissioner Jack Porter if it would be possible for the city to transfer the hospital to FSU without “definitive agreements,” City Attorney Amy Toman responded “I don’t think we could legally do that. I mean we’d have to have what will be complicated legal documents in place.”
‘Going well’: Goad explains the three must-dos with FSU
The City Commission listens to comment on the future of Tallahassee Memorial HealthCare during a meeting on Wednesday, March 26, 2025.
FSU and the city have been hammering out three facets of the transfer: indigent care, deed restrictions and how FSU will pay the city.
In response to public concern, the city is insisting that the hospital continue to treat those who cannot afford to pay or who don’t have insurance. The city is also working to create a deed restriction that would give the city the opportunity to buy back the hospital if FSU ever decided to divest.
Lastly, FSU and the city are discussing how the people of Tallahassee will benefit monetarily from the transfer, whether that be through regular FSU payments to the city or reinvesting the dollars in the hospital.
“It’s going well, but these things take time,” Goad said.
Local government watchdog reporter Elena Barrera can be reached at ebarrera@tallahassee.com. Follow her on X: @elenabarreraaa.
This article originally appeared on Tallahassee Democrat: TMH-FSU hospital sale, wrangling may drag into 2026