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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)<\/p>\nTALLAHASSEE, 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.<\/p>\n
Valuation<\/p>\n
The city hired Ankura Consulting Group, LLC, to conduct a report on TMH\u2019s value in the proposed TMH-FSU partnership. <\/p>\n
\u201cThe valuation is intended to assess the land, buildings, and related fixed improvements that the City owns and maintains title to,\u201d the agenda item wrote.<\/p>\n
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)<\/p>\n
The group used different valuation methods to determine TMH\u2019s value. For assets including real and personal properties, the cost approach, sales comparison approach and net book value were used.<\/p>\n
A historical appreciation analysis was used regarding real property assets, while for all of TMH\u2019s assets, the revenue market approach and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) market approach were used.<\/p>\n
The cost approach valuation found TMH\u2019s estimated asset value to be $438,250,000 and the sales comparison methodology found it to be $418,600,000.<\/p>\n
The net book value methodology found that the estimated real and personal property asset value was $390,298,355. The firm\u2019s historical appreciation analysis found that TMH\u2019s real property assets were valued at $109,304,777. For all of TMH\u2019s assets, the estimated value found through the revenue market approach was $513,596,993 and the EBITDA market approach was $584,508,815. <\/p>\n
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. <\/p>\n
\u201cWhile 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\u2019s obligation and will not transfer to FSU,\u201d the agenda item said.<\/p>\n
Public Hearing Requests<\/p>\n
The city agenda item also requested a second public hearing on the TMH-FSU partnership and another public hearing \u201cat a later date once the Definitive Agreements have been finalized for Commission consideration.\u201d<\/p>\n
The agenda item said that there will be several Definitive Agreements, including a Lease and Operating Agreement, Branding Agreement, and the ACCA. <\/p>\n
More Tallahassee news:<\/p>\n
According to the agenda item, staff is negotiating an MOU with FSU under the city commission\u2019s direction for the transfer of the City\u2019s assets. They say once the agreement is reached, a future public hearing is expected to be scheduled. <\/p>\n
On the Proposed TMH-FSU Partnership<\/p>\n
The agenda further discussed the proposed TMH-FSU partnership and the requested transfer of the city\u2019s ownership of TMH to FSU. It said that the TMH-FSU partnership \u201cis contingent on the transfer of ownership.\u201d<\/p>\n
The agenda item wrote that the \u201cmodern trend\u201d of other academic-health partnerships in Florida, citing UF Health and Tampa General, \u201cputs Tallahassee at risk of losing funding, patients and providers to those cities.\u201d<\/p>\n
They said the partnership could grow academic networks, tackle workforce shortages, research demands and evolving community needs.<\/p>\n
The agenda item stated that under the Memorandum of Understanding, \u201cTMH will remain the hospital\u2019s licensed operator,\u201d while FSU will own the property and lead \u201cacademic, research, and branding initiatives under the FSU Health identity.\u201d<\/p>\n
The hospital would be a \u201cdedicated space for students and residents,\u201d 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 \u201cwill be unified under a co-branded identity.\u201d<\/p>\n
\u201cFSU will license and oversee the use of the FSU Health brand,\u201d the document wrote.<\/p>\n
FAMU\u2019s Board of Trustees said it\u2019s negotiating an agreement with FSU that will be included in the discussion of the TMH-FSU academic health center agreement.<\/p>\n
At it\u2019s last meeting, the board announced they would ask the city of delay the this upcoming public hearing for 30 days.<\/p>\n
The full agenda item for the City Commission\u2019s Wednesday meeting can be found below:<\/p>\n
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