The City of Tallahassee and Florida State University (FSU) on Friday reached a $1.7 billion agreement to transfer city-owned hospital assets currently leased to Tallahassee Memorial HealthCare, advancing plans to transform the region’s healthcare system into a full academic health center under FSU Health.
The agreement, subject to final city commission approval, outlines a long-term partnership aimed at expanding specialty care, research infrastructure and medical education in Tallahassee and North Florida. City officials said the transfer aligns with the City Commission’s direction to improve healthcare outcomes through a university-affiliated model that integrates clinical care, teaching and research.
A public hearing for final action by the Tallahassee City Commission is scheduled for March 11 at 9 a.m. at City Hall.
Under the agreement, FSU commits to investing $1.7 billion locally over the next 30 years. The plan includes a $109 million contribution to citizens over three decades as payment for the city-owned assets, recognizing public investment in the original facilities. An additional $250 million is slated for investment by the end of 2034 to upgrade existing facilities and support clinical faculty, research grants and related initiatives. The remaining portion of the financial commitment would support development of new clinical and laboratory spaces consistent with academic health center practices.
“This agreement represents the City Commission’s direction to transfer City-owned hospital assets to FSU to improve healthcare outcomes for Tallahassee and North Florida through expanded specialty care, equipment and research infrastructure,” Mayor John Dailey said. “Implementation will mark a turning point, propelling our community’s healthcare system beyond current constraints and into a higher standard of research-based excellence with regional impact. Embracing this bold step forward exemplifies true visionary leadership.”
As part of the agreement, FSU will maintain charity and indigent care at levels at least as generous as current policies, according to a memorandum of understanding approved by the City Commission in January.
The city’s Office of Economic Vitality said an initial analysis projects the investment could generate more than $3.64 billion in economic impact and create more than 900 jobs over the next 30 years, based on federal economic modeling data.
