Central Health to pursue buying and redeveloping property for new administrative home
The Central Health board of managers approved a motion to allow President and CEO Mike Geeslin to negotiate and execute a real estate deal to acquire property to be used for administrative and clinical space. Currently, administration works exclusively out of its office on East Cesar Chavez Street, pictured here. (Iain Oldman/Community Impact Newspaper)
At its March 31 meeting, the Central Health board of managers approved a motion to allow President and CEO Mike Geeslin to negotiate and execute a real estate deal to acquire property to be used for administrative and clinical space.
Though Jeff Knodel, Central Health vice president and chief financial officer, said staff was looking at an ideal property, no specific location was named in public session. One stipulation of the motion, however, is that the property is located in Central Austin, similar to Central Health’s current headquarters on East Cesar Chavez Street.
“Some of the benefits that we’re looking to address are not only administrative savings, but we’ve identified a site that offers us the opportunity to provide multiple clinical services,” Knodel said.
After Geeslin negotiates and executes a deal for the new property, Central Health will issue certificates of obligation in order to fund the acquisition and renovation of the future space. The health care district will first need approval from the Travis County Commissioners Court to purchase the property.
According to a timeline presented to the board March 31, Central Health expects to come to a purchase agreement by mid-April and go to the Commissioners Court for approval at its April 30 meeting. The transaction would be finalized by May 15.
The purchase and renovation of the new property would add approximately $5.2 million annually to Central Health’s debt service budget, according to a financial analysis presentation by Knodel. That debt service would translate to a Central Health property tax bill increase of $8.65 for the average Travis County homestead worth $355,379, according to Knodel’s presentation.
The financial analysis presented March 31 shows an overall saving of funds down the line, however. Knodel told managers that the cost of renting its administrative space would outpace the price of building and maintaining its own property by the 12th year of ownership.
“If you look at it from an aggregate standpoint, you see the actual build and real estate renovation begins leveling off,” Knodel said. “Any savings to Central Health provides resources [for us] to provide additional health care.”