The University of Texas Southwestern Medical Center will jointly operate and pay for a new 140-bed hospital and 120,000 square-foot medical office in Frisco.
The UT board of regents on Wednesday approved the partnership with Arlington-based Texas Health Resources, which operates 19 acute care hospitals in Texas, saying the project will help establish a significant footprint in the growing Texas healthcare field.
UT Southwestern Medical Center's total portion of the cost will be $139.7 million. President Daniel Podolsky said UT should start to see a positive cash flow from the project within the first year of operation.
Podolsky said UT began conversations with Texas Health Resources three or four years ago as indicators showed the area healthcare market was thriving. In February, the Frisco Planning and Zoning Commission approved a preliminary site plan for the hospital, to be named Texas Health Hospital Frisco.
"This is a burgeoning area within the broad region of North Texas," Podolsky said, adding the area had seen recent explosive growth in both commercial and residential development.
The $233.8 million hospital on 20 acres will be jointly owned and operated by UT Southwestern and Texas Health Resources. UT Southwestern will own 49 percent of the hospital, contributing about $114.6 million. This includes the cost of the building, a parking garage, roadways, land and equipment.
The $51.2 million medical office building, which will include a 90,000 square-foot multi-speciality clinic staffed by 46 specialists, will be fully owned and operated by UT Southwestern, and construction will be managed by Texas Health Resources with oversight by UT Southwestern, Podolsky said.
Construction of the medical office building will cost UT Southwestern $25.1 million.
"We have structured this to be the 100 percent owner of the medical office building out of our desire to be sure that we had entire control over what services and physicians will be practicing in that building," he said. "We wanted to make sure that remained entirely within the purview of UT Southwestern."
Podolsky said had UT Southwestern pursued a project of this capacity alone, it would cost the university system somewhere around $5.7 billion over five years.
This will be the fourth hospital in Frisco. Texas Health Resources also operates an outpatient center, an imaging center, a sports medicine center and a free-standing emergency department in the city.
The hospital is scheduled to open in 2019, according to the Texas Health Resources website.