Hotel And Mixeduse Project Could Provide Safety Net For Jackson Health System
Written by Risa Polansky on July 3, 2008
By Risa Polansky
Revenues from a hotel and mixed-use project proposed for the Jackson Health System campus downtown could help resuscitate Jackson from the funding constraints that threaten its open-door mission, proponents say.
Creating an area community redevelopment agency that would capture property tax revenue from neighborhood developments to benefit the community and Jackson is another possibility aimed in part at keeping alive the public hospital’s mission to serve all.
The concepts are not being planned in tandem, "but they could certainly work toward mutually benefiting each other," said Marvin O’Quinn, president and chief executive officer of Jackson Health System.
The Jackson Memorial Foundation, Jackson’s private fundraising arm, is proposing to develop the hotel and retail project along with the University of Miami on about six acres of Miami-Dade County land on Northwest 12th Avenue.
Under the proposal — which would require final Public Health Trust and Miami-Dade County Commission approval — the foundation would lease hospital land from Miami-Dade County and in turn sublease it to a private developer at market rates.
"That could be a million (dollars) or two a year just to lease the land," said Roland Rodriguez, foundation president and chief executive officer, saying that "the hospital and the county take no risk at all."
Rent would go to the foundation, which funnels its funds to Jackson.
And assuming the private hotel would pay property taxes though it would be built on public land, it would also make money for the proposed redevelopment agency.
A community redevelopment agency generates funding by capping the value of real property within its bounds and collecting the tax revenue generated above the capped value to fund area improvements.
Both Mr. Rodriguez and Mr. O’Quinn said they believed the hotel would be taxed but were not certain.
A county spokesman said it would depend on the final deal.
The hotel plan is not tied to the redevelopment agency idea, said County Commissioner Javier Souto, who proposed the initiative.
But he said he believes the development would be a plus for the area.
"I think that’s so good — it’s needed," he said. "Anything that helps to keep that hospital going, in operation, and helps the people in the county, it’s OK with me."
Jackson faces a $200 million budget gap this year.
Mr. O’Quinn told county commissioners last week he believes it can be bridged, but that future shortfalls could mean the hospital would have to change its mission absent more funding.
The proposed project would aid the hospital in several ways, he said this week.
The hotel would serve the out-of-town patients — namely international — that travel to Miami for healthcare at Jackson.
It would not only provide a place for families to stay nearby, but would also allow patients to check out of the hospital earlier and remain nearby for follow-up visits after procedures such as transplants, freeing much-needed beds, Mr. O’Quinn said.
Agreed Mr. Rodriguez, "it actually saves the hospital tons of money."
The university was already considering a similar concept, he said, with the aim of building a facility to house its hundreds of annual medical conferences.
A hotel and conference center on the hospital campus would provide accommodations to out-of-town attendees and allow local physicians to attend the events but remain close to their patients at the hospital.
Both the trust and the university would also receive a portion of the hotel’s proceeds, Mr. Rodriguez said, though the university would allow all rent be paid to the foundation, benefiting the hospital.
"Their (UM’s) main interest is they really need this conference facility, and they really need this hotel for their private patients," he said.
And the university would bring development expertise into the mix.
The project as proposed would include 350-500 hotel rooms at up to three price points, from low to luxury.
Ballrooms, boardrooms, meeting rooms and an auditorium would be about 25,140 square feet, according to the proposal.
The hotel would include a spa, health club and patient lounge, as well as 2,250 square feet of retail space.
A neighboring retail project could include a 40,000-square-foot grocery store — potentially a Whole Foods, the proposal says — a 15,000-square-foot drugstore, 40,000 square feet of restaurants, and service establishments such as a dry cleaner, a daycare center, a wellness center and a 680-car garage.
The project also calls for demolishing and rebuilding the existing, aging campus rehabilitation facility and building an 18,000-square-foot Ronald McDonald House, a charitable organization aiding children.
The foundation would be landlord and owner and would "very likely" operate the retail, Mr. Rodriguez said.
The proposal targets October to secure a hotel developer or hotel brand, with the sub-lease to be set by December.
The complex would "improve the overall ambiance of the campus and the ambiance of the community," Mr. O’Quinn said.
Jackson would pay "limited developmental costs" in planning the project, he said, such as for a title search and land appraisal.
But, in the end, it would mean more money for the struggling hospital.
"This is one of any number of initiatives that we’re going to be looking at over time," Mr. O’Quinn said, "designed to help us carry out our mission."