The Texas A&M University System on Thursday will announce plans to build a $550 million complex in the Texas Medical Center, its most ambitious attempt yet to establish a significant presence in the elite Houston hub of health institutions.
The complex will occupy 5.5 acres at the southern border of the main medical center campus and comprise an 18-story academic building for the specialized engineering medicine program on which Texas A&M and Houston Methodist are partnering; a 19-story student housing building; and a 30-story medical office building. All three will tout the A&M logo.
“This represents a major commitment by A&M to put its maroon stake in the ground and become a major player in the Texas Medical Center, to be in the middle of all that health science center activity,” said Greg Hartman, the Texas A&M system’s vice chancellor for strategic initiatives. “If you want to be a major health care player in this area, you’ve got to be in the Texas Medical Center.”
The project follows A&M’s 2018 commitment to build a research building as part of a mammoth Texas Medical Center campus known as TMC³. That project, which is aimed at biomedical innovation, will unite Baylor College of Medicine, the University of Texas Health Science Center at Houston, MD Anderson Cancer Center and Texas A&M in a rare TMC multi-institutional venture, to be located at Brays Bayou and Old Spanish Trail outside the main medical center campus.
William McKeon, president and CEO of the medical center, called the new project “really an important step for Texas A&M on our campus,” which is dominated by Baylor and UT academically. Texas A&M’s presence is mostly limited to its Institute of Biosciences and Technology, the third- and fourth-year clinical rotations of some of its College Station-based medical school students and the new so-called EnMed program, which focuses on devices to improve health care delivery. The program’s inaugural class began last July.
EnMed students complete the requirements for a master’s degree in engineering and a doctorate of medicine. They are required to invent new devices or processes before they graduate.
Texas A&M officials in late 2017 announced they’d closed on a $63 million purchase to acquire land on Holcombe near Main Street, plus the building that would house the EnMed program, then in planning. The complex, which will include green space between the three buildings, will be built on that land.
The project comes nearly three years after William McRaven, then chancellor of the UT System, retreated from a 300-plus-acre land purchase in Houston that drew strong opposition from state lawmakers and University of Houston boosters.
Texas A&M Chancellor John Sharp said this week system they anticipate no such opposition to their new project. He noted that system officials made sure to keep the appropriate political and academic leaders apprised of the project along the way.
The complex will be constructed through a public-private partnership in which state money — $145 million — pays for the land purchase and the renovation of the existing EnMed building; and the Houston-based Medistar Corporation pays the rest — $401 million — for the student housing and office buildings. Medistar won the contract to develop the new buildings through a bid process that attracted developers from Philadelphia, Chicago and elsewhere.
Sharp touted the benefits of using a public-private partnership to finance the project.
“The only state money in this whole deal is for the EnMed building and the purchase of the land,” he said. “The rest is all private money at risk by the developer.”
The residential building, which will have 572 units and 704 beds, will give top priority to Prairie View A&M nursing students, who number around 500, and Texas A&M medical students, who number about 75 (50 in clinical rotations, 25 in the EnMed program).
But students from other institutions will be able to fill open units, if available, a big need for a medical center with 60,000 students. McKeon noted the campus’ “real shortage of residential space for students.”
The building’s studio apartments will lease for $1,200 initially, around $300 less than similar market-rate units nearby, officials said. The rate will be locked in for five years and then has a cap on how much it can increase for the next five. Students will receive a preferred rate for parking as well.
Officials said Medistar will break ground on the building and parking garage this fall, hoping to open in summer 2022.
They also said the renovation of the EnMed building should be complete this fall and that Medistar likely will break ground on the medical office building in fall 2021 and complete it in summer 2023.
Texas A&M leaders said they envision doctors, researchers and companies spun off from medical center research efforts as tenants. The building will also have retail space.
The officials touted the collaboration that will come as a result of the project, but Rice University health care economist Vivian Ho warned there are no guarantees.
“It’s not like you build a building and magical stuff happens,” said Ho. “Those relationships take a long time to build, require a lot of trust. They’re very difficult.”
Texas A&M will lease a portion of the land to Medistar, which will make initial payments to the system of $500,000 for each of the first two years. Beginning in 2022, the annual lease payments will increase to $3.7 million.
As part of the deal, the Texas A&M system will sell its Alkek building at 2121 Holcombe to Medistar for $51 million. That building houses Texas A&M’s Institute of Biosciences and Technology, which will either remain at the location or be relocated to either the new campus or the TMC³.