28 Mar Dallas County narrowly passes $83M deal to sell old Parkland Hospital
Dallas County commissioners on Tuesday narrowly approved changes to an $83 million deal to sell the former Parkland Memorial Hospital campus, paving the way for the area to be turned into hotel rooms, apartments, offices and shops.
Commissioners John Wiley Price and Elba Garcia were not happy with the proposal and voted against it, but the deal passed 3-2.
"This is a great deal for the developer – it’s a bad deal for Parkland," Garcia said. "We could’ve done a better deal."
A preliminary plan for the 38-acre former Parkland Hospital campus shows a variety of uses.
The commissioners court had already voted in November to sell the 38 acre-property for $82 million, but Parkland officials came back with different terms. The hospital asked to allow the buyer, developer Sam Ware of Dreien Opportunity Partners, to pay $72 million up front and the remaining $10 million in installments over a year. The county would gain 10-percent interest on the installments and another $1.3 million added to the purchase price.
As part of the new deal, Parkland would also lease 560 parking spaces — spaces that employees are currently using on the property — for a rate of $3.75 per slot. That’s cheaper than the going market rate, at $5 a spot, and the other garages nearby, which charge $9, said Paul Leslie, Parkland general counsel.
"Walking through the economics, it’s a good deal for Parkland," Leslie said.
But Price and Garcia accused hospital officials of giving away too much. They argued Parkland should have negotiated for free parking until the entire sum was paid. They were also mad that hospital officials didn’t originally demand a guarantee for the payment plan. Price said it was only at his urging that the county suggested Parkland hold onto the title to the most valuable five-acre tract of land — worth at least $10 million — until the final bill is paid.
Price was also upset that other prospective buyers weren’t given the same opportunity at the new terms. The hospital said it had 377 firms nationwide initially express interest in the sale.
"If that would’ve been the deal you put on the street then fine," Price. "That wasn’t the deal you put on the street."
The Dallas County commissioners court narrowly passed the deal. (File photo by David Woo/The Dallas Morning News
In the end, County Judge Clay Jenkins and Commissioners Mike Cantrell and Theresa Daniel agreed the sale should go through.
Cantrell said he understood the developer’s position that parking spaces are an important revenue stream that allow the deal to work on his behalf.
"Us being able to negotiate after this deal is a benefit to the hospital," Cantrell said. "This was the best deal for taxpayers and Parkland."
Parkland plans to use the cash from the sale to construct a new clinic and parking garage on its current campus, which cost $1.3 billion and opened two years ago. Until that construction is finished, Parkland plans to pay the new property owner $1.5 million for clinical space and $500,000 for parking per year in a "lease-back" agreement.
The former campus — where President John F. Kennedy was rushed after being shot — houses more than a dozen buildings that were constructed starting in the mid-1950s.
The developer plans to redevelop the complex into senior housing, condos and more than 600 "micro apartments" — roughly 300 square-foot studios — that could house hospital workers at an affordable rate. Several small buildings in the center of the property will be razed to create a park.
Small buildings at the heart of the former medical campus are planned to be torn down for a park.
That mixed-use redevelopment of a former hospital campus follows a national trend happening in other cities such as Chicago, Knoxville, Tenn., and Boulder, Colo.
This project, however, is shaping up to be one of the country’s largest. Price said the redevelopment was expected to cost $220 million.