New hospital gets $737k pre-development deal in Sherman
A new hospital may be on the horizon for south Sherman in the near future.
The Sherman City Council approved a series of pre-development agreements this week, which were made between the city, Crossroads Hospital Development LLC, Ivy Hotel Group and CFP Sherman, for the creation of a new $150 million, 80-bed acute care hospital.
These agreements dedicate of up to $737,000 toward work in the early stages of the project.
The move comes as city leaders in recent years have worked to court a new hospital in what is becoming the city's next big growth area along the FM 1417 corridor.
"The city has been working over the past several years for someone to partner with to bring a state-of-the-art medical facility to Sherman," Sherman Community and Support Services Manager Nate Strauch said. "We have met with a number of possible companies that would be interested in doing that and we feel we have a really strong group together for the city to help participate in laying the groundwork for a hospital facility at the Crossroads development."
City Manager Robby Hefton stressed that the project is in its early phases of development and the project is mostly conceptual in nature. Rather than refer to it as in development, Hefton said the project was in its pre-development phase.
Hefton said a non-profit was created to oversee the project following meetings with representatives with Ivy Hotel Group. If the project is completed, this non-profit will maintain ownership of the hospital, with any profits going back into the organization.
"Several people with the Ivy Hotel Group approach the city about about a proposed development related to this hospital," he said.
This early phase will include studies and market to research the viability of the project, along with other assessments to determine what is needed in Sherman. City officials said the scope of the project could change due to this research.
For its part in the project, Hefton said the city is offering to loan the group between $525,000 and $737,500. These funds will help finance these early stages and lead to plans and assessments for the project.
These funds will be repaid if the project moves forward using bonds that are issued by the non-profit and its partners. During Monday's meeting, representatives for the developers and city officials said the city's stake in these bonds will be zero.
"It will be in big bold black letters on 37 of the 180 pages that the city has no obligations," said Bryan Garcia, representing the development team. Garcia added that the team is not seeking tax cuts or rebates from the city.
This reinforced the city's message that it had no interest in owning and operating a city hospital.
If the team does not more forward with the project, the city will receive the work that was conducted, which it could then take to other developers in hopes of finding interest.
Strauch said the project could be a significant boon for the city and the Crossroads Development. Strauch referred to the project as a potential anchor for future retail and medical development in the area.
If built, the hospital would likely be located between W. Travis and Stone Creek Golf Course. This would put it along other medical uses in the area, including a free-standing emergency room and dialysis clinic.
"We anticipate that there will be significant medical applications and you already see that with the establishment of the free-standing ER and several medical office buildings, including one that hasn't broken ground but has been approved."