Bexar County plans to use some of its limited economic development tools to help four Baptist Health System hospitals expand their services in the community.
The move follows Texas Vista Medical Center’s closure in May after four decades of operation. That change left roughly half a million residents on the South Side with access to a single 110-bed hospital in the immediate area, Mission Trail Baptist Hospital.
Citing the blow delivered to public health by Texas Vista’s closure, Bexar County officials say they plan to use the Texas Enterprise Zone Program (TEZ) to offer some existing local hospitals a refund of their state sales and use tax.
Doing so would offer four Baptist Health System hospitals up to $1.25 million in tax rebates over the course of five years if they meet certain hiring and employment criteria, according to the county.
“Economic development is not just recruitment of companies, it’s the retention and expansion,” Bexar County’s Executive Director of Economic and Community Development David Marquez told members of the San Antonio City Council on Thursday.
“This is a retention-type of project for us,” said Marquez. “… We’ve seen already the South Side lose a facility there, certainly the county is concerned about that.”
The TEZ Program is aimed primarily at creating jobs and luring private investment to economically distressed areas of the state.
The city and county are each allowed to nominate nine projects every two years to the state, which ultimately approves selections for the TEZ Program.
In addition to Mission Trail Baptist Hospital, the potential designees include Baptist Medical Center, located downtown; Northeast Baptist Hospital, located off Loop 410; and North Central Baptist Hospital, located north of Loop 1604. These hospitals are among six San Antonio medical facilities owned by the national group Tenet Healthcare Corporation, under a subsidiary, VHS San Antonio Partners.
The hospitals are seeking nominations from the county, a move that first requires an interlocal agreement with the City of San Antonio.
City Council voted in favor of the agreement on Thursday, while County Commissioners are expected to take it up July 11.
Baptist Health currently employs roughly 3,400 full-time and 833 part-time employees in San Antonio, according to the city. It recently hired 325 employees from the now-shuttered Texas Vista Medical Center.
As part of the agreement with the county, Baptist Health would add another 80 full-time positions. The TEZ program would require the company to focus on certain hiring criteria, such as hiring veterans or people who are economically disadvantaged.
The deal comes as the four hospitals are scheduled to undergo roughly $55 million worth of capitol improvements.
The Mission Trail Baptist Hospital aims to expand its neuroscience and cardiovascular program, while the North Central Baptist Hospital plans to grow its wound care center and offer enhanced women’s services, according to a presentation from the city’s Economic Development Department.
“Companies that are making this type of investment are aware… through consultants or their own internal staff, that this program is available to the state, so they approach us looking for a nomination,” Marquez said.
While members of the City Council have expressed deep concern about the loss of Texas Vista, some were skeptical about directing tax incentives to Baptist Health.
Councilman Marc Whyte (D10) suggested that in choosing the hospitals for the county’s limited nominations, it may have struck an agreement that missed the mark on job creation.
“Obviously we all want new jobs here. … Could it have been a more robust package?” Whyte asked county officials.
Marquez agreed that TEZ projects often come with more new jobs, but argued that the county’s overall economic development goals have to consider the broader value a company is bringing to a community.
“When companies approach us, we consider them on the merits,” Marquez said. “In this case, it was pretty clear that Baptist Health is an important employer in our community, with services in parts of town where they’re needed.”
Helping the hospital systems “stay strong and profitable” so they can provide service for the community “is the primary driver behind our support for this,” he added.
Councilwoman Teri Castillo (D5) pointed out that the interlocal agreement includes potential for lots of other local incentives, such as low-interest loans, zoning waivers and utility assistance. She sought commitments from city staff to withhold any additional incentives until the council had an opportunity to review the agreement.
“My hope is that … we won’t sell the farm with these [interlocal agreements] … because we haven’t had an opportunity to fully discuss it,” Castillo said.
Brenda Hicks-Sorensen, the city’s Economic Development Department director, said the council would have to approve any additional incentives, though none were currently under consideration.
