EDINBURG — The council is asking the state to help two hospitals expand to the tune of more than $130 million.
Last month, Edinburg councilmen unanimously designated DHR Health’s proposed $76.8 million expansion as an enterprise project under the Texas Enterprise Zone Act. Then three weeks later, the council awarded the same designation to Edinburg Regional Medical Center, which is planning its own $57 million expansion.
The designation allows both hospitals to submit an application to a state program that helps businesses looking to expand or relocate to Texas seal the deal by providing financial incentives based on how much a business is going to invest and how many jobs it creates.
Council members stressed the designations do not impact the city’s budget, and instead called the city’s nominations to the state program a “win-win” for both Edinburg and the hospitals. If the applications are approved by the governor’s office, which manages what was described as a very competitive program, the businesses will be able to draw down funds from the state’s portion of the sales and use tax to expand.
“One of the best parts is that, as a city, you’re not providing city funds to the project,” Ramiro Garza, a former Edinburg city manager who is now a representative of DHR Health, told council members during a city meeting Nov. 17. “It’s through the state.”
Garza said that if the hospital receives the funds from the Texas Enterprise Zone Program to seal the deal, DHR Health will build approximately 144,000 square feet of new space and hire an additional 500 employees.
“So that will be the commitment,” he said about the hospital’s investment. “If they don’t do that, they don’t draw any benefit from the state.”
Edinburg’s designation does not guarantee the applications will be approved.
“It’s a very competitive process,” Garza said. “In fact, the state only allows about 105 designations through the two-year biennium for the state budget.”
And a community can only nominate four projects every two years, he added.
Council members noted that if the projects go through, it will mean a larger tax base for the city, which will in turn grow the city’s budget. The additional jobs will also have a positive impact on the local economy, Garza noted.
“Right now, the hospital has about 5,300 employees. About a third are Edinburg residents, so about 1,700 of those are Edinburg residents,” he said. “Now, the more than 5,000 (employees), as you know, they work here, so they consume here. Obviously they add to the economy. The new 500, they haven’t been hired yet, but … I know the hospital is more than willing to hire as many Edinburg residents. This is their home campus, and that’s the whole idea about this, right? It’s to encourage not only that new investment, but that employment.”
Edinburg Regional Medical Center said its project promises to retain more than 300 jobs and invest $57 million for “new and non-routine equipment and facility upgrades.”
“The hospital community here is growing rapidly. It’s creating jobs. It’s creating a buzz — not only here in the RGV, but the entire state of Texas — so I commend the job that you all do,” Edinburg Mayor Richard Molina told hospital executives. “People don’t realize that we need these beds… until you need it.”
Councilman David White also noted the role the healthcare centers are playing during the current pandemic.
“You know mayor, this might be a good time for us to thank this hospital, along with Edinburg (Regional) Hospital, on what they’ve done during this COVID pandemic,” White said. “I really appreciate what you do, what your staff does and the people who work with you… all of them do a heck of a job. God bless you.”
Councilman Gilbert Enriquez said he was glad the council was willing to support both businesses.
“I’m glad we’re being fair across the board. That’s a good thing,” he said.