St. David's hospital in Kyle will be major employer in 155-acre mixed-use hub

Aerial rendering of project
Dec 20, 2023
Justin Sayers

The long-anticipated St. David's HealthCare hospital in Kyle is planned as part of a 155-acre mixed-use project that could include a hotel and conference center, a swath of retail and office space and nearly 2,000 residential units.

San Antonio-based Rick Sheldon Real Estate LLC secured a slew of agreements from the Kyle City Council on Dec. 19 for the project in the fast-growing suburb south of downtown Austin. It's adjacent to the H-E-B grocery store near Farm to Market Road 1626 and Marketplace Ave.

St. David's officials previously said they signed a letter of intent for a 65-acre tract, where the company plans to initially build a 160,000-square-foot, full-service acute care hospital. Details could shift once the land is purchased, but plans call for a 24-hour emergency department, inpatient and outpatient surgery, critical care capabilities, robotic services and maternity and newborn services. It's expected to create about 200 full-time jobs and was said to be a capital investment of $300 million.

But that's only a part of what could eventually crop up on the site. Preliminary plans in development agreements passed by Council call for the site to be split into two tracts: The Lake Park tract, which would include vertical mixed-use components, including a 430-room hotel, roughly 300,000 square feet of retail space, 600,000 square feet of office space and 1,950 multifamily units both for sale or rent; and the hospital tract, which would eventually include a seven-floor hospital with 550 beds totaling 693,000 square feet and four medical offices totaling 80,000 square feet, plus a parking garage.

As part of the agreement, the owners would donate parts of the site to be used for public space and infrastructure, including park space with natural waterways, a water tank and road extensions and widening. The agreement also has an option to turn the hospital site into more mixed-use space should the hospital not be constructed, although all indications are that it's on track. The site connects to the city's future Vybe Trail as well as other retail and housing options.

Kyle Mayor Travis Mitchell said during the Dec. 19 meeting that the development checks all the boxes they are looking for in the fact that it has appropriate density, green space and a mixture of different uses. He commended the owner of the property for rejecting approximately 30 offers for just apartment or warehousing space and instead waiting to bring something he said rivals other mixed-use projects in the city like the Brick-and-Mortar District.

"It's going to be the neatest section of Vybe in the whole city, in my opinion," Mitchell said.

Kyle is about 20 miles south of Austin and had an estimated 2022 population of about 57,500 — about 11% year-over-year growth that ranked it the third-fastest city in the country among those with a population of at least 50,000.

That population growth has attracted a bunch of new employers and large-scale development, like more retail and mixed-use projects. Other notable companies that are opening in the space include Sovereign Flavors Inc. and Tesla Inc. Other retail projects include Costco Wholesale Corp., Sprouts Farmers Market and the $240 million Vybe Park.

Originally announced in February 2022, St. David's detailed a plan to spend about $953 million on new facilities across the Austin metro and create at least 900 jobs. At the time, it was framed as the largest one-time capital investment for St. David's since its inception in 1996.

St. David’s HealthCare is a partnership between Nashville-based HCA Healthcare Inc. (NYSE: HCA) and two local nonprofits, St. David’s Foundation and Georgetown Health Foundation. Overall, St. David's has eight hospitals and more than 132 locations throughout Central Texas. It's a major employer, with 11,484 workers in the Austin area as of earlier this year.

CEO David Huffstutler told the ABJ earlier this year the company is purposely targeting fast-growing areas where they don't already have a footprint. That will help his team better service the growth around Central Texas while addressing any capacity concerns at existing sites.

"We're trying to make sure that we are accommodating the growth and able to care and service patients as these areas grow," he said. "Our capital plans include... making sure we are deployed and distributed in the parts of the market where we currently don't have access."

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