In a major real estate move announced Wednesday, the University of Utah confirmed it’s expanding its healthcare arm with another medical campus planned for a coveted corner of Salt Lake County.

The new campus is set to be built at the Point of the Mountain, a much-anticipated development in Draper that has been dubbed “The Point.” The rapidly growing area west of Interstate 15 once housed the state prison but is now considered prime real estate.

Progress has so far been slow-moving. But the announcement Wednesday is likely to be a major catalyst.

The U.’s board of trustees — which oversees the flagship school and its adjoining medical enterprises — took the initial step at its regular monthly board meeting of approving the land purchase: 46 acres for $43.5 million.

Outside of that, the discussion was a brief three minutes that ended with a unanimous vote but no comment from board members. Only Bob Carter, the U.’s healthcare CEO, spoke. His presentation listed it as “an academic healthcare ecosystem.”

“The idea here is to bring care closer to home for those in the southern part of the valley,” he said.

A meeting of the Point of the Mountain State Land Authority Board that started just minutes after the U.’s board meeting ended Wednesday morning provided more details, including that the campus would include a full-scale hospital.

Board members called the deal — in negotiation for at least six months — a historic step in the state’s mixed-use development of the former prison site, which is one of the largest public projects of its kind in Utah history.

“With the expected population growth at The Point, both on our site of 600 acres and in surrounding communities, the need for a world-class facility to deliver healthcare services to Utahns is extremely important,” said the authority’s co-chair, state Rep. Jordan Teuscher, R-South Jordan,

Authority co-chair Lowry Snow, a former state senator, called it “a win-win situation, not only for The Point, but also for the state of Utah.”

Details on what is planned

An attorney for the land authority said the deal contemplated a 200,000-square-foot medical facility as part of a 46-acre medical campus, which would include helicopter operations.

U. officials anticipate launching into the development within five to 10 years, according to lawyer Kerry Owens, with Parsons Behle & Latimer.

“It’s a complicated building,” Owens told the authority board. “It’s not like an office building, so the design and all those processes will take them time before they can start construction.”

Over that timeframe, he added, the U. will also map the logistics of migrating certain facilities and services to the Draper location from its campus in Salt Lake City.

Later in the day, the authority issued a formal statement on the deal.

“This agreement,” it read, “represents a significant milestone in advancing the vision established by the Utah Legislature for The Point: a vibrant mixed-use community centered on innovation, economic opportunity, quality of life, and long-term value for the people of Utah.”

Departing from The Point’s initial vision

Speaking to the land authority Wednesday, Draper mayor and board member Troy Walker noted that selling pieces of the state-owned site was not part of its original vision for The Point, though he called it “an exciting project.”

“It truly is a good investment for the state,” Walker said of the land sale. “We’re selling it to a well-known nonprofit that operates a world-class facility, but I do think it is changing the concept of The Point.”

Prior land-use projects for The Point have been predicated on ground leases signed by tenants who would then develop the land, with the state providing infrastructure such as electrical, water, sewer and broadband internet access.

The purchase agreement approved on Wednesday departs from that, but would give the land authority first option should U. decide to sell portions of the land at a later date.

Longtime authority board member and state Sen. Jerry Stevenson, R-Layton, noted that the sale only represented about 6% of the land the state owns at The Point and said the U. project was likely to catalyze development of the rest of the site.

“I can’t think of a better owner to have next door to us,” Stevenson said. “This is probably the best of all worlds, what we’re doing here.”

It’s not the first time the land authority has pivoted with the project. Last year, officials started considering whether to include more for-sale homes built by private contractors at The Point than what was in the original plan.

That announcement came as the development has been competing against other huge, glitzier and faster-moving projects in the private sector.

Prior to the addition from the U., a $100 million entertainment venue was also announced as the anchor to the project’s first phase.

‘Strategic for U. Health’

During his presentation at the U., Carter noted that the Draper site will be located in between the U.’s other recent expansions, with a new cancer care center in Utah County’s Vineyard set to open in 2029 and a new hospital in Salt Lake County’s West Valley City opening in 2028.

After the meeting, Ischa Jensen, the associate executive director of system planning for University of Utah Health, said more details would be shared at a June 25 announcement hosted by Utah Gov. Spencer Cox. She deferred most questions to that day, including construction costs and when exactly the new Draper health campus is expected to break ground.

Jensen did confirm, though, that the funds for purchasing the land are coming from U. Health’s budget and not legislative appropriations.

“The opportunity to go to The Point is strategic for U. Health,” she noted.

In a short additional statement, the U. confirmed the purchase and proposed healthcare campus and similarly pointed to “a ceremonial signing of the Purchase and Sale Agreement on Thursday, June 25, at the Utah State Capitol Gold Room.”

Cox in a comment Wednesday also called the new development “a significant milestone.”

“The University of Utah’s investment will expand access to healthcare, support research and innovation, and create new economic opportunities in life sciences, one of Utah’s fastest-growing industries.”

The governor added that it aligns with his vision for The Point, a place where he intends Utah “tackles big challenges and seizes big opportunities.”

How this fits with U. Health finances

During the trustees meeting Wednesday, U. Health separately discussed its budget, which is ending the current fiscal year at the close of this month with $4.6 billion in annual operating revenue.

The system has spent $4.3 billion in expenses and is ending the year with $303 million in gains.

One barrier to seeing that number grow, said Charlton Park, chief financial officer and chief analytics officer of the University of Utah Hospitals and Clinics, is capacity constraints.

The new health campus at The Point is one possible answer to that.

Carter didn’t address that during his remarks, but the screen behind him for his presentation noted: “Growth is imperative. Proactive expansion is essential to meet future healthcare demands and sustain long-term growth across U. Health’s clinical, academic and research missions.”