Featured, from left: Rep. Terry Canales, D-Edinburg, and Leonel Vela, M.D., Senior Associate Dean for Student Affairs at the University of Texas Rio Grande Valley School of Medicine, on Wednesday, April 26, 2016, during a tour of the $54 million Medical Education Building in Edinburg.

Photograph By ALEX RÍOS

A major boost to the area economy in underway as a result of an estimated $172.4 million in direct expenditures from the ongoing construction of the University of Texas Rio Grande Valley School of Medicine in Edinburg and the planned establishment of the Doctors Hospital at Renaissance Medical Research Facility in neighboring McAllen, Rep. Terry Canales, D-Edinburg, has announced. “The total economic impact of the UTRGV medical school in the Rio Grande Valley is significant, according to an analysis by the university provided at my request, and this is just the beginning,” said the House District 40 lawmaker. Through the multiplier effect, the $172.4 million in direct spending creates 2,578 jobs, generates $75.1 million in labor income and adds $100.6 million in value added, for a total economic impact of $261.8 million, noted an economic analysis prepared by the university. Spending associated with the UTRGV medical school generates $7.3 million in state and local tax and $12.9 million in federal tax.

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UTRGV School of Medicine, DHR Medical Research Facility part of $172.4 million in direct economic impact for local area, says Rep. Canales

By DAVID A. DÍAZ
[email protected]

Canales, a co-sponsor of the state law that in 2013 created the UTRGV School of Medicine, released preliminary data he received from UTRGV leaders, featuring Leonel Vela, M.D., Senior Associate Dean for Student Affairs at the UTRGV School of Medicine, during a legislative tour on Wednesday, April 26, 2016 of the $54 million Medical Education Building in Edinburg.

“The total economic impact of the UTRGV medical school in the Rio Grande Valley is significant, according to an analysis by the university provided at my request, and this is just the beginning,” said the House District 40 lawmaker. “Just as important, having a full-fledged UT medical school in the Valley sends the undeniable message, both here at home and far beyond, that South Texas continues to grow as a center of higher education, jobs-creation, and health care, which help make for a high quality of life.”

Agustín García, Jr., Executive Director for the Edinburg Economic Development Corporation, at the invitation of Canales, also participated in the tour of the Medical Education Building.

In addition to Vela, who is the founding Dean of the UT Regional Academic Health Centers in Edinburg and Harlingen, Canales and García were joined during the afternoon session by Sarah Williams-Blangero, Ph.D., who is the Director of the South Texas Diabetes & Obesity Institute, and Dr. John Ronnau, Senior Associate Dean of Interprofessional Education at the UTRGV School of Medicine.

That far-reaching economic impact for the area economy is based on the following expenditures:

• $54 million – Construction of the UTRGV Medical Education Building in Edinburg:
• $40 million – Construction of the DHR Medical Research Facility in McAllen;
• $69.6 million – UTRGV School of Medicine operations spending;
• $1.1 million – Spending by 54 students while enrolled at the UTRGV School of Medicine;
• $4.7 million – Spending by 100 medical residents while enrolled at the UTRGV School of Medicine; and
• $3 million – Spending by 50 new new doctors who stay and practice medicine in the Rio Grande Valley after they graduate from medical school.

“MULTIPLIER EFFECT” BOOSTS ECONOMIC IMPACT TO MORE THAN $260 MILLION

“The result of these impressive expenditures have another beneficial impact, based on what is known as the ‘multiplier effect’, on the area economy,” Canales added.

The multiplier effect is a concept in economics that describes how an injection into an economy, such as an increase in government spending, creates a ripple effect, which increases employment and the output of goods and services in the economy (http://www.romeconomics.com/multiplier-effect-explained/).

“Through the multiplier effect, the $172.4 million in direct spending creates 2,578 jobs, generates $75.1 million in labor income and adds $100.6 million in value added, for a total economic impact of $261.8 million,” noted the economic analysis prepared by the university. “Spending associated with the UTRGV medical school generates $7.3 million in state and local tax and $12.9 million in federal tax.”

Prior predictions about the positive economic influences of the UTRGV School of Medicine, which also includes a major campus in Harlingen, where third and fourth-year medical school students attend, are already being exceeded, said former Rep. Verónica Gonzáles, D-McAllen, who serves as UTRGV’s Vice President for Governmental and Community Relations.

“Back in October 2014, at the request of the UT System Board of Regents, an economic impact study was conducted by TXP, Inc., to assess the direct economic impact of the UTRGV School of Medicine on the Rio Grande Valley,” Gonzáles noted during the April 26, 2016 legislative tour for Canales. “Assumptions were made for a first phase, to be realized over approximately 10 years, of 200 students and 108 medical residents, supported by 96 full-time faculty and 134 staff. But today, we expect to be at 200 students within five years.”

For example, she reported, “the UTRGV School of Medicine is already at 69 medical residents and will be at 100 by July 2016. We currently have 70 full-time faculty and 120 staff. By July, we hope to have 118 full-time faculty and added staff.”

A medical resident is a physician who practices medicine, usually in a hospital or clinic under the direct or indirect supervision of an attending physician. Successful completion of a residency program is a requirement to obtaining an unrestricted license to practice medicine in many jurisdictions. Residency training may be followed by fellowship or “sub-specialty” training (https://en.wikipedia.org/wiki/Residency_(medicine).

DHR MEDICAL RESEARCH FACILITY IN MCALLEN TO ALSO BENEFIT EDINBURG, PHARR

Canales, whose legislative district includes McAllen and Pharr, said the planned DHR Medical Research Facility, located by Owassa Road in McAllen, also will have a direct benefit for Edinburg and Pharr.

“There is a saying that the only thing that separates Edinburg, McAllen and Pharr from each other is a street – in this case, Owassa Road, which is a key borderline that unites these three cities,” he observed. “This is a perfect illustration of how all of the Valley, and in this case, Edinburg, McAllen and Pharr, will share in the benefits of the DHR Medical Research Facility in McAllen.”

The first phase of the DHR Medical Research Facility in McAllen will involve a 189,000-square-foot complex, of which the UTRGV School of Medicine will lease at least 100,000 square feet. The leased space will showcase microscopy and electron and optical imaging equipment, and house 20 to 25 UTRGV senior level principal investigators along with core facilities personnel, technicians and staff.

Discussions are also underway for future phases, including a vivarium, a bio safety lab 3 to conduct infectious disease research, a forensic institute, an orthopedic institute, and an innovation center, tone used for scaffolding, tissue engineering and incubator, according to UTRGV leaders.

As for the new, state-of-the-art UTRGV Medical Education Building, located in the heart of the Edinburg Campus, it will be more than a bricks-and-mortar structure, Gail Fagan, a Senior Writer for UTRGV, stated in a February 22, 2016 update to the region.

“By bringing together world-class faculty and eager new students – many from the Rio Grande Valley – it soon will join UTRGV medical facilities across the Valley to produce highly educated, culturally attuned doctors to serve the region, where the ratio of doctors to patients is barely half the national average and significantly lower than the state average,” she reported.

MEDICAL EDUCATION BUILDING IN EDINBURG IS “FANTABULOUS”

Also according to Fagan:

• The 88,260 gross-square-foot structure, now close to completion, is a two-building facility adjacent to the Edinburg Regional Academic Health Center (ERAHC). The facility includes one three-story building (the west wing) that houses large and small medical classrooms, conference rooms, clinical simulation and digital anatomy labs, faculty offices, and dean’s office and student services suites;

• A separate one-story building (the east wing) houses a student education center/library, auditorium, group study rooms and student lounge. An exterior plaza and covered walkways connect open breezeways that join the two structures;

• On a recent hard hat tour, Dr. Gabriel A. de Erausquin, M.D., Ph.D., M.Sc., founding Chair of the School of Medicine’s Department of Psychiatry and Neurology, said the building, and what it offers, are “beautiful. From the library to the lounge to the simulation center and classrooms, everything is built for and around the learning experiences of students, which is what we want.”; and

• Dr. Francisco Fernández, inaugural Dean of the School of Medicine, describes the building as “‘’fantabulous’. That is a combination of fantastic and fabulous,” Fernández, who will have an office on the top floor of the west wing. “I can’t wait until it is open and we have the first student walk through the door. I will be out there greeting every single one.”

Construction on the $54 million building began in July 2014 and is substantially complete as of May 2, 2016. The first medical school classes will be held there in fall 2016.

The University of Texas Rio Grande Valley was created by the Texas Legislature in 2013 in a historic move that brought together the resources and assets of UT Brownsville and UT Pan American and, for the first time, makes it possible for residents of the Rio Grande Valley to benefit from the Permanent University Fund—a public endowment contributing support to the University of Texas System and the Texas A&M University System.

Senate Bill 24 – authored by Sen. Juan “Chuy” Hinojosa, D-McAllen, and sponsored by Rep. René Oliveira, D-Brownsville, also authorized the creation of the UTRGV School of Medicine, which included making the facilities of the UT Regional Academic Health Centers in Edinburg and Harlingen part of the medical school.

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Gail Fagan contributed to this story. Rep. Terry Canales, D-Edinburg, represents House District 40 in Hidalgo County. HD 4o includes portions or all of Edinburg, Elsa, Faysville, La Blanca, Linn, Lópezville, McAllen, Pharr, San Carlos and Weslaco. He may be reached at his House District Office in Edinburg at (956) 383-0860 or at the Capitol at (512) 463-0426.