University Health Palo Alto Marks New Construction Milestone as Interior Build-Outs Begin
University Health is taking another significant step in its ambitious South Side expansion with the upcoming interior build-out of the University Health Palo Alto Medical Office Building, a cornerstone of the health system’s growing 68-acre campus on S. Zarzamora Street in San Antonio.
Starting in early April 2026, and continuing through the end of November 2026, construction crews will begin transforming the 2nd, 3rd, and 4th floors of the medical office building into fully equipped clinic suites spanning over 30,770 square feet. This $11.75 million project supports the broader vision of increasing access to quality health care in one of Bexar County’s fastest-growing—and historically underserved—areas.
The build-out comes on the heels of the successful November 2025 opening of University Health Vida, a multi-specialty primary care center and home to the University Health Institute for Public Health. The medical office building will complement the highly anticipated University Health Palo Alto Hospital, currently under construction next door, which is scheduled to open in 2027.
A Historic Expansion to Meet Community Needs
This latest interior construction phase is part of University Health’s Capital Improvement Program, the largest in its more than 100-year history. The program includes two state-of-the-art community hospitals—Palo Alto and Retama—and two new multi-specialty health centers: University Health Vida and University Health Wheatley.
“This project is rooted in our mission: expanding access to health care, developing a dynamic community hospital and supporting public health on the South Side,” said Ed Banos, University Health CEO, during a topping-out ceremony in June 2025.
He emphasized how this expansion, situated near Texas A&M University–San Antonio and large employers like Toyota and JCB, is not just about improving health outcomes—but about stimulating long-term economic growth. “We’re doing more than providing care—we’re creating an economic engine that fuels opportunity, drives innovation, and builds momentum for generations to come.”
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Anchoring a Health Care and Economic Hub
Once complete, the University Health Palo Alto Hospital will house a 24/7 Emergency Department, labor and delivery unit, NICU, radiology and lab services, inpatient units, and operating rooms. Initially opening with 166 beds, the hospital is designed to expand to 286 beds as the area continues to grow. It is physically connected to the medical office building now entering its build-out phase—creating seamless access between specialty care and hospital services.
Bexar County Precinct 1 Commissioner Rebeca Clay-Flores, a strong advocate for the project, celebrated what it means for residents. “We’re not just building a hospital. We are building opportunities for better access to care,” she said. “Many of my constituents who may tend to skip their appointments will no longer do that. So together, we are saving lives.”
The strategic location—near new residential developments like VIDA—also ensures that the campus becomes a long-term fixture in the daily lives of South Side families, offering both health care and employment opportunities.
Collaboration with Texas A&M to Advance Public Health
The expansion is closely tied to a growing academic presence as well. A $45 million Texas A&M College of Education and Public Health is planned nearby, made possible through a partnership with University Health. This collaboration will increase training opportunities for medical professionals and broaden access to care in the region.
John Sharp, chancellor of The Texas A&M University System, spoke to the transformative nature of the initiative, saying, “Texas A&M–San Antonio was created to serve the people of Texas, and this is exactly what this hospital and our partnership with them will do.”
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A Vision for the Future of the South Side
As the build-out of the clinic suites progresses, local leaders continue to praise the foresight that made the Palo Alto campus a reality.
“University Health saw this coming even before the pandemic, with increased Emergency Room visits and hospitalizations that are continuing to soar,” said Bexar County Judge Peter Sakai. “Through strategic planning, good financial management and a commitment to serving this growing community, they made plans to grow at a historic pace and are now executing on those plans as quickly as they can.”
The interior renovations mark more than a construction milestone—they reflect a deep commitment to reshaping the health care landscape for San Antonio’s South Side.
Tiffany Krenek has been on the My Neighborhood News team since August 2021. She is passionate about curating and sharing content that enriches the lives of our readers in a personal, meaningful way. A loving mother and wife, Tiffany and her family live in the West Houston/Cypress region.
