Medical school faces deadline on lease agreement
STORY BY LISA ZAHNER (Week of October 16, 2025)
The Virginia-based medical school planning to branch out and train doctors in Vero Beach has until Nov. 7 to comply with the terms of its lease on a building owned by the Indian River Hospital District or face possible termination of its rental agreement.
District legal counsel Jennifer Peshke on Oct. 8 sent a letter to leaders of the Edward Via College of Osteopathic Medicine formally putting the tenant on notice.
“If this default is not cured within thirty (30) days of the date of this notice, IRCHD reserves the right to declare the Agreement terminated and to pursue any and all remedies available to it under the Agreement and applicable law,” Peshke wrote VCOM.
Should the hospital district terminate the lease, there’s a good chance VCOM would expand its ongoing talks with Indian River State College in St. Lucie County and Vero Beach could lose its bid for a medical school – and the promise of a pipeline of future primary care physicians for Indian River County.
This letter followed a July 29 warning reminding VCOM of its obligation to invest in major capital improvements to the building under the October 2024 lease. Over five years, VCOM had agreed to sink at least $5 million into the property in lieu of rent.
The July letter asked VCOM to submit a detailed plan for improvements to the building and meeting the prescribed timeline for opening a four-year medical school adjacent to Cleveland Clinic Indian River Hospital’s emergency Department by 2030. District trustees seemed inclined to amend VCOM’s lease terms, but VCOM had not requested any specific changes.
“VCOM responded on September 2, 2025, affirming its commitment to the Agreement but failing to provide any substantive plan or documentation demonstrating compliance with Section 4.e.” Peshke wrote.
VCOM, which has its main medical campus in Blacksburg, Va. plus satellite campuses in Spartanburg, S.C., Auburn, Ala., and Monroe, La., told Vero Beach 32963 that, due to changes in state law prioritizing Florida-based medical schools for residency and student training slots and funding, VCOM was no longer looking to open a fourth campus in Vero, but to establish a new medical school here.
That plan would be expected to take an extra five years, meaning the three-story leased building would not be needed for classroom training of medical students until probably 2035, not 2030 as once anticipated.
On Sept. 16 and Sept. 22, Peshke and district Executive Director Frank Isele reached out to VCOM attempting to elicit any details the medical school could provide about its challenges, to pass along to trustees, but no answer came. Staff also attempted to schedule a Zoom call with VCOM leaders, but as of Friday VCOM had failed to set up that virtual meeting.
“The first minimum capital investment of $1 million was due on or before September 30, 2025,” Peschke wrote. “As of the contractual deadline of September 30, 2025, VCOM has not made the required capital investment, nor has it provided any further information indicating how or when it intends to cure this deficiency. This failure constitutes a default under the Agreement.”
VCOM specializes in training doctors in family medicine, pediatrics, internal medicine, emergency medicine and obstetrics/gynecology with a focus on serving rural areas.
Cindy Rawlins, spokesman for VCOM, on Friday confirmed that medical school leaders are planning to travel to Vero this month to take meetings and deal with the situation.
“We don’t have a date set yet, but I will keep checking back to see if they set one,” Rawlins said.
When asked if VCOM intends to submit proposed amendments to the hospital district for consideration, Rawlins said on Friday, “I have been told final decisions have not been made.”
At its Sept. 18 business meeting the hospital district trustees discussed the situation and whether or not the building could be used by another organization or entity – even if only for a few years until VCOM needs the space for its Vero medical school.
Prior to entering into the lease with VCOM, the district rented the space out to the Visiting Nurse Association for its administrative offices. The building has been vacant for nearly two years and has begun to fall into disrepair from non-use.
VCOM currently pays for building’s maintenance, property taxes and utilities.
“We have had some communication from them, we need more communication from them, plain and simple,” Isele said of the staff’s position on the VCOM lease and the building.
Cleveland Clinic has first right of refusal on the building, so if VCOM defaulted, a first step would be checking to see if the hospital had a need for the three-story building on 5 acres. “We don’t have any interest, or you know, any takers at this time,” Isele said.