,March30, 1977

The Honorable John Lawhon District and County Attorney BOX 718 Denton+Texas 76201 Opinion No. H-966

Re,:Authority of CityCounty Hospital Board to., lease part of hospital grounds for construction ofmedical office building by private individuals;

Dear Mr. Lawhon:

You have requested our opinion regarding the authority of theDenton City-County Hospital Board to ,&easeiand to,~ private persons for construction of amedical office building. Specifically, you ask:

Whether or not the City-County,Hospitai Board may lease aportion of the hospital grounds to 'anindividual or corporation for
amedical-professional building, with a; provision for reversion of the premises and building.to the board~at.the:conclusion of the lease period.

The proposed building would be'~adjacentto thehospital and connected to itby abridge at each level. The City-County Hospital Board would lease the land ona long term lease, and private persons wo,uldbe,responsible for financing, constructing, andmanaging thebuilding.. On completion of the lease, title to',thebuilding would revert to the CityCounty Hospital Board. .TheBoard would not spend,any public funds or assume any liabilities.

'The Denton City-County Hospital Board,was .createdunder article 4494i-1, V.T.C.S. SeeAtto,rney -, General Opinion M762 .(1970). ThenHospital Board constitutes a "joint agent" of the,county and city forhospital purposes. V~.T.C.S.art. 4494i-1, 6 2. At present, title,to.the,hospita&,~grounds remains in the~cityand county, but .section5 of article

p. 4026 ~..The Honorable John Lawhon -page 2 (H-966)

4494i-1 authorizes the city and county to convey the hospital and the associated real property to the Hospital Board. The Board may lease property, subject to the approval of the commissioners court and governing body of the city. V.T.C.S. art. 4494i-1, 59 4, 5. The city and county may thereby assure themselves that the Board inmaking the lease has acted "solely for [their] joint benefit." V.T.C.S. art. 4494i-1, 9 2. pital purposes." The Hospital Board must act "for hos1d:We believe itwill act for hospital purposes if it arranges a lease that upon termination provides themwith amedical facility adjoining the hospital, and in the interim benefits hospital patients. See Sullivan
v.Andrews Count m74, writ re

-T-# 517 S.W.2d 410 (Tex.Civ.App.- El Paso n.r.e.). Consequently, article 4494i-1, V.T.C.S., authorizes the Board tomake the proposed lease.

The ~1eas.e

of hospital grounds alsomust comply with article 3, section 52of the Texas Contitution, which prohibits any county or city from granting any "publicmoney or thing of value inaid of, or to any individual, association or corporation whatsoever

. . . ."The city or county cannot accomplish through its agent something the Constitution forbids it to do. SeeAttorney General Opinion C-517 (1965). Therefore, s Denton City-County Hospital Board may lease hospital property only to accomplish a public purpose, and the lessee must pay an adequate consideration for use of the property. Sullivan v.Andrews County, supra; Attorney General Opinion H-777 n976).n Sullivan v. Andrews County, the court found that the county could constitutionally lease todoctors space inamedical office building adjoining the hospital where the evidence showed that hospital patients would benefit from the closeness and ready availability of the treating physicians. YOU have not informed us about the terms of the proposed lease,
sowe cannot determine as amatter of lawwhether itwould accomplish this or an analogous public purpose. In drawing up and approving the lease, theHospital Board, city government, and county commissioners should be certain that the lc-esewill serve apublic purpose and include sufficient controls so that the public purpose is actually accomplished. SeeAttorney General Opinion H-445 (1974). The rent should beset so that together with the reversion of the building at the end of~thelease, the Hospital Board receives adequate consideration for the use of itsproperty. See Attorney General Opinions H-912, H-777 (1976);H-445 (1974). If these requirements are complied with, the proposed lease will not violate article 3, section 52of the Constitution.

P. 4027The Honorable John Lawhon -page 3 (H-966)

SUMMARY

Article 44941-1, V.T.C.S. authorizes the City-County Hospital Board to lease'land adjacent to the hospital for construction of amedical office building by private individuals. Article 3, section 52requires that the lease serve apublic purpose and provide for payment of adequate rentals.

APPROVED: **ttorney** General of Texas

Opinion Committee

p. 4028