,March 30, 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 

of medical office building 

by private individuals; 

Dear Mr. Lawhon: 

You have requested our opinion regarding the authority 

of the Denton City-County Hospital Board to ,&ease iand to,~ 

private persons for construction of a medical office building. 

Specifically, you ask: 

Whether or not the City-County,Hospitai 

Board may lease a portion of the hospital 

grounds to 'an individual or corporation for 

a medical-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'~adjacent to the hospital and 

connected to it by a bridge at each level. The City-County 

Hospital Board would lease the land on a long term lease, 

and private persons wo,uld be,responsible for financing, 

constructing, and managing the building.. On completion of 

the lease, title to',the building would revert to the CityCounty Hospital Board. .The Board would not spend,any public 

funds or assume any liabilities. 

'The Denton City-County Hospital Board,was .created under 

article 4494i-1, V.T.C.S. See Atto,rney -, 

General Opinion M762 .(1970). Then Hospital 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 ~city and 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 in making 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 it will act for hospital 

purposes if it arranges a lease that upon termination provides them with a medical facility adjoining the hospital, 

and in the interim benefits hospital patients. See Sullivan 

v. Andrews Count 

m74, writ -T-# re 

517 S.W.2d 410 (Tex. Civ. App.- El Paso 

n.r.e.). Consequently, article 4494i-1, 

V.T.C.S., authorizes the Board to make the proposed lease. 

The ~1eas.e of hospital grounds also must comply with 

article 3, section 52 of the Texas Contitution, which prohibits any county or city from granting any "public money 

or thing of value in aid 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. See Attorney 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 to doctors space in a medical 

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, 

so we cannot determine as a matter of law whether it would 

accomplish this or an analogous public purpose. In drawing 

up and approving the lease, the Hospital Board, city government, and county commissioners should be certain that the 

lc-ese will serve a public purpose and include sufficient 

controls so that the public purpose is actually accomplished. 

See Attorney General Opinion H-445 (1974). The rent should 

beset so that together with the reversion of the building 

at the end of ~the lease, the Hospital Board receives adequate 

consideration for the use of its property. 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 52 of the Constitution. 

P. 4027 
The 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 a medical office building by private 

individuals. Article 3, section 52 requires 

that the lease serve a public purpose and 

provide for payment of adequate rentals. 

APPROVED: 

ttorney General of Texas 

Opinion Committee 

p. 4028