Can a Mississippi county and its community hospital sell a surplus parcel of hospital property to a private buyer for use as a pediatric dental clinic, without a public bid?

Plain-English summary

Delta Health System and Washington County jointly own a parcel in Greenville with a former medical clinic on it. The building has been unused for years and needs repairs. A buyer wants to renovate it into a pediatric dentistry clinic. The hospital and the County both passed orders commissioning an appraisal, declaring the parcel surplus, and approving the sale. The hospital's attorney asked the AG: can they actually sell it under Section 57-7-1, without a competitive bid process?

The AG's answer: yes, with three conditions:

1. The Board of Supervisors must formally find that the property is surplus and "not needed . . . for other governmental purposes." This is a factual determination that has to be on the minutes.
2. The buyer's intended use must be commercial or industrial. Section 57-7-1 only authorizes sales (or leases) for commercial and industrial purposes. Whether running a pediatric dentistry clinic counts as "commercial" is a factual call for the Board.
3. No fair market value floor, but valuable consideration is required. Sales under Section 57-7-1 do not have to be at fair market value, but they do have to be for "good and valuable consideration." A nominal-dollar sweetheart deal would not survive scrutiny.

The AG relied on a line of prior opinions involving the same statute and similar fact patterns: Brown 2002 and 2003 (county-owned community hospital selling surplus to a physician group), Moffett 1999, Manley 2014, Moak 2022.

What this means for you

If you are a county attorney advising a community hospital on a surplus-property sale

The opinion sets out three requirements drawn from the statute and the AG's prior opinions on Section 57-7-1:

1. Surplus finding on the minutes. Before proceeding, the Board "must first make a factual determination that the subject property is surplus and 'not needed . . . for other governmental purposes.'" The opinion treats this as the gating step.
2. Commercial or industrial use. Section 57-7-1 authorizes a sale or lease for commercial and industrial purposes only. The opinion states that whether operating the pediatric dentistry clinic is for a commercial purpose is a factual determination for the Board.
3. Good and valuable consideration. The opinion says sales under Section 57-7-1 "do not necessarily require fair market value, but should be made for good and valuable consideration."

If you serve on a Mississippi Board of Supervisors considering this kind of sale

The opinion places the substantive judgments with the Board: whether the property is surplus, and whether the buyer's use is commercial. Under Section 7-5-25 the AG does not make those factual determinations. The opinion also confirms that Section 57-7-1 authorizes the sale "without the necessity of publishing a request for bids."

If you run a community hospital sitting on surplus real estate

The opinion confirms that Section 57-7-1 is an available path: a community hospital and its county owner may sell surplus property to a private buyer for a commercial purpose without a competitive bid, provided the surplus finding, the commercial-purpose determination, and good and valuable consideration are present. On these facts both the hospital and the County had passed orders declaring the parcel surplus and approving the sale.

If you are a private buyer interested in a vacant community-hospital property

Under this opinion, Section 57-7-1 allows a sale without a bid process, but it authorizes the sale only for a commercial or industrial purpose and only after the Board makes its surplus determination. The opinion says the price need not be fair market value, but it must reflect good and valuable consideration.

If you are a journalist or citizen tracking municipal real-estate disposals

This opinion holds that a Section 57-7-1 sale does not require competitive bidding. The questions it leaves to the Board's record are whether the property was formally found surplus, whether the use is commercial, and whether the consideration was good and valuable.

Common questions

Q: Can a Mississippi community hospital sell its surplus property without a bid?
A: Yes, under Section 57-7-1, if the Board of Supervisors first determines the property is surplus and not needed for governmental purposes, and the buyer will use it for a commercial or industrial purpose.

Q: Is the hospital required to sell at fair market value?
A: No. Section 57-7-1 sales do not require fair-market-value pricing. But they do require "good and valuable consideration." A token-dollar sale would not satisfy that.

Q: What kinds of buyers and uses qualify?
A: Commercial or industrial users. The Brown 2002 and 2003 opinions involved sales to physician groups; this 2025 opinion involves a pediatric dentistry clinic. Whether a particular proposed use is commercial is a factual judgment for the Board.

Q: Who has to approve the sale?
A: Both the community hospital's governing body and the Board of Supervisors when both have ownership interests. Each has to enter the appropriate orders and make the surplus and authorization findings on its minutes.

Q: What happens if the Board doesn't make a formal surplus finding?
A: Without the surplus finding, Section 57-7-1 doesn't authorize the sale, and the disposition could be challenged. Make the finding explicit.

Q: Can the property be leased instead of sold under Section 57-7-1?
A: Yes. The statute authorizes both sale and lease "upon such terms and conditions as a municipality, county, municipal airport authority, regional airport authority or governmental subdivision shall prescribe."

Background and statutory framework

Section 57-7-1 dates back to a legislative recognition that local governments often hold land that is no longer needed for a public purpose, and that selling or leasing it for commercial or industrial development is a useful economic-development tool. The statute is not limited to hospital property; it covers any surplus airport land or other land owned by a county, municipality, or governmental subdivision.

The community-hospital framework adds context. The Legislature has expressly found that "community hospitals must have the ability to respond to changing conditions by having the power to develop efficient and cost-effective methods and structures to provide for health care needs, while maintaining a public mission and character" (Section 41-13-35(8)(b)). That includes the power to dispose of property no longer serving the hospital's mission.

The AG's opinion line on Section 57-7-1 sales has been consistent for over two decades. The recurring three requirements: surplus finding, commercial or industrial use, and good and valuable consideration. The Brown opinions (2002 and 2003) addressed nearly identical facts (county-owned community hospital selling to a physician group) and concluded the sale was authorized. Moffett 1999 and Moak 2022 reinforced the consideration and commercial-purpose requirements.

Citations and references

Statutes:

• Miss. Code Ann. § 57-7-1 (sale or lease of surplus governmental property)
• Miss. Code Ann. § 41-13-1 et seq. (community hospitals)
• Miss. Code Ann. § 41-13-35(8)(b) (community hospital legislative findings)

Prior AG opinions cited:

• MS AG Op., Brown (Aug. 8, 2003): County may sell surplus community-hospital property under Section 57-7-1 with proper surplus finding.
• MS AG Op., Brown (Aug. 9, 2002): Same.
• MS AG Op., Moffett (Feb. 12, 1999): Sales need not be at fair market value but require good and valuable consideration.
• MS AG Op., Manley (Sept. 10, 2014): Section 57-7-1 limited to commercial or industrial purposes.
• MS AG Op., Moak (July 11, 2022): Same.

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2025/09/W.-Griffin-Phillips-September-242025-Sale-of-Community-Hospital-Property-Under-Section-57-7-1.pdf

Original opinion text

September 24, 2025

Willie Griffin, Esq.
Attorney, Washington County Board of Supervisors
Post Office Box 189
Greenville, Mississippi 38702-0189

Re: Sale of Community Hospital Property Under Section 57-7-1

Dear Mr. Griffin:

The Office of the Attorney General has received your request for an official opinion.

Background

Delta Health System (DHS), a community hospital as defined under Mississippi Code Annotated Sections 41-13-1 et seq., is owned by the Board of Supervisors of Washington County (the "County"). DHS and the County jointly own a parcel of real estate upon which sits a former medical clinic building located at 1699 S. Colorado Street in Greenville, Mississippi (the "Property"). The Property has not been utilized for several years due to needed repairs, and DHS has been approached by a potential purchaser who would like to renovate the Property into a pediatric dentistry clinic.

DHS and the County have approved orders, which 1) commission an appraisal of the property to determine fair market value, 2) declare the Property as surplus property no longer needed for hospital or county purposes and approve the sale to the prospective purchaser, and 3) seek an official opinion from the Attorney General that such sale is appropriate under Section 57-7-1.

Question Presented

May DHS and the County sell the unused parcel of hospital property to the prospective purchaser under the provisions of Section 57-7-1?

Brief Response

Yes, consistent with state law and prior opinions of this office, DHS and the County may sell the unused parcel of hospital property to the prospective purchaser under Section 57-7-1.

Applicable Law and Discussion

The Legislature has found and declared that "community hospitals must have the ability to respond to changing conditions by having the power to develop efficient and cost-effective methods and structures to provide for health care needs, while maintaining a public mission and character." Miss. Code Ann. § 41-13-35(8)(b). Moreover, the Legislature has also found "that there is a compelling interest in establishing a structure and process for a community hospital to adapt to this dynamic environment, to operate efficiently, to offer competitive health care services, to respond more effectively to new developments and regulatory changes in the health care area, and to continue to serve and promote the health, wellness and welfare of the citizens of Mississippi." Id.

In light of the community hospital's overarching objective to adapt to the healthcare needs of the community, you ask whether DHS and the County may proceed to sell surplus community hospital property under Section 57-7-1, without the necessity of publishing a request for bids.

Mississippi Code Annotated Section 57-7-1 provides, in relevant part, as follows:

In the event that any municipality, county, supervisors district, municipal airport authority, regional airport authority or other governmental subdivision shall have surplus airport land or other lands which are not needed for airport purposes or for other governmental purposes, then such property so designated and described may be set aside and improved for industrial and commercial purposes and the same may thereafter be operated or the same may be leased or sold upon such terms and conditions as a municipality, county, municipal airport authority, regional airport authority or governmental subdivision shall prescribe.

Before proceeding with the sale of the property, the Board must first make a factual determination that the subject property is surplus and "not needed . . . for other governmental purposes." Id. Assuming such determination has been made, MS AG Op., Brown (Aug. 8, 2003), and its predecessor MS AG Op., Brown (Aug. 9, 2002), provide guidance for your question. Those opinions addressed very similar circumstances in which a county-owned community hospital sought to sell surplus property to a local physician group. In each of those opinions, our office stated that a county may sell surplus community hospital property pursuant to Section 57-7-1 upon a proper finding spread across the minutes of the board of supervisors. Brown (Aug. 9, 2002) (citing MS AG Op., Moffett (Feb. 12, 1999)). See also MS AG Op. Brown (Aug. 8, 2003).

Crucially, the authority granted in Section 57-7-1 is limited to a sale or lease of surplus property for commercial or industrial purposes only. MS AG Op., Moak at 1 (July 11, 2022) (citing MS AG Op., Manley (Sept. 10, 2014)). Whether the operation of the pediatric dentistry clinic is for a commercial purpose is a factual determination for the Board of Supervisors. In addition, sales and leases pursuant to Section 57-7-1 do not necessarily require fair market value, but should be made for good and valuable consideration. Brown at 3 (Aug. 9, 2002) (citing MS AG Op., Moffett (Feb. 12, 1999)).

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Caleb A. Pracht
Caleb A. Pracht
Special Assistant Attorney General