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:
- 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.
- 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.
- 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
Build the file in three layers:
- Surplus finding on the minutes. Have the Board of Supervisors enter a formal order finding that the property is surplus to hospital and other governmental needs. Recite the supporting facts (vacancy, condition, no current or planned use). The factual determination is the gating step; without it, Section 57-7-1 doesn't apply.
- Commercial-or-industrial use determination. Document that the proposed use (here, pediatric dentistry clinic) is commercial. The AG flagged this as a factual call. A pediatric dentistry practice operating for profit on private property is plainly commercial, but document it explicitly.
- Consideration analysis. You don't need a competitive bid or a fair-market price, but you do need "good and valuable consideration." Get the appraisal, document the negotiated price, and show that consideration is meaningful even if discounted (e.g., the buyer is investing in renovating a derelict building, generating local employment, returning the property to the tax rolls).
If you serve on a Mississippi Board of Supervisors considering this kind of sale
The substantive judgments (is the property surplus, is the buyer's use commercial, is the consideration adequate) are yours. The AG cannot make those calls. Be prepared to defend each finding on the record. Concrete things to put in the order: how long has the property been unused, what alternatives were considered, why is no bid process needed (Section 57-7-1 itself authorizes the no-bid sale), what is the buyer paying and on what terms.
If you run a community hospital sitting on surplus real estate
This opinion confirms a useful disposition path. You don't have to hold the property forever, and you don't have to run a public bid auction. You can identify a buyer, negotiate terms, and (with the County's joint participation if there is joint ownership) close. The constraints (commercial use, valuable consideration, surplus determination) are real but workable. Engage the County early so the Board's surplus finding is in place before closing.
If you are a private buyer interested in a vacant community-hospital property
Section 57-7-1 lets you negotiate directly with the County and hospital, without going through a bid process. You will need:
- Patience: the Board has to make a formal surplus determination first.
- A clear commercial or industrial use plan: leisure, residential, or non-revenue-generating uses do not fit Section 57-7-1.
- Valuable consideration: not necessarily appraised value, but a meaningful price that the Board can defend as not a giveaway.
If you are a journalist or citizen tracking municipal real-estate disposals
The relevant question is not whether the property went to bid (Section 57-7-1 does not require it), but whether the Board made a proper surplus determination on the minutes, whether the use is commercial, and whether consideration was meaningful. Look at the Board's order and the appraisal.
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