Can a West Virginia county building commission consent to having an existing nursing-home lease assigned to a private for-profit nursing home operator?

Plain-English summary

Sundale Nursing Home in Monongalia County has been on a 100-year lease (running to 2119) from the county building commission since 2019. Sundale ran into financial trouble and got an offer to sell its assets, including the lease, to a private for-profit nursing home operator. The new operator would keep running the property as a nursing home subject to the existing restrictive covenants. The county prosecutor asked: can the building commission consent to that lease assignment?

Yes. The opinion lays out three reasons:

1. The statute is unambiguous. § 8-33-4(1) gives building commissions "plenary power and authority" to lease property "for public purposes, to such persons and upon such terms as the commission deems proper." There is no restriction on the type of lessee. Plain-language interpretation (State v. Smith, DeVane v. Kennedy) prevents reading limits into statutes that aren't there.

2. Operating a nursing home is a public purpose. West Virginia Code § 16B-4-1 says it is the state's policy to "encourage, promote, and require the maintenance of nursing homes." Caselaw confirms that providing residential housing for the elderly serves a public purpose (Waterhouse). Other state courts agree (Pennsylvania, Florida, Kentucky). Even when a for-profit operator is the lessee, the public-purpose test is satisfied if the "primary and dominant purpose" is public benefit (Coghill).

3. The 2018 county-commission opinion doesn't apply here. A 2018 AG letter said county commissions cannot lease to private for-profits because § 7-1-3k and § 7-1-3hh are limited to nonprofits and government entities. But building commissions are a different statutory body with broader, plenary leasing authority under § 8-33-4. The 2018 letter also turned on the absence of a public purpose (the proposed lease was for an "escape room"), not on for-profit status alone.

The opinion's overall point: "the test is in the end, not in the means." A nursing home meets the end. A for-profit operator can be the means.

What this means for you

If you sit on a county building commission

You have substantially more leasing flexibility than your county commission. § 8-33-4(1) gives you plenary power to lease "for public purposes, to such persons ... as the commission deems proper." That includes for-profit entities. The constraint is on the use of the property (must serve a public purpose), not on the lessee's tax status.

When evaluating a lease or assignment to a for-profit entity:

1. Identify the public purpose served by the use of the property. Document it. The "primary and dominant purpose" test from Coghill is the standard.
2. Confirm that the lease terms preserve the public purpose. Restrictive covenants, use limitations, and other terms that lock in the public-purpose use are powerful. The Sundale lease contained a covenant requiring the property to be used for healthcare-related purposes; that strengthens the analysis.
3. Document what would happen if the lessee stopped serving the public purpose (e.g., reverter clauses, termination rights). Plenary authority does not relieve the commission from making sound judgments.

If you are dealing with a continuation of an existing public-purpose use (nursing home keeps being a nursing home), the analysis is straightforward. New uses that depart from the original public purpose require closer scrutiny.

If you are a nursing home operator considering acquiring or operating a property under a building commission lease

Lease assignment from one operator to another is permissible if the public purpose continues. Build into your acquisition due diligence:

• Read the existing lease and any restrictive covenants. Confirm that your intended operations fit the use restrictions.
• Get the building commission's written consent before closing if the lease requires it. Plenary authority means the commission has discretion, so you should not assume consent will be granted on terms favorable to you.
• Plan for compliance with the public-purpose use throughout the lease term. If you change your business model later, you may need fresh consent.

If you are a county prosecutor advising on a similar transaction

The opinion's distinguishing of building commissions from county commissions is the most useful piece for downstream questions. Key contrasts:

• County commissions (§ 7-1-3k, § 7-1-3hh): limited to nonprofits (specified purposes) and federal/state/state agencies (public purpose).
• Building commissions (§ 8-33-4(1)): plenary, no listed-lessee restriction, public-purpose test only.

When a transaction lands on your desk, identify which body is the lessor. Building-commission transactions get the more permissive analysis. County-commission transactions remain bound by the 2018 letter and the for-profit prohibition.

The "implied power may not exceed express authority" rule from State Line Sparkler v. Teach (which constrains county commissions) does not apply with the same force to building commissions, because the legislature wrote § 8-33-4 with a "plenary power" preface and § 8-33-12 demands liberal construction.

If you advocate for elderly care or long-term care

This opinion supports keeping nursing homes operating through ownership transitions even when the new operator is for-profit. The state-policy declaration in § 16B-4-1 (encourage, promote, and require maintenance of nursing homes) and Waterhouse on shortage-driven public purpose give a strong constitutional floor for these arrangements. If facility closures are the alternative to for-profit takeovers, the public-purpose calculus tilts toward facilitating the takeover.

Common questions

Q: How is a "building commission" different from a "county commission"?

A: They are separate statutory bodies with different powers. Building commissions are created under W. Va. Code § 8-33-1 et seq. and have plenary authority over their own property under § 8-33-4. County commissions are created under W. Va. Code Chapter 7 and have powers expressly conferred plus what is reasonably implied. The leasing power gap is one of the most consequential practical differences.

Q: Does the lease assignee have to keep using the property as a nursing home?

A: Under the lease and covenants in the Sundale fact pattern, yes. The opinion notes that the lease "would continue to require the assignee to operate a nursing home on the property, and the property would remain subject to a restrictive covenant requiring the assignee to use the property for certain health-care-related purposes." The public-purpose analysis depends on those use restrictions remaining in place.

Q: Could the building commission lease to a totally unrelated for-profit business, like a tech company office?

A: Maybe, but the public-purpose hook would have to be made out for that specific use. § 8-33-4(1) requires the lease to be "for public purposes." A tech company office without a clear public-purpose nexus would not qualify. By contrast, things like parking garages (Coghill), shopping centers (Samol), and wharves (Greene Line Terminal) have all been recognized as public purposes even when leased to for-profits. The use, not the operator, is the gate.

Q: What does "plenary power" actually mean in this context?

A: Gastar Exploration v. Rine defines "plenary" as "[f]ull, entire, complete, absolute, perfect, unqualified." Ellison v. Parkersburg adds that "plenary power" is "as broad as is required in a given case." For building commissions, this means courts give the commission's leasing decisions strong deference. Combined with § 8-33-12's liberal construction directive, doubts get resolved in favor of the commission's authority.

Q: Could the building commission consent to a lease assignment that converts the use to something private and not public-purpose?

A: No. The public-purpose requirement is a statutory limit on the commission's leasing power. § 8-33-4(1) is plenary as to lessees, but it requires "for public purposes" as to use. A use that fails the public-purpose test cannot be authorized even with the commission's consent.

Q: What if the new operator stops running a nursing home some years into the lease?

A: That would create a serious problem. The opinion does not directly address remedies, but the implication is that consent was granted on the public-purpose understanding. If the use changes, the commission may need to enforce the restrictive covenant, exercise lease-termination rights, or seek other remedies. Build covenant enforcement and reverter mechanisms into your lease terms upfront.

Q: Does the Sundale opinion change the answer for a county commission's similar situation?

A: No. County commissions still cannot lease to private for-profit entities under § 7-1-3k and § 7-1-3hh. The Sundale opinion narrows the applicability of the 2018 letter (it does not bar building commissions from doing what county commissions cannot), but it does not expand county-commission authority.

Background and statutory framework

West Virginia Code § 8-33-4 authorizes county building commissions to do fifteen express things, including (most importantly here) lease their property for public purposes. The legislative grant of power in this section is, in the words of County Commission of Boone County v. Hill, "so immense" that other implied powers can be found beyond the express list. Building commissions have "plenary power and authority" as to each express grant.

§ 8-33-4(1) reads: building commissions may "[l]ease its property or any part thereof, for public purposes, to such persons and upon such terms as the commission deems proper." The constraint is the public-purpose use; lessee identity is unconstrained.

The public-purpose test is the operative concept. § 8-33-4 does not define it, and the West Virginia Supreme Court of Appeals has not defined it for that section specifically. But the AG borrows the standard from other contexts. State ex rel. West Virginia Citizens Action Group: "[w]hat constitutes a public purpose varies" with "societal needs and demands." Coghill: focus on the "primary and dominant purpose" of the undertaking; "private ancillary benefits" don't change a public purpose into a private one.

The for-profit case law is consistent. West Virginia courts have approved:
- Issuance of bonds for shopping center development (Samol)
- Parking garages leased to for-profits (Coghill)
- Wharves operated by for-profit enterprises (Greene Line Terminal)

The nursing-home-specific public-purpose finding draws on:
- § 16B-4-1: state policy to encourage, promote, and maintain nursing homes
- Waterhouse: providing residential housing for the elderly is a public purpose
- Out-of-state authority: Pennsylvania (Lycoming County), Florida (Leon County), Kentucky (Stovall)

The "judicial mind" deference comes from State ex rel. County Court of Marion County v. Demus: a "legislative determination of what is a public purpose will not be interfered with by the courts unless the judicial mind conceives it to be without reasonable relation to the public interest." The legislature said nursing homes are public-purpose; courts will not second-guess that absent unreasonableness.

The 2018 county-commission opinion (W. Va. Op. Att'y Gen., 2018 WL 3390019) is distinguished on two grounds:

1. Different lessor: county commissions have constrained leasing authority under § 7-1-3k and § 7-1-3hh. Building commissions have plenary authority under § 8-33-4(1). State ex rel. W. Va. Parkways Auth. v. Barr (county commissions cannot exceed express authority) and McAllister v. Nelson (doubts resolved against county-commission authority) apply to county commissions only.

2. Different use: the 2018 letter concerned a proposed lease for a paid "escape room" attraction, which the AG found did not serve a public purpose. The 2018 letter explicitly noted it did not turn on for-profit status; "the test is in the end, not in the means." A nursing home meets the end; an escape room does not.

The plenary/liberal-construction stack (§ 8-33-4 plenary + § 8-33-12 liberal construction + Ellison's "as broad as is required" formulation) means that doubts about a building commission's leasing authority should be resolved in favor of the commission. That tips the analysis decisively in Sundale's favor.

Citations

• W. Va. Code §§ 5-3-2; 7-1-3hh; 7-1-3k; 8-33-4; 8-33-12; 16B-4-1
• Cnty. Comm'n of Boone Cnty. v. Hill, 194 W. Va. 481, 460 S.E.2d 727 (1995)
• State v. Smith, 243 W. Va. 470, 844 S.E.2d 711 (2020)
• DeVane v. Kennedy, 205 W. Va. 519, 519 S.E.2d 622 (1999)
• Bradford v. W. Va. Solid Waste Mgmt. Bd., 246 W. Va. 17, 866 S.E.2d 82 (2021)
• Tribeca Lending Corp. v. McCormick, 231 W. Va. 455, 745 S.E.2d 493 (2013)
• State ex rel. W. Va. Citizens Action Grp. v. W. Va. Econ. Dev. Grant Comm., 213 W. Va. 255, 580 S.E.2d 869 (2003)
• State ex rel. City of Charleston v. Coghill, 156 W. Va. 877, 207 S.E.2d 113 (1973)
• State ex rel. Ohio Cnty. Comm'n v. Samol, 165 W. Va. 714, 275 S.E.2d 2 (1980)
• Greene Line Terminal Co. v. Martin, 122 W. Va. 483, 10 S.E.2d 901 (1940)
• State ex rel. Cnty. Ct. of Marion Cnty. v. Demus, 148 W. Va. 398, 135 S.E.2d 352 (1964)
• State ex rel. W. Va. Hous. Dev. Fund v. Waterhouse, 158 W. Va. 196, 212 S.E.2d 724 (1974)
• Lycoming Cnty. Nursing Home Ass'n v. Commonwealth, 627 A.2d 238 (Pa. Commw. Ct. 1993)
• State v. Leon Cnty., 400 So. 2d 949 (Fla. 1981)
• Stovall v. E. Baptist Inst., 375 S.W.2d 273 (Ky. 1964)
• Gastar Expl. Inc. v. Rine, 239 W. Va. 792, 806 S.E.2d 448 (2017)
• Ellison v. City of Parkersburg, 168 W. Va. 468, 284 S.E.2d 903 (1981)
• State ex rel. W. Va. Parkways Auth. v. Barr, 228 W. Va. 27, 716 S.E.2d 689 (2011)
• McAllister v. Nelson, 186 W. Va. 131, 411 S.E.2d 456 (1991)

Source

• Landing page: https://ago.wv.gov/media/17481/download?inline
• Original PDF: https://ago.wv.gov/media/17481/download?inline

Original opinion text

State of West Virginia
Office of the Attorney General
(304) 558-2021
Fax (304) 558-0140

Patrick Morrisey
Attorney General

June 18, 2024

The Honorable Gabrielle Mucciola
Monongalia County Prosecuting Attorney
Monongalia County Justice Center
75 High Street
Morgantown, WV 26505

Dear Ms. Mucciola:
You have asked for an Opinion of the Attorney General about a county building
commission's power to approve the assignment of a lease. This Opinion is being issued under
West Virginia Code § 5-3-2.

You explain that the Monongalia County Building Commission has leased property to
Sundale Nursing Home since 2019. Sundale operates a long-term care and rehabilitation facility
on the property. Although the lease does not expire until 2119, Sundale has experienced recent
financial difficulties. Because of these difficulties, Sundale's future viability is at risk. Sundale
now has an opportunity to sell its assets, including the lease, to a private, for-profit, nursing
home operator. The lease would continue to require the assignee to operate a nursing home on the
property, and the property would remain subject to a restrictive covenant requiring the assignee to
use the property for certain health-care-related purposes.

With these facts in mind, your letter raises the following legal question:
May the Monongalia County Building Commission agree or consent to the assignment of an existing lease to a private, for-profit entity for the purpose of operating a nursing home, thereby replacing the existing non-profit entity lessee?

We conclude that the Building Commission may lease its property to any party, including
a private, for-profit company, so long as the lessee will use the property for a public purpose.
And here, operating a nursing home serves a public purpose. Thus, the Building Commission may
approve the proposed assignment.

Discussion

I. The Building Commission Has Authority To Approve The Proposed Assignment.

"The powers with which a building commission is ordained are set forth in West Virginia
Code § 8-33-4." Cnty. Comm'n of Boone Cnty. v. Hill, 194 W. Va. 481, 486, 460 S.E.2d 727, 732
(1995). That statute lists fifteen express powers. As to each of them, building commissions "have
plenary power and authority." Beyond that, the "legislative grant of power" in this section is "so
immense" that other implied powers can be found. And as relevant here, building commissions
have plenary power to "[l]ease [their] property or any part thereof, for public purposes, to such
persons and upon such terms as the commission deems proper." W. Va. Code § 8-33-4(1).

First, the Building Commission may "[l]ease its property ... to such persons ... as the
commission deems proper." This provision does not constrain the persons to whom the Building
Commission can lease its property. The statute is "clear and unambiguous," State v. Smith, 243
W. Va. 470, 475, 844 S.E.2d 711, 716 (2020), and "[w]here the language of a statutory provision
is plain, its terms should be applied as written and not construed," DeVane v. Kennedy, 205 W. Va.
519, 529, 519 S.E.2d 622, 632 (1999). It is also improper to "arbitrarily ... read into a statute that
which it does not say." Bradford v. W. Va. Solid Waste Mgmt. Bd., 246 W. Va. 17, 866 S.E.2d 82
(2021). So if the new lease serves a public purpose, then the Building Commission may lease to
"such persons ... as the commission deems proper," full stop.

Second, to lease property (or approve an assignment of a lease), the Building Commission
must show that a lease is "for public purposes." Section 8-33-4 does not define "public purpose."
But in other contexts, the Court has explained that "[w]hat constitutes a public purpose varies"
based on "societal needs and demands." We must consider whether the "primary and dominant
purpose" of a proposed undertaking is to confer public benefits. State ex rel. City of Charleston v.
Coghill, 156 W. Va. 877, 884, 207 S.E.2d 113, 118 (1973). If it is, then the presence of "private
ancillary benefits" will not change the undertaking to a private purpose. Thus, a property can still
serve a public purpose even when a for-profit entity is involved.

Operating a nursing home should qualify as a public purpose. The Legislature has declared
that "[i]t is the policy of this state to encourage, promote, and require the maintenance of nursing
homes." W. Va. Code § 16B-4-1. And a "legislative determination of what is a public purpose
will not be interfered with by the courts unless the judicial mind conceives it to be without
reasonable relation to the public interest." State ex rel. Cnty. Ct. of Marion Cnty. v. Demus, 148
W. Va. 398, 406-07, 135 S.E.2d 352, 358 (1964). We doubt that the "judicial mind" would
question this interest, as the Supreme Court of Appeals has already recognized that a public
purpose is served in providing "residential housing" to the elderly considering the "shortages" of
"nursing homes and intermediate care facilities" in West Virginia. State ex rel. W. Va. Hous. Dev.
Fund v. Waterhouse, 158 W. Va. 196, 215-16, 212 S.E.2d 724, 735 (1974).

Third, and finally, Section 8-33-4's broader context confirms that the Building
Commission should have the power to approve the assignment here. The Commission's power is
"plenary." "[P]lenary" means "[f]ull, entire, complete, absolute, perfect, unqualified." Gastar
Expl. Inc. v. Rine, 239 W. Va. 792, 798, 806 S.E.2d 448, 454 (2017). And "plenary power" is "as
broad as is required in a given case." Ellison v. City of Parkersburg, 168 W. Va. 468, 472, 284
S.E.2d 903, 906 (1981). Beyond that, under West Virginia Code § 8-33-12, all provisions of
Article 33, Section 8-33-4(1) included, are to "be liberally construed."

II. Our Previously Issued Opinion Does Not Change The Analysis.

A previously issued opinion from the Attorney General, referenced in your request, does
not change the analysis. See W. Va. Op. Att'y Gen., 2018 WL 3390019 (June 6, 2018) ("2018
Opinion"). The opinion is distinguishable in at least two important ways.

For one, our prior opinion concerned a county commission's authority. County
commissions have more circumscribed authority to lease property: they may lease only (1) to
"nonprofit organizations" for certain enumerated purposes and (2) to the federal government,
"the state or agency or instrumentality thereof" for "a public purpose." See W. Va. Code § 7-1-3k,
7-1-3hh. A county commission also cannot assert implied authority that is broader than its express
authority. State ex rel. W. Va. Parkways Auth. v. Barr, 228 W. Va. 27, 716 S.E.2d 689 (2011). And
on top of that, "[i]f any reasonable doubt exists as to whether" a county commission "has a power,
the power must be denied." McAllister v. Nelson, 186 W. Va. 131, 411 S.E.2d 456 (1991).

As we have already described, a building commission's authority is broader than a county
commission's power. The Legislature did not limit a building commission to leasing property to
non-profit and governmental entities. And unlike the presumption that attaches to a county
commission's powers, courts should err on the side of granting a building commission any power
that can be reasonably grounded in the statute.

For another, our prior opinion addressed a situation that would plainly not serve a public
purpose: leasing to an enterprise that would run a paid "escape room" attraction. But the opinion
also made plain that it did not turn on the involvement of a for-profit enterprise: "[T]hat is not to
say that any proposed lease ... would be impermissible ... simply because the intended purpose
requires involvement of a private company." Accord 1966 Opinion at 7 ("[T]he test is in the end,
not in the means.").

Here again, we have already described why the nursing-home facility here serves a
different, and public, purpose from a private "escape room." Unlike a gaming facility, providing
a place for the eldest among us to receive care goes directly to the State's health and public
welfare.

For all these reasons, the Monongalia County Building Commission may allow Sundale to
assign its lease to for-profit nursing home operator for the continued operation of a nursing home.

Sincerely,

Patrick Morrisey
West Virginia Attorney General

Michael R. Williams
Solicitor General

Caleb A. Seckman
Assistant Solicitor General