All money from the sale of the 178-acre Bull Street mental health campus should go to the financially strapped S.C. Department of Mental Health, Attorney General Henry McMaster said Friday.

McMaster said his office plans to issue a legal opinion later this month to that effect.

McMaster said months of legal research into state documents, some 175 years old, led him to determine the legal wishes of the people who donated the land to the state for a mental institution should be respected. Under a centuries-old legal doctrine, the state can’t take property given to it for one use and convert it to another — even if the donation took place more than a century ago, he said.

“If you give property for a park, and the city sells it and uses the money to pave Main Street, that will cause people not to make any more donations,” McMaster said. “This is an important public policy issue. It’s like giving land to the Nature Conservancy. These things are given with a certain understanding.”

McMaster’s opinion conflicts with the wishes of Gov. Mark Sanford. Sanford proposed selling the Bull Street property, now largely unused, to private interests. He wants as much as possible of the sale proceeds to go to pay off part of $200 million in debt in the state’s trust and reserve funds.

A Sanford spokesman said Friday that if it is determined that money from the Bull Street sale can’t go to repay debt, “we will ask the General Assembly to address the debt in another way.” The spokesman said the governor wants to review McMaster’s written opinion when it is issued.

No one knows yet how much the Bull Street tract would sell for. One widely quoted estimate is $32 million. But the actual figure could be far more or less.

The General Assembly had said previously the Department of Mental Health would get half of the proceeds. McMaster’s opinion, if accepted, would give the department all of the money.

McMaster’s opinion is just the latest chapter in an already complex saga involving the state and city, and the single largest tract of developable land left in downtown Columbia.

“This is the most important economic development opportunity we will ever have,” Mayor Bob Coble said Friday.

The saga also involves the financial woes of the Department of Mental Health — woes that translate into substandard care for many of the state’s thousands of mentally ill people, mental health advocates say.

In recent years, the department has reduced its work force by 1,000 employees to 5,100, a department spokesman said Friday. Because of its understaffing and financial problems, the department now must focus only on the most critically mentally ill, he said.

That lack of state-supported treatment has led to an upsurge of mentally ill homeless people on city streets and in hospital emergency rooms, mental health advocates say.

The Mental Health Department plans to use any money it gets from the land sale to improve aging and inadequate mental health facilities, said spokesman John Hutto.

‘THAT’S WONDERFUL’

Almost 200 years ago, South Carolina was the national leader in mental health care, McMaster noted in an interview.

In 1821, the state created the nation’s second mental hospital on the Bull Street campus. Over time, and with the support of state officials and private citizens, that campus grew to its present 178 acres.

McMaster said his research shows private and official efforts to nourish the Bull Street campus were intended to ensure that property was used to serve the state’s mentally ill for all time.

“My whole point is, when the state does business, it must always follow the law,” said McMaster, adding he is willing to go to court if necessary to defend his opinion, which is just that — only an opinion, not a binding ruling.

McMaster said a court ruling could be needed if someone were to sue the state about how to handle the land sale’s proceeds.

Or, he said, the State Budget and Control Board could follow his opinion and vote to give all the money from the sale of the Bull Street property to the Department of Mental Health.

The Budget and Control Board — made up of the governor, the chairmen of the House and Senate finance committees, the state treasurer and the state comptroller — helps set priorities for the state, including how to use money from sales of state property.

The Budget and Control Board formally requested an opinion from McMaster on the Bull Street property after the attorney general raised concerns about the intentions of the original donors.

McMaster’s interest stemmed from a letter written to his office last year by Dr. Alexander Donald of Columbia.

The 77-year-old Donald, who worked for Mental Health for more than 30 years, wrote McMaster that he had heard the original conveyances to Mental Health governing the land may have imposed restrictions. He asked McMaster to investigate.

Reached at home Friday and told McMaster was on the verge of issuing an opinion that would send all money from the land sale to Mental Health, Donald responded, “Great — that’s wonderful!”

Donald said that the needs of South Carolina’s mentally ill are so great that it would be irresponsible to spend the money to repay debt. “That money shouldn’t be gobbled up by the budget. It ought to be used in the best interests of the critically mentally ill.”

The Budget and Control Board delayed putting the property up for sale until it could get McMaster’s opinion.

Even if the board directs money from the land sale go to Mental Health, the General Assembly could move to deduct that sum from the department’s budget, McMaster acknowledged.

But, he added, if that happens, there will be public debate in the House and Senate. Now, he said, where to spend the money is being decided in large part by the small group of Budget and Control Board members.