Raleigh, N.C. — Companion bills filed Thursday in the House and Senate would wipe away the lease of the Dorothea Dix site inked by Gov. Beverly Perdue on her way out of office, throwing into limbo a plan that would turn the central Raleigh campus into a park.

The 325-acre campus is home to a former mental hospital and many of the administrative offices for the Department of Health and Human Services. Under the terms of the Perdue-signed deal, the city would lease the property from the state for the development of a "destination park." Plans at the time of the deal called for DHHS to move off the property to another office complex.

Republicans objected at the time the deal was announced, saying the state should look at using the campus for its own purposes.

"The deal was done at well below market value," said Sen. Ralph Hise, R-Mitchell, one of the sponsors of Senate Bill 334.

A group of local business leaders and civic boosters known as Dix Visionaries had lobbied for years for Raleigh to gain control of the Dix property for an urban park, and the group recently pledged $3 million to help the city create a master plan for the site.

"Words cannot express how disappointed we are with the introduction of a bill that would put the preservation of the Dorothea Dix land in jeopardy," the group said in a statement. "This lease was not a politically partisan act. Dorothea Dix Park was created by support from the Council of State, mayors, elected officials, business leaders, community groups and an overwhelming majority of citizens across North Carolina.

"We are hopeful that the legislature will honor the lease with the city of Raleigh and protect the land for generations to come," the group said.

Raleigh Mayor Nancy McFarlane, who signed the lease with Perdue, said the effort to rescind the deal left her "shocked and sick."

"It's almost heartbreaking," McFarlane said. "The city went into this in good faith, and we expect the state of North Carolina to honor their contractual obligation."

City Attorney Tom McCormick spent part of the day reviewing Raleigh's legal options.

Gov. Pat McCrory, who succeeded Perdue in January, hasn't taken a stand on the proposed legislation. Spokeswoman Crystal Feldman said McCrory supports Raleigh's effort for a park, but he also would like to keep DHHS employees there.

Sen.  Louis Pate, R-Wayne, another sponsor of the Senate bill, said that some of the property was originally given to the state for the purpose of taking care of the mentally ill.

"I think the governor's action on Dec. 28 was wrong for the state," Pate said. "I think we need to go back and reclaim the Dix property for the reason it was deeded to the state in the first place."

House Minority Leader Larry Hall said that Republican legislative leaders should have agreed to expanding the state Medicaid program if they wanted to help people with mental illness.

"It sounds nice to say the money (from a renegotiated lease) will go solely to mental health, but they have not said that the money will not displace other funds," said Hall, D-Durham.

Together with House Bill 319, the bill would wipe out the 99-year, $500,000-per-year lease approved by the Council of State and city officials. The legislation calls for city and state officials to renegotiate a lease for a portion of the property to become a park but at fair market rates.

According to Senate President Pro Tem Phil Berger's office, the bill would: 

• Direct the state Department of Administration to re-lease a portion of the Dorothea Dix campus to Raleigh at fair market value, allowing the city to move forward with its vision of a world-class park for residents and visitors.
• Designate proceeds from the new lease agreement will fund mental health programs in the state.
• Preserve a portion of the property to house the consolidation of 2,500 DHHS employees on-site, saving North Carolina taxpayers the expense of moving them elsewhere.
• Instruct DOA and DHHS to study recommended uses for the remainder of the property identified in the 2007 State Government Facilities Master Plan and report their findings to the General Assembly by March 2014.
• Maintain the purpose for the property outlined in the original deed from 1848, which said the land was to be used for the benefit of North Carolinians with mental illness.

Rep. Marilyn Avila, R-Wake, is one of the co-sponsors of the House bill.

Pate said he doesn't believe the bill could make other governments or businesses worry about their deals with the state.

"I believe this is a one-time thing because it was done under the last days of another administration," he said, adding that the bill would protect the taxpayers.

Hall said he doesn't think everyone will see it that way.

"If we just, every time a different party comes into power, we get to change and void previous contracts, what kind of statement does that send to the rest of North Carolinians? You can't rely on it," he said.

Pate said he believed a "destination park" was still a good idea. 

"It's a beautiful location," he said. "Raleigh should negotiate for it."

McFarlane shot back, "We already had all those negotiations, and we have a signed contract."