DHHS looking for new home

Posted May 5, 2015

— The Dorothea Dix property sale will spark one of the biggest migrations of state workers in recent memory, but not just yet.

Lease-back arrangements in the sale of the 308-acre property to Raleigh give the state at least a decade to work out where roughly 2,1000 Department of Health and Human Services employees will be located after city fully takes over the campus.

"I'm looking forward to the day when they're working in conditions a heck of a lot better than they are now," Gov. Pat McCrory said Tuesday morning during the Council of State meeting that marked the final government approval of the deal.

Dozens of aging buildings dot portions of the campus – many in need of repair and all built before the days buildings were wired for Internet service – and none is configured ideally for its current use. McCrory said the state spends millions of dollars on maintenance and upkeep that could be plowed into services if workers were housed in a better location.

City leaders must borrow the $52 million needed for the purchase by the end of the year in order to close the sale. While it's very likely the city will be able to do that on time, state officials aren't saying where they're looking to move DHHS until the property deal closes.

"We've got time to look," McCrory said after the meeting.

Under the terms of the deal, it could be as late as the end of February before the title formally transfers from the state to the city. Asked if the state would keep DHHS in Wake County, McCrory said, "I anticipate staying within this region."

Even now, not all DHHS employees are located in Raleigh. For example, the workers that oversee training and run the help desk for the NC FAST system used to administer social services benefits occupy leased space in Research Triangle Park.

"We'd love to see them stay in Raleigh," said Mayor Nancy McFarlane.

There are multiple sites in Wake County that have been talked about as potential locations, including state-owned land near Interstate 440. However, policy makers could decide to trade proximity to the nexus of state government for cheaper land further from the capitol.

McCrory did not include a replacement for the DHHS headquarters in his list of budget proposals for how $1.5 billion in infrastructure bonds might be used. That's because the state may be looking at a public-private partnership arrangement in which North Carolina would leave custom-built space.

"We don’t believe it is necessary to use bond proceeds to fund this project. We believe it is a more efficient use of taxpayer dollars to build the new DHHS headquarters in partnership with the private sector," said Melanie Jennings, a spokeswoman for the Office of State Management and Budget.

In a typical public-private partnership, a private company pays to construct the building and then enters into a long-term lease with the government for the facilities.

That could be a budget boon to North Carolina as well. Medicaid is a health insurance program for the poor and disabled paid for jointly by the state and federal governments. The federal government will reimburse leases for state Medicaid offices but won't cover any part of the cost of building a new state asset. So, a public-private arrangement could draw more federal tax dollars into the state.

Sen. Ralph Hise, R-Mitchell, who is a key overseer of the state Health and Human Services budget, said he doesn't know where the administration was looking but said that lawmakers expected to be consulted on such a large project.

"I'm sure we'll be part of the process," he said.


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  • Holly Atkins May 5, 2015
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    Agreed...we don't need to be another Charlotte!

  • Sammy Macloud May 5, 2015
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    I, for one, appreciate the foresight of making this land into something that can be pleasantly used for decades to come. SOME people, however, won't be happy until the City of Oaks doesn't have one single oak tree (or other tree) left and it's all concrete and highrises.....smh

  • Jimmy Jones May 5, 2015
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    This may be a great deal for the city of Raleigh, but it is a very POORone for the rest of the State. That 308 acre site was prime real estate for the State to build new buildings for state government, not just for the present, but also for future growth. Horrible, horrible decision to follow in Perdue's steps on this one. She was a one term governor for good reason.