Dix deal still in limbo after two years

Posted December 12, 2014

Dorothea Dix property

— The fate of the Dorothea Dix campus remains in limbo two years after former Gov. Bev Perdue announced she had a deal to lease the 300-plus acres perched on the edge of downtown Raleigh to the city. 

With months of twists and turns behind them, both Gov. Pat McCrory and Raleigh Mayor Nancy McFarlane said they believe a new deal on the property could be reached before the acorn drops in Moore Square to mark the beginning of 2015, although both cautioned that negotiators were still working on key issues.

"We've had lots of conversations," McCrory said Thursday. "My goal would be to get a deal resolved before the end of the year."

Wedged between Raleigh's urban core of government and bank buildings, North Carolina State University and long-standing neighborhoods, the bucolic swath of trees and fields is a unique piece of open space in a city that continues to burst its borders. City leaders and private boosters say they would like to develop the campus into a destination park to serve one of the most rapidly growing areas in the state. 

Although lawmakers moved to scuttle the Perdue lease in 2013, both sides backed off a full-out legal confrontation. They agreed instead to seek new appraisals of the property and work on a sale. Negotiations began in earnest earlier this year once the appraisals came back. 

The city and state have exchanged a number of offers over the property throughout the year. Most recently, the city sent a three-page counteroffer to the state on Nov. 20 that tackled some of the toughest sticking points in the negotiations, including who would bear responsibility for environmental problems on the property. 

Dorothea Dix property Dorothea Dix documents Dorothea Dix property in fall Timeline: Decisions about Dix property "I don't want to jump the gun. I think we're very, very close," McCrory said, cautioning, "Close in some eyes could be far apart in others." 

McFarlane, too, said she hoped that a deal could be wrapped up soon.

"I think we would both like to see it before the end of the year," McFarlane said, saying the goal was "doable" and adding, "We're still talking and negotiating."

Complex issues still in play

The Dorothea Dix hospital opened to its first patients before the Civil War, and over the years, the state mental hospital acquired hundreds of acres perched on the edge of downtown. Parts of what were once part of the hospital's sprawling farm operation were turned over to N.C. State in recent decades for its Centennial campus, but there are still more than 300 acres and dozens of structures attached the property, including the now-shuttered hospital, aging administrative buildings used by the Department of Health and Human Services and an iconic hillock that overlooks downtown.

"We have met recently and have exchanged information and thoughts, as we have done throughout the process," said Bob Stephens, McCrory's general counsel and lead negotiator on the Dix property. "Both sides are actively and in good faith pursuing these negotiations." 

Although estimates of the property's value have varied widely, ranging from $33 million to $86 million depending on the appraisal or offer at hand, price is in some ways one of the least contentious issues in the negotiations. In fact, the summary offer to buy the entire 307-acre tract put forward by the city on Nov. 20 was for $52 million, the same price named by the state in September.

Rather, questions about who would assume responsibility for environmental issues associated with the site – a now closed landfill, a former power generation station and asbestos-laden buildings are among the potential problems – and the state's need for DHHS office space have often proved stickier issues.

The city's Nov. 20 offer at least partially tackles those two issues. City officials agree to accept, with certain conditions, responsibility for environmental problems on the property, with the exception of what might arise as a result of the old landfill area. The city also agreed to a state request to lease back parts of the property, including a 27.5-acre portion of the campus currently occupied by DHHS offices. However, the city wants that lease to be for 25 years, not the more open-ended lease sought by the state. 

Dorothea Dix-Raleigh land dealUnder this offer, the city would be given time to go to voters for bond financing in October 2015 and get an easement for 7 acres of the Gov. Morehead School for the Blind property, which would provide parking and connect the Dix property to nearby Pullen Park. 

The state has not yet responded to this offer. 

For those who hope to use the proposed destination park, the process can seem maddeningly slow, particularly compared to relatively straightforward transactions such as buying or selling a single-family home.

"The transaction has many moving parts ... each of which is complex in its own right," Stephens said. "Plus, there are multiple decision makers on both sides that have to be consulted. Comparing this to the sale of a home is like equating the skills needed to drive a pickup with those needed to drive an 18-wheeler."

Further complicating matters are political considerations, including oversight from a often skeptical General Assembly. 

Lawmakers watching carefully

"The legislature pretty clearly said the prior agreement was not acceptable," said Sen. Ralph Hise, R-Mitchell, referring to the Perdue lease. 

Perdue was a Democrat on her way out of office when she inked the lease agreement. Legislative Republicans, particularly senators, objected to the deal, saying that the state was not being compensated fairly for the property, which some had eyed for development of shops and homes.

Hise said he also wanted to make sure that any proceeds from the property went to support mental health. There was some debate in early 2013 whether the terms under which some of the Dix property was sold to the state required it to be used to the benefit of the mentally ill in perpetuity. Although that has not been a central point of negotiations, Hise said that he believed the role of the campus in helping those with mental illness would be key in whether any new deal passed muster. 

Dorothea Dix Hospital signAlthough he was less concerned about the eventual fate of the DHHS offices, Rep. Nelson Dollar, R-Wake, said he believed the state should make sure any deal allows for a consolidated campus for the agency. 

"There's certainly sufficient space to accomplish both," Dollar said, referring to a destination park and a DHHS campus.

Another option would be to acquire an unused piece of property currently owned by N.C. State for a new DHHS campus. That possibility has been discussed in prior exchanges between the state and the city, although it was not part of the city's Nov. 20 offer. 

Dollar added that he hoped any final agreement would garner enough support that lawmakers would not feel the need to get involved. 

Others watching the negotiations include boosters in the community who have, at times, offered to help the city develop the destination park concept. 

"The Dix Visionaries appreciates the continued efforts of the city and state as they work out the details for this 306-acre park," said Greg Poole Jr., the president of the booster group. "We look forward to celebrating with everyone once the deal is done."

The Dix Visionaries board includes Jim Goodmon, the president and chief executive of Capitol Broadcasting Co., the parent company of WRAL-TV and WRAL.com.


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  • Bill Mooney Dec 15, 2014
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    You can't trust these legislators. They balked on the previous deal, which was fine for the State but they wanted to posture. Now they seem like a banana republic, where you have to worry that each new ruler will undo the agreements of the previous administration. McCrory seems incompetent and unable to get things done.

  • Perry Woods Dec 13, 2014
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    The original deal was a good one for the State. It is the second highest paying lease they hold. The property would be improved, and at the end of the day, the State would still own it. The Joke of Sen. Hise talking about it needs to help mental health is several fold. One, his county bought land from the state for $1, and many communities lease land from the State for parks for $1/year including Senator Berger's district. Two, if they really cared about mental health, they could re-open the hospital, and/or expand medicaid, both of which would do more than even $80 mil in 1 time dollars. Three, as the State's capital, a Dix Park would benefit all of our state's citizens, from children on field trips to those visiting Raleigh because it has become a destination city.

  • wolfblitz79 Dec 12, 2014

    View quoted thread

    It was a great deal for Raleigh but a terrible deal for the rest of the State.

  • dwntwnboy2 Dec 12, 2014

    The state should have honored the original, legal, signed deal done by previous administration. The GOP just cant stand Gov Perdue did anything and just like the GOP in DC, they want to tear down ANYTHING a Democrat in office does. Just look at the "roll-back" of regulations on air, water, Wall St etc.

  • Russell Chapman Dec 12, 2014
    user avatar

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    Opening the land to private use often leads to urban sprawl and housing that isn't affordable except to the super rich. Although a portion can and should be opened to private development, most of the land should be made available to all NC citizens in the way of a public park, theaters, etc.

  • Todd Jenkins Dec 12, 2014
    user avatar

    Let's just be honest…the city wanted a bargain but it's not the flea market…it's fair market...

  • Obama-in-2016 Dec 12, 2014

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    Why not auction Dix? What's the problem with that?

  • town guy Dec 12, 2014

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    Yes that's an idea. A very bad one.

  • miseem Dec 12, 2014

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    I don't know how you can call giving a sweetheart deal to Raleigh "giving" it to her pals, unless you think she would get a kickback from the city. And there is no evidence of that. However, I do think that whatever is done with the property should be beneficial for of all the people in NC and some of the property to remain set aside for Triangle area mental health services. As far as provisions for the property to be used for mental health services, no legal authority has spoken out about this, so it does not appear to be an absolute restriction on the use of the property. If there were such a provision, I'm sure it would have been brought up by now.

  • Grand Union Dec 12, 2014

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    Except of course it was the private insurance companies that cancelled the policies, not the ACA......they could have simply amended them, just like they do every other year....funny that they didn't....I wonder why.
    Still its interesting you deflect from McCrory.....because Obama was not involved in this shakedown but McCrory is.....