Dix deal still in limbo after two years

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 documents

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."

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." 

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. 

Under 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. 

"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. 

Although 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.