Raleigh, N.C. — Cleaning up the leaky underground fuel storage tanks, wastes from a now-shuttered manufactured gas plant, asbestos insulation and stray chemicals left behind on the Dorothea Dix campus will be a multimillion-dollar challenge for anyone hoping to reuse the site.
Who will pay for that cleanup is a key point in negotiations between Raleigh, which hopes to turn the 306 acres near downtown into a "destination park," and Gov. Pat McCrory's administration, which has made it clear any deal would have to put the state budget's bottom line first.
Given the property's history as a farm, hospital and government center, very little in environmental surveys conducted during the past year comes as a surprise to state or city officials. City leaders say the state should be responsible for cleaning up any contaminants left behind since 1850, when North Carolina first started acquiring property for a state mental hospital. Dorothea Dix documents
"Most state and federal rules say that, if you made the mess, you should clean it up," Raleigh Mayor Nancy McFarlane said.
The city asked the state to take on the cost of environmental cleanup in an offer to buy the property this March. But as part of a counteroffer, lawyers for McCrory said the city should take on this cost.
"If the state wasn't selling the property, we probably wouldn't be doing a whole lot (of environmental remediation) work," said Bill Peaslee, a lawyer with the Department of Administration who has been involved in the negotiations.
More than just the environmental cleanup costs separate the state's and city's opening bids over the property. The state has offered $38 million for the whole 306 acres, while the state has asked for $58 million in exchange for 242 acres, with the remaining property staying in the state's hands as home for the Department of Health and Human Services.
But the environmental issues may be some of the diciest for both sides to deal with, not least because the ultimate costs associated with the cleanup and the scope of the problems on the property is not entirely certain.
Report: Workers not at risk
The last patients left Dorothea Dix for a newly constructed psychiatric hospital in Butner in August 2012, leaving behind a hodgepodge of buildings now mainly used as office space for DHHS. In the run-up to the long anticipated move, various interests have jostled over the fate of the campus, perched on the rolling hills overlooking North Carolina's capital city. Timeline: Decisions about Dix property
City leaders and local boosters have been championing the idea of a destination park that would provide both passive recreation space as well as an attraction that would draw residents from across the state. That idea was central to a deal inked by Gov. Bev Perdue, a Democrat, to lease the property to the city during the waning days of her term in late 2012.
Mental health advocates have long called for the property to retain its historic mission. State lawmakers cited that sentiment when they pushed a bill that would have erased the lease deal last year. They also cited 19th-century deeds that seem to restrict the uses to which the property could be put, but ultimately backed off what would have been cause for a legal showdown.
Instead, McCrory and McFarlane agreed to put the lease on hold while the state and city attempted to reach a new deal. Cary-based Duncklee & Dunham led an environmental review of the property as part of those new negotiations. David Duncklee, president of the firm, referred questions about the report to the city. Through a spokesman, city staffers declined to comment directly on the report.
Although contaminants including diesel fuel, arsenic and thallium were found in the soil and groundwater on the property, the environmental review didn't find anything that forced the state to close any of the buildings or change how it is using the campus. The most immediate concern was raised by a finding that mercury vapor was found within the McBryde building, which had served as the main hospital building.
The building is now office space. Mercury exposure can injure brains and kidneys and cause other health problems. But a study by Raleigh-based Terracon Consultants "did not collect readings that appear to indicate gross contamination of the building or the presence of large amounts of elemental mercury that would require remediation."
Kevin Howell, a spokesman for DHHS, said "there are no limitations on use of certain buildings" as a result of the environmental studies. A spokeswoman for the State Employees Association of North Carolina, which represents many of the employees on the Dix campus, said none of its members has raised concerns about the campus' environmental issues.
Peaslee said the state is conducting some follow-up testing on groundwater, but there's little the state would do in response to the environmental studies short of some decision to renovate, demolish or replace the campus' existing buildings.
Future costs are uncertain
A letter attached to the city's offer to buy the Dix property estimated that environmental cleanup costs would range between $10.9 million and $22.7 million. The ultimate cost depends on a number of factors, including the final deal struck between the city and state and how the property is used.
"A destination park has thousands of different possibilities," McFarlane said. "That's part of the master planning process, so it's hard for me to say what's going to be there."
A large part of the city's environmental cleanup estimate is associated with removing asbestos – cancer-causing material once widely used for insulation – from buildings on the property. Work by Greensboro-based D.H. Griffin pegged the asbestos removal at $3 million, but reviewers with Duncklee & Dunham pointed out that D.H. Griffin was not able to access every building.
"Based on our experience, this cost is on the low end of a range that commonly extends into hundreds of thousands of dollars per structure," Duncklee wrote in a letter to the city.
The consulting firm said the city should budget between $7.8 million and $11.8 million for asbestos removal.
If the state continues to use some portion of the property, whatever asbestos-related costs there are would remain with the state. Meanwhile, if the city gets its wish and buys the entire tract, some buildings may be demolished and others rehabilitated.
"It's possible that some of those buildings are rehabilitated and restored in some way that enhances the park," McFarlane said.
Dix Visionaries, an advocacy group of local business and nonprofit leaders that is raising money for a park project, has also been examining the report.
"The Dix Visionaries, in cooperation with real estate experts, are reviewing both appraisals and the environmental assessment with a fine-tooth comb," said Gregory Poole Jr., the group's chairman. "We will share our evaluation when that process is completed. We firmly believe that it is important to conserve all of the acres on the property for a world-class destination park. We are confident that all sides will realize the economic benefit that destination parks provide to great cities."
Turning dirt may turn up contaminants
For a layman, the environmental assessments of soil and water on the Dix property can seem alarming.
Sampling on the site found elevated levels of arsenic, lead, antimony and thallium, among other substances that can be harmful to humans.
"There definitely has been a lot of activity and definitely some legacy pollution," said Owen Duckworth, a professor in North Carolina State University's Department of Soil Science.
After briefly reviewing the Duncklee report, Duckworth said that some of levels of toxins found would require remediation, depending on how the site was used in the future.
"It's all about exposure," he said. "If you were planning on changing the land use on this so that you'd have a lot of people coming to the site, it changes the calculation."
Ultimately, it will be up to the state Department of Environment and Natural Resources to determine what substances pose the biggest risks and what the property's owners have to do about them.
Some of the contaminants found on the property have obvious sources. For example, diesel fuel likely leaked from an underground storage tank.
Due to a lack of documentation, it's hard to say where some of the other contaminants documented by the Duncklee & Dunham report came from, but there are some reasonable guesses.
Thallium, for example, is a sulfate that was used to kill rodents until it was banned for that purpose the 1970s. It might have been used to keep rats and mice away from crops when there was an active farming operation on the property.
Coal was burned at a manufactured gas plant, power plant and steam plant on the campus.
"We could not determine the disposal location of the coal ash," said the report, referring to the material left over after coal is burned for fuel. This is the same substance involved in a toxic spill on the Dan River earlier this year.
"This ash," the report continues, "may have been disposed at the subject site or elsewhere on the property that was formerly part of the Dix campus."
Several of the toxins found on the campus would be consistent with coal ash disposal, including lead, mercury and thallium.
"Back then, we didn't really have the environmental awareness, so there are lots of dump sites not only here but around the country from well-meaning government agencies," Duckworth said.
He said there is nothing so toxic indicated in the reports findings that would prevent the site's redevelopment.
The Duncklee & Dunham report suggests applying for funding help from federal and state brownfields programs, which provide money for redeveloping contaminated sites.
McFarlane said it was too soon to contemplate going through the complicated brownfields application process. Raleigh leaders, she said, had not settled on a way to pay for the property, although a line in the city's initial offer to buy the property said it was contingent on bond financing. It's unclear whether that bond could also help pay for the site cleanup.
First, McFarlane said, a deal needs to be reached on the property, including how much of the 306 acres the city will be able to buy.
"You obviously can do more with 306 acres than you can with 242," she said.