Raleigh, N.C. — The House Judiciary Committee voted unanimously Wednesday afternoon to rewrite Senate-passed legislation in an attempt to resolve the ongoing battle between city and state over the Dorothea Dix property in Raleigh.
The bill would allow the state to negotiate new terms to sell a large chunk of the Dix property along with land used by the Governor Morehead school to the City of Raleigh.
As with a bill that cleared the Senate earlier this year, the House version of Senate Bill 334 would effectively undo the deal signed by Gov. Bev Perdue on her way out of office that leased the 325-acre Dix campus to Raleigh for a regional park. But unlike the Senate bill, the House version offers some concessions to the city, the biggest of which opens the way for negotiations to sell the Morehead property, which would link the Dix campus to Pullen Park.
"Everyone can agree that having a solution is better than not having one," said Jordan Shaw, a spokesman for House Speaker Thom Tillis. "We hope this bill will make it possible to find a solution."
The Senate-approved version of the bill would have used the state's powers of condemnation to take the lease from the city, a strategy that prompted threats of lawsuits.
The House version of the bill, a draft of which was reviewed by WRAL News Wednesday morning, already has the blessing of city officials.
The bill lays out a number of potential legal problems with the Perdue-signed lease, including:
- A potential issue with the original property grants being given "in trust." Legislative lawyers say they are unclear on what exactly those deed provisions mean, but say it could open the state up to a lawsuit by people who need mental health services. That issue, they say, could be cured if proceeds of the sale were put toward mental health, but not if the sale is below fair market value. Lawmakers say the Perdue lease under-values the property.
- The fact the governor may have exceeded her authority when she signed the lease. As WRAL reported last month, the Council of State did not receive notice of all the lease terms, including a provision that allows the city to borrow money against the value of their interest in the Dix property. The Council of State did not have notice of that "leasehold interest" provision when it granted the governor authority to sign the deal.
- A problem with when the lease was signed. The governor is required to give the General Assembly 30 days notice of any transaction that sells or leases property. Perdue signed the Dix lease 28 days after notifying the legislature.
Citing this litany of faults, the new draft of the House bill dissolves the Dix lease. However, that provision doesn't take effect until April 1, 2014, giving the state and city time to negotiate a sale while preserving the city's right to sue if a deal can't be reached. House lawmakers are hoping their approach will make the city decide not to sue and rather renegotiate the deal.
City leaders, including Mayor Nancy McFarlane, have said they believe the lease is legal and don't agree there are any potential legal defects. Dix Visionaries, a private group helping to raise money to build the park, also backs the lease. That House bill attempts to appease those parties rather simply retake the property by force of law.
The bill calls for the state to preserve some of the property as a location for the Department of Health and Human Services. The rest of the land would be sold to the city at fair market value as a cash sale, an installment purchase or some other method agreeable to both parties.
As an enticement to the city, the bill also says the the Governor Morehead School grounds could be included in the deal. Until Wednesday, the Morehead property has not been part of the negotiations.
Further, the bill reserves any proceeds from the sale for mental health purposes.