Negotiations begin in earnest for Dorothea Dix property

Posted March 10, 2014
Updated March 11, 2014

Dorothea Dix property in fall

— A new round of negotiations between Raleigh and state officials over the fate of the Dorothea Dix campus began in earnest Monday with new appraisals and an environmental impact study of the 306-acre site in hand. The two estimates of the property's value are $28 million apart, but both sides say the talks are off to a "productive" start.

City leaders would like to create a massive park near the heart of Raleigh, while state leaders say they want to make sure they protect the interest of taxpayers across the state and have a place to house the Department of Health and Human Services, much of which is located on the property. 

City and state leaders have been at odds over the fate of the campus, which sits on the edge of downtown Raleigh, since then-Gov. Bev Perdue signed a controversial lease deal during her final weeks in office in December 2012. Republican legislative leaders, particularly Senate President Pro Tem Phil Berger, soon objected to the deal and threatened to throw out the lease entirely. 

But by the end of last year's legislative session, House leaders and Gov. Pat McCrory's office brokered a "standstill" agreement under which the city would hold off on enforcing the provisions of the Perdue lease while a new deal was worked out. 

That agreement called for the city and the state to finish an environmental assessment of the property by March 1. Both sides have also completed appraisals of the property. 

"We've just started talking," said Bill Peaslee, general counsel for the Department of Administration, which is leading negotiations on behalf of McCrory. 

An appraisal completed in January for the state estimated the value of the property at $66 million. A separate estimate of the property's value submitted in February fixed the value closer to $38 million. Dorothea Dix Wachtel appraisal for Dorothea Dix property Dorothea Dix property in fall Don Johnson appraisal report for Dorothea Dix

In the past, wide differences over the actual value of the property have scuttled negotiations. But Peaslee and City Attorney Thomas McCormick both said the wide variance wasn't an issue in negotiations – yet.

"The problem in valuing the Dix campus is how unique it is," Peaslee said. There's no other tract of land comparable, either in size or in proximity to downtown Raleigh, so estimates of its value are speculative. 

Perhaps most encouraging, neither side expressed concern about an environmental assessment that looked for contaminants on the property, which has been home to a landfill, a power generation station and asbestos-lined buildings. 

"Everybody expected there to be some contaminants just based on the uses that had been located at the property," McCormick said. 

The Dix campus is so named because 19th-century mental health reformer Dorothea Dix helped establish the state's first mental hospital there. The last patients left Dorothea Dix hospital in August 2012, but the DHHS headquarters and many administrative divisions are still located on the property. 

City leaders and volunteers have been pushing for years to use the Dix campus as a central park. But they have been unable to reach a permanent deal with state leaders, with sticking points at various times involving a price for the 306 acres and who would assume liability for environmental contamination on the property. The Perdue lease could have been the final deal, but Republican lawmakers in the General Assembly said they will not let it stand. Dorothea Dix property Dorothea Dix documents

Peaslee said the state still hopes to use part of the property for DHHS headquarters. The question the city still has to answer, he said, is how much of the property it absolutely needed.

If the state retains only a small portion of the property, he said, it might find itself building taller and more expensive structures. If that's the case it's important that the state gets fair compensation for its land, he said.

"The governor has to look out after the interests of all the taxpayers in the state," he said.

McCormick said the city wants the entire site He would not comment on whether the city would accept any deal that left some of the property in the hands of the state. 

The standstill agreement signed last year said the state and the city would conclude negotiations by June 1. That would give lawmakers time to give their blessing to any deal crafted by the Governor's Office and the city. However, both Peaslee and McCormick said it was possible that negotiators could ask for more time.


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  • Forthe Newssite Mar 11, 2014
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    View quoted thread

    Agreed, BUT It is also very clear to me that we MUST have a facility for our mentally ill, why not refurbish what is there, do the right thing......the land/buildings should be what they were meant to be not some monstrosity of asphalt and concrete w/ not the first tree or blade of grass.

  • K Hope Capps Mar 11, 2014
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    They want to break the lease to sell the land to the highest bidder. That is the only reason they want that land. And it's a shame. It should be some sort of park.

  • Nicole Collins Mar 11, 2014
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    This land was meant for the mentally ill and deeded to the state for that purpose but greed has taken over. The only thin that should be discussed is which part of the land are they going to build a new mental hospital. The one in Butner is not big enough and difficult to staff. There are thousands of employees on the campus now. Where do you propose moving them that will not cost the tax payers. Currently they are on state owned land not paying rent. Move them to buildings downtown and lease those buildings is not cost effective. That is the study they need to be doing.

  • John Paul Bertke Mar 11, 2014
    user avatar

    "The Republican-led NCGA demonstrated they cannot be trusted. How can any negotiations be pursued when Republicans will simply break contracts and agreements?" - jackjones2nc

    It's easy to politicize the Dix problem, but just as easy to solve it.

    First of all, we can safely say: Republicans could care less about investing in a new mental hospital at Dix. That era is long over. And Republicans could care less about whether Raleigh gets a park. Rich people don't go to public parks and beaches. They have their own parks (country clubs) and their own beaches (Figure 8 or Bald Head) or fly to Bora Bora.

    So, there are 2 likely reasons for the Republican obstruction, beside the obvious - that obstructionism is their first love and defining characteristic.

    1) They plan to honor the legally signed contract - a couple months before the 2014 or 2016 elections. Or 2) They have friends who want the land for another purpose, which would also explain why the wealthiest power-brokers are mum.

  • Red Sox Nation Mar 11, 2014

    THOMASL - New psychiatric facilities are being built all across the state.

  • ThomasL Mar 11, 2014

    As a native of this state and child of two parents that worked at Dix it was meant for the mentally I'll and should have been updated with new buildings for these people(fine example boy that stabbed grandma,women that drove into ocean trying to kill kids!)there are plenty of those needing help but it seems all the outsiders(not from this state) want a pretty little park because they moved here in a house with .25 acres and have nowhere for there children to play or walk there 10 dogs..

  • AncientPirate Mar 11, 2014

    Currently this beautiful land is practically wasted. There's plenty of room to accommodate everyone. If they won't make it a city park, why not make it a state park? I'd much rather see any kind of park or natural use of the land versus covering it with buildings. But as it is, it's 300 acres of sprawling land with just a few buildings on it. The state workers don't even get to enjoy it except walking to/from their car, looking out the window or eating lunch outside. It's a ghost land outside the hours of 9-5 M-F.

  • Jack Jones Mar 11, 2014
    user avatar

    The Republican-led NCGA demonstrated they cannot be trusted. How can any negotiations be pursued when Republicans will simply break contracts and agreements?

  • dlnorri Mar 10, 2014

    Wakefield seems to be getting better than 500k/acre for developed land in Renaissance Park. If it costs 150k/acre for such development (sidewalks, pools, community center, roads, storm-water etc); there is 350k/acre value in the property (the property is worth way more than 28M, unless there is some tremendous disposal/clean-up costs identified). I hope the city can close deal and get the land, even if it means bonds or taxes. But the city should pay the state fair value. It is a priceless gem to have in the public domain.

  • Dean Logan Mar 10, 2014
    user avatar

    I never see the part where that closing the hospital breaks the agreement for the state to have the property in the first places. Aren't the heirs to this property now the rightful owners?