Negotiations begin in earnest for Dorothea Dix property
Posted March 10, 2014
Updated March 11, 2014
Raleigh, N.C. — 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. Wachtel appraisal for Dorothea Dix property 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 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.