RALEIGH, N.C. — Raleigh leaders decided Tuesday they would consider buying the Dorothea Dix Hospital campus from the state.

An advisory services panel from the Urban Land Institute recently presented the City Council with its recommendations on redeveloping the land, including preservation and financing options.

Under a plan presented to the council, the city would set up a nonprofit development corporation to buy the 300-acre property for an estimated $40 million and turn it into a major urban park.

Funds to acquire the campus would come from city bonds and private donations. The development corporation would manage the park.

The campus, which is on the edge of downtown Raleigh, has been the focus of much debate about what should become of the property when the mental health facility closes in 2008.

The city and Wake County are in the process of developing criteria for when bonds could be used. Some council members say the new standards should be put in place soon, so the deal does not pass them by.

"This opportunity that we have has literally fallen into our laps," said City Council member Phillip Isley. "This is something we have to be able to react to and act upon."

The first step in a very lengthy process is for City Manager Russell Allen and city attorney Thomas McCormick to work with the N.C. General Assembly on a bill regarding the sale of the Dix property to the city.

The Council hopes to approve the draft legislation at its next meeting on Nov. 21.

Afterward, the state must authorize the sale of the property.

North Carolina State University also plays a role in the plan. The city will meet with university officials at the end of the month to try to gauge NCSU's commitment.

The ULI panel also made other recommendations on possible uses of the Dix property, including a memorial to the hospital's founder, Dorothea Dix, a mixed-use development and preservation for existing trees.