Raleigh might get bank loan to finance Dix purchase
Posted May 18, 2015
Raleigh, N.C. — City officials are recommending that Raleigh get a 10-year bank loan to finance its $52 million purchase of the Dorothea Dix property from the state.
Mayor Nancy McFarlane and Gov. Pat McCrory signed an agreement a week ago for the state to sell the 308-acre site of a former mental hospital to Raleigh, which wants to turn the property into a major park near downtown.
Raleigh has until the end of the year to come up with the money to pay for the land.
City Finance Director Perry James is expected to recommend to the City Council on Tuesday that they use a bank loan rather than getting voter approval for general obligation bonds, according to council agenda materials.
Perry said the loan route would be faster – the city wouldn't have to wait until an October vote on the bonds – and possibly cheaper. A 10-year loan would carry a lower interest rate than bonds, which are paid off over 20 years.
The agenda materials don't outline how the city would pay off the loan.
The City Council is expected to hold a June 2 public hearing on the Dix purchase before voting on a financing plan.
The sale agreement allows the state to lease back some of the Dix land for up to 25 years to give the state time to move Department of Health and Human Services workers off campus.
The last patients left the Dix hospital in 2012.