State wants to keep a portion of Dorothea Dix property

Gov. Pat McCrory has rejected Raleigh's initial offer to buy the 306-acre Dorothea Dix campus. Instead, the state has made a counteroffer to sell a portion of the campus for more than city has proposed paying for the entire property.

Posted 8:56 p.m. Apr 9, 2014 — Updated 10:09 p.m. Apr 9, 2014

Mark Binker

RALEIGH, N.C. — Gov. Pat McCrory has rejected Raleigh's initial offer to buy the 306-acre Dorothea Dix property, choosing instead to make a counteroffer that would be more expensive and give the city less property to work with for a proposed central park.

"With our proposal, the Governor firmly believes that we have a potential 'win-win-win' solution for the City, the State, and our common citizens: A new central park on the Dorothea Dix property, space for a consolidated and more efficient Department of Health and Human Services, and proceeds from the sale of the Dorothea Dix Property to support the State's mental health mission," wrote Robert Stephens, McCrory's general counsel.

City of Raleigh offer to buy the Dorothea Dix property

State counter-offer for Dorothea Dix property

The city and state have been wrestling with the fate of the Dix campus for years, ever since North Carolina leaders decided to shut down the namesake hospital. Gov. Bev Perdue sparked controversy when she agreed to lease the property to the city in the closing days of her term.

In early 2013, Republican General Assembly leaders threatened to void the Perdue agreement by way of a special law. Instead, the governor and city leaders agreed to renegotiate the deal. The state's counteroffer represents the latest turn in {[a href="blogpost-2"}}negotiations that began in earnest only a month ago{{/a}}.

Counteroffer more costly for Raleigh

The state's counteroffer varies from the city's initial bid in three key respects: price, acreage and environmental cleanup costs.

The city proposed buying the entire property for $38 million. Under McCrory's counteroffer, the city would have to pay $54 million for 244 acres. The state would keep 64 acres to continue housing DHHS, which still has many of its administrative offices on the campus.

"The cost of relocating DHHS through acquisition of property or the displacement of State agencies on State property will be substantial. To reduce those costs, DHHS must remain on the Dix property," Stephens wrote. "The interests of the citizens and the taxpayers of the State must be protected in this transaction."

Raleigh's initial offer had also asked the state to bear between $10.9 million and $22.7 million in environmental cleanup costs associated with the property, which has been home to a small power plant, a landfill and buildings with their own individual issues.

"The State declines to assume any such costs as such costs would only be incurred by the City to use the Property as a 'Central Park' with a 'Destination Attraction.' The State does not dispute that there are various environmental issues," Stephens wrote.

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