State, Raleigh close to deal on Dix campus

Posted November 26, 2012 5:37 p.m. EST
Updated November 27, 2012 11:02 a.m. EST

— The Dorothea Dix campus will become a 325-acre "destination park" under negotiations between the City of Raleigh and Gov. Bev Perdue's office that could be final as soon as next week.

Under the current incarnation of the deal, the state would lease all 325 acres of the Dix property to Raleigh. The city would then lease back a portion of the property to the state. As detailed by Perdue Deputy Chief of Staff Kevin McLaughlin, there are two options for this lease-back arrangement:

  • If the state is able to move forward with the consolidation of DHHS, the city would lease back the property for 18 months. At the end of that term, DHHS would be in its new home and the city would have complete control of the property.
  • If the state isn't able to complete a consolidation deal, its lease on its existing buildings would be for somewhere between 12 and 15 years. That would give McCrory and lawmakers time to determine whether and how to consolidate the state agency.

Raleigh City Manager Russell Allen would not comment on the potential outlines of the deal and Mayor Nancy McFarlane did not return a phone call seeking comment.

Documents obtained by WRAL News show that Perdue and her staff have been working on a deal for months and that they have discussed both an outright sale to the city as well as an arrangement under which North Carolina State University would own and manage the property. 

Plans for the Dix property, which was established as the state mental hospital in the mid-19th century, have been developed in concert with plans to consolidate the N.C. Department of Health and Human Services. Currently, DHHS is spread over 60 buildings throughout Wake County, including many on the Dix campus. Kevin McLaughlin, Perdue's deputy chief of staff, says Perdue hopes to consolidate DHHS into four or five buildings somewhere away from the Dix campus.

"It is certainly my hope that we will have things in place to bring to the Council of State," McLaughlin said. The council is a group of 10 officials elected statewide such as the governor and attorney general who approve all lease and sale transactions involving state property. Their next meeting is Dec. 4.

Park would be Perdue's legacy

Perdue, a Democrat, will leave office on Jan. 5. Any deal for Dix would be among her last major executive actions before turning over management of the state to Governor-elect Pat McCrory, a Republican and former mayor of Charlotte.

"I have three months to do this project so time is everything," Perdue wrote in one email, expressing a sense of urgency to get the project finished before she left office. 

Rep. Nelson Dollar, R-Wake, questioned the timing of the deal. "There's no need to rush right now," he said. Dollar, a senior leader at the General Assembly, said that any decisions about the Dix campus' future should be left to the McCrory and the new legislature. "We don't need to be concerned about creating a legacy with that property as much as we need to be concerned about making sure that we use it for the highest and best use of citizens of this state." 

The mental health hospital at Dix has already closed. But a sprawling complex of buildings still dots the campus between Western Boulevard and Centennial Parkway in Raleigh. Lawmakers have been skeptical of Perdue's effort to consolidate those agencies and have openly questioned why she has pushed plans to move them to a new location rather than building on the Dix campus. 

However, if Perdue gets the approval of her colleagues on the Council of State, McCrory and fellow Republicans at the legislature may be left to manage any structure she puts in place.

Perdue was cagey about plans for the Dix campus when WRAL News asked her about potential plans for a property transfer in mid-October. At that point, the potential for a version of the plan which would give the property to N.C. State had begun to circulate at the legislature. 

"I can't give anything to anybody. Even a governor can't do that," Perdue said at the time.

Documents obtained from the governor's office show that Perdue and her administration have been discussing what to do with the Dix property for most of this year. In July, there was a plan to sell the property to the City of Raleigh. However, a disagreement over the "fair market value" of the property seems to have scuttled that deal. The state's asking price of about $85 million was deemed too high by those involved in negotiations, including retired businessman Greg Poole Jr. 

An email from Poole to Perdue showed that the city and its partners at the time pegged the value of the Dix campus closer to $35 million.

At that point, McLaughlin said, he asked N.C. State to get involved. 

Asked about the discrepancy between Perdue's statement and the written record, McLaughlin said he could not speak to what the governor meant. However, he said, the governor alone could not complete the transaction.

"I can assure you that any transfer of state land (will go) through a public process of a Council of State meeting, with an open agenda for folks to see prior to that meeting," McLaughlin said. 

N.C. State bows out

N.C. State's involvement spanned several meetings and lead to the development of a three-fold plan. The university's endowment would create a subsidiary to own and operate the campus.

That subsidiary would be charged with developing a park in cooperation with the City of Raleigh. At the same time, part of the property would have been used as a business and entrepreneurship incubator that would allow the university to create partnerships with business. A third component would have seen the development of the Dix Campus Collaborative, a think tank that would have tapped state agencies, the university systems and nonprofits to help better the state's mental health system.

N.C. State began to pull back from its involvement in late October. Documents obtained from the governor's office show that the university was concerned about potential environmental problems on the property. Those would include an old landfill on the property as well as problems associated with 150-year-old buildings. 

Reached Monday, NC State spokesman Fred Hartman would not say why the university pulled out of the project. Downplaying the university's involvement, Hartman said, "There were some interesting ideas discussed, but no conclusions reached."

However, documents obtained from the governor's office show there was considerable thought given to the plan, including a timetable for its roll-out. 

Raleigh would be state landlord

With N.C. State out of the mix, the governor's office once again has turned to the City of Raleigh. 

Various volunteer groups have pushed for the Dix Campus to become a park, including Dix Visionaries, which Poole helps to lead. He said that Dix Visionaries is not involved in the current set of negotiations. But he said the lease arrangement makes sense and would allow his group to begin raising private money to proceed with the park's development.  

"The highest and best use for this land as we, and a lot of people believe, is for a destination park," Poole said, describing a sprawling facility that would draw visitors from across the state. "The economic benefits are (seen early) and appreciated and recognized as time moves on."

Poole called the Dix campus "a jewel. We don't want to waste it. We don't want it squandered. It's got too much to offer." And he said creating a park was in keeping with the spirit of Dorothea Dix, the campus' namesake who helped found the mental hospital there.

"She believed in the healing power of nature," Poole said.

Neighbors, mental health advocates wait on outcome

Others are more circumspect about the potential deal.

"There are a lot of questions. I just don't understand the lease arrangement," said Deby Dihoff, an executive with the National Alliance on Mental Illness's North Carolina chapter and vice chairwoman of a group of mental health nonprofits that had pushed for proceeds from a Dix sale to be set aside for mental health programs. 

McLaughlin said that it was the governor's desire to set aside any proceeds from the lease for mental health programs. However, that would be a decision that the legislature would have to make. As well, McLaughlin said that there were still some discussion of creating the Dix Campus Collaborative, although that plan was speculative. 

Dihoff said all that speculation is disconcerting. Efforts to set aside trust funds for mental health have fallen short in the past, she said. And it's not clear if or how the original mental health mission of the property will be honored. 

"It seems to just be another instance where mental health is not getting a fair shake," she said.

Letters to the governor from neighbors of the property show there is some disagreement among those who live in the Boylan Heights neighborhood surrounding the campus. However, at least some neighbors will be happy to see a park take center stage on the campus.

"Certainly, in our ideal, the goal was 100 percent park," said Steve Bryan, president of the Boylan Heights Neighborhood Association. He had written to Perdue in June encouraging her to designate the campus as a "park district."

In his June letter, Bryan said that many in his neighborhood already viewed the campus as a park. And Monday he said that keeping that park-like atmosphere was important to many in the neighborhood.

"We love being on the edge of the downtown area, but we love having that green space available to us," Bryan said.

Others who have weighed in on the campus' future have urged Perdue to consider the historic value of the buildings. 

"All Faiths Chapel on the Dorothea Dix Campus was a spiritual home for many patients and staff for many years," wrote Clarence Boyd of Garner in one such letter. "As the debate continues as to the future of the campus it would be a travesty to see the Chapel destroyed or further neglected." 

It is unclear whether lease negotiations include any provisions for the maintenance of historic buildings. 

The Council of State is expected to meet Dec. 4. An agenda for that meeting, which would outline the potential deal, would typically be released by the end of this week.