$10.5 million offered for Dix

Two legislators laugh at city's bid

Staff WritersJune 15, 2007 

  • In announcing the city's offer for Dorothea Dix, Mayor Charles Meeker included an explanation how he arrived at a price of $10.5 million. The estimate is based on what the city has paid for other parkland and open space in recent years. Meeker said 100 acres of the Dix property is either prone to flooding or is located over landfill, and is therefore worth only $5,000 an acre. The remaining acreage was deemed prime parkland, and valued at $50,000 an acre.

— Mayor Charles Meeker made a formal offer for the city to purchase the Dorothea Dix campus from the state on Thursday, but the offer left several leading lawmakers unimpressed.

Meeker estimated the 306-acre site's value as parkland at $10.5 million, a figure far below the tens of millions of dollars some legislators want for the property, which overlooks the central business district.

Rep. Paul Stam, a Republican from Apex who serves as House minority leader, laughed when told of Meeker's $10.5 million offer for Dix.

"He's made an extremely lowball offer," Stam said. "I think the number should probably be closer to $50 million."

The General Assembly must approve the sale of the 150-year-old state psychiatric hospital, which is scheduled to close by late November. The state is opening a new hospital in Butner as part of a broader effort to reform North Carolina's system of psychiatric hospitals.

Meeker's announcement was an attempt to prod state lawmakers -- and the governor -- into embracing the idea of selling Dix to the city on the condition that it be turned into a "destination park."

By estimating Dix's value at about $34,000 an acre, however, Meeker might have hurt the city's standing with some lawmakers, especially those from outside the Triangle.

Tony Rand, the Senate majority leader, also laughed out loud when told of Raleigh's offer.

"I didn't even know it was for sale," said Rand, a Cumberland County Democrat, of the Dix campus.

Although Meeker estimated Dix's worth at $10.5 million, he also said the state should conduct an appraisal to determine its market value as parkland. The State Property Office has never appraised the property.

If put up for sale to the highest bidder, Dix would certainly be worth considerably more than Raleigh is offering, said John P. LaRocca, a senior vice president at Grubb & Ellis/Thomas Linderman Graham, a Raleigh commercial real estate company. The campus represents a rare large chunk of undeveloped land near downtown, where people are paying millions of dollars per acre.

"There's a lot more that could be done with that land than just parkland," LaRocca said.

Dix's size and unique location make it difficult to judge its potential value.

But developers who acquired 167 acres of undeveloped land in West Raleigh from the state sold it last year for $173,652 an acre. Also last year, the 152-acre Cheviot Hills Golf Course on Capital Boulevard just north of Interstate 540 sold for $25 million, or about $165,000 an acre.

Meeker insists the city shouldn't pay those prices because it is committing to creating an urban park that will be the Triangle equivalent of Central Park in New York City.

"We ought to pay a park price and the burden is on us to develop it," Meeker said.

Meeker was joined at Thursday's news conference by leaders of three park advocacy groups -- Friends of Dorothea Dix Park, Dix Visionaries and Dix 306.

Gregory Poole Jr., president of Dix Visionaries, said his group plans to raise more than $7 million from private donors to plan and develop a park.

Easley's office said the governor would not respond until he received, and has had time to review, a formal plan for Dix put forward by the city.

Earlier this year the governor proposed building an office complex for the Department of Health and Human Services on about 25 choice acres of the Dix campus. Other legislators have recommended that money from the sale of Dix go to the state's Mental Health Trust Fund.

One problem for Raleigh officials is that the more they have to pay for the Dix campus, the less money is available to transform it into Dix Park. Even with private donations, developing the park and all its proposed amenities will cost tens of millions of dollars.

Stam, a real estate attorney, said the Dix property should be formally appraised before the discussion goes any further.

"Just throwing numbers around isn't very productive," he said.

(Staff writer Jack Hagel and news researcher Brooke Cain contributed to this report.)

Staff writer David Bracken can be reached at 829-4548 or david.bracken@newsobserver.com.

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