GOP lawmakers seek to wipe out Dix property lease

lbonner@newsobserver.comMarch 14, 2013 

  • Who’s behind the bills

    Senate bill 334 has three primary sponsors, all Republicans:

    • Ralph Hise, a two-term senator who represents Madison, McDowell, Mitchell, Polk, Rutherford and Yancey counties. He lives in Spruce Pine. • Louis Pate, who represents Lenoir, Pitt and Wayne counties. He’s serving his second term in the Senate after four terms in the House. He lives in Mount Olive. • Tommy Tucker, of Waxhaw, who has represented Union County for two terms.

    House bill 319 has four primary sponsors, all Republicans:

    • Justin Burr, who lives in Albemarle, and represents Montgomery and Stanly counties. He is a bail bondsman serving his third term. • Marilyn Avila, who lives in Raleigh and represents Wake County. She’s in her fourth term and is a former chemist and business owner. • George Cleveland, who has represented Onslow County for five terms. He is retired and lives in Jacksonville. • Pat Hurley, a four-term legislator, representing Randolph County. She lives in Asheboro.

  • What the bills do: • Direct the state Department of Administration to re-lease a portion of the Dix campus to Raleigh at “fair market value” • Designate that proceeds from the new lease agreement will fund mental health programs in the state • Preserve a portion of the property to house the consolidation of 2,500 DHHS employees onsite • Instruct the Departments of Administration and Health and Human Services to study recommended uses for the remainder of the property and report their findings to the General Assembly by March 2014 • Maintain the property for the purpose outlined in the original deed from 1848, which said the land was to be used for the benefit of North Carolinians with mental illness

— Republican legislators want to scrap a lease between the state and the City of Raleigh that would allow the city to build a major urban park on the coveted 325-acre property where the shuttered Dorothea Dix psychiatric hospital stands.

Identical House and Senate bills filed Thursday would tear up the agreement Raleigh officials and former Gov. Bev Perdue reached late last year. Under the bills, Raleigh would be able to lease a smaller portion of the land at “fair market value.” The bills do not specify the acreage that would be leased.

Park supporters were quick to express disappointment, while Democrats said it’s unfair for the state to break a contract.

But Republicans said they were seeking a better deal for taxpayers.

Senate leader Phil Berger, R-Eden, said the lease, which has the city paying as much as $68 million over 75 years, is a bad deal for state taxpayers and people with mental illnesses. The state’s appraisal in 2011, which didn’t assume that the land would be turned into a park, valued the property at somewhere between $58 million and $86 million.

GOP legislators failed last year to persuade Perdue and city leaders to put off the agreement until Republican Gov. Pat McCrory took office.

The bills call for the state to re-evaluate the use of the Dix land, allow the city to lease a portion of the property, and use the lease money for mental health purposes.

“The legacy of the Dix land was really so tied to services for the mentally ill, and that’s something that was ignored – has been ignored – in the transaction that Gov. Perdue entered into with the City of Raleigh,” Berger said.

The legislation would address three important issues, he said, by giving Raleigh the chance to lease some of the property, considering fair market value when pricing the land, and preserving the legacy of the property for care of the mentally ill.

Berger was a vocal opponent of the lease, but Raleigh city leaders were still surprised by the legislation.

“It was my worst nightmare,” said Raleigh City Councilwoman Mary-Ann Baldwin.

Keeping the land together and tying it to downtown and neighboring property has been central to the park vision, said Raleigh Mayor Nancy McFarlane.

The city worked for nine years on the deal, she said, and the needs of the mentally ill were not ignored. It’s up to the legislature to dedicate the lease revenue to mental health programs, she said.

“This is going to be a huge benefit to the state as a whole,” McFarlane said. “I just hope they are really looking at the total picture.”

Ten years in the works

Park enthusiasts began working to secure the land about a decade ago, soon after state officials announced Dorothea Dix hospital would close. The city reached an agreement with Perdue in November, shortly before her term ended. Dix Visionaries, a group of park supporters, was working to raise $3 million to pay for a park plan. Board Chairman Gregory Poole Jr. could not be reached, but the board of directors released a statement.

“Words cannot express how disappointed we are with the introduction of a bill that would put the preservation of the Dorothea Dix land in jeopardy. This lease was not a politically partisan act. ... We are hopeful that the legislature will honor the lease with the City of Raleigh and protect the land for generations to come.”

Raleigh City Manager J. Russell Allen could not say whether the state can legally cancel the lease.

“We consider it a valid, legal agreement with the state,” Allen said. “It certainly was entered into in good faith.”

The lease contract has a provision for terminating it when the property is taken by eminent domain for any public use.

Under the lease, the state retained ownership and the city paid rent of $500,000 a year with a 1.5 percent annual increase. The exact amount Raleigh would pay is difficult to project because the base rent is reduced to compensate for the land and buildings the state is still using. About 1,400 state Department of Health and Human Services employees work on the Dix campus. The Senate noted that the bill would allow the state to consolidate 2,500 DHHS employees on the Dix campus rather than find new offices for them.

With the state Department of Health and Human Services looking for a central location for all its offices, Rep. Marilyn Avila of Raleigh thinks the Dix property is the best place for consolidation.

“It’s much more beneficial for the people of the state whose property that is,” said Avila, a Republican and a sponsor of the House bill. “(It’s) not the City of Raleigh’s; it’s not Wake County’s.”

Democrats: A bad precedent

Democrats said it’s bad policy for the state to cancel contracts.

Sen. Josh Stein, a Raleigh Democrat and a park supporter, said Republican legislators are “breaking a contract in service of their petty political ends.”

Republican legislators have set a pattern of coming in to upend contracts or change local boards they don’t like, he said.

“It’s the height of arrogance,” Stein said. “Who will want to enter into contracts if, to pursue some political end, the legislature will just vitiate that contract? It’s not the mature and responsible way to govern.”

Staff writer John Frank contributed.

Bonner: 919-829-4821

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