RALEIGH — State senators will take up a bill Thursday that tosses out Raleigh’s lease on the Dorothea Dix property – leaving provisions for a smaller park, on less desirable land, that city leaders say falls far short of the “destination park” they’ve envisioned for years.

The bill, filed by Republican legislators last week, gets its first committee hearing Thursday before a Senate appropriations panel. It would revoke a lease agreement signed in December by then-Gov. Bev Perdue that allows the city to build an urban park at the former psychiatric hospital campus.

Raleigh Mayor Nancy McFarlane said the agreement shouldn’t be up for debate three months after it was signed.

“We think that the State of North Carolina has a moral obligation to honor its contracts,” she said. “I think it sends a bad message to the business community about doing business with North Carolina.”

Under the 2012 lease, the state retains ownership of the land; the city pays $500,000 a year, plus 1.5 percent annual increases, in a deal worth $68 million over 75 years. Backers of the new bill had asked Perdue to hold off on the agreement, calling it a bad deal for the state to lease the property at less than its market value.

Amy Auth, a spokeswoman for Senate leader Phil Berger, said the legislature is well within its rights to throw out the lease and that the action won’t harm future contracts.

“The original lease contained language providing for condemnation,” she said, referring to the December agreement.

The bill asks state agencies to return to a 6-year-old plan for the Dix property’s use. The state’s 2007 government facilities master plan calls for a new Department of Health and Human Services campus in one of two locations near the edge of the tract. About 200 of the 326 acres would serve as park land and open space; that figure includes the 41-acre soccer facility already on site.

Gregory Poole, chairman of Dix Visionaries, said a scaled-back park wouldn’t fit his group’s goals. “If we want a destination park, a park like Central Park in New York …we need the 326 acres,” he said. “You need a certain critical mass of land, property and buildings to be able to deliver the diverse attractions to have people go out of their way to come to Raleigh.”

Raleigh Councilwoman Mary-Ann Baldwin said the 200 acres don’t have much value. “The land that they want to give us is in a flood plain,” she said. “It’s on a former landfill – how do you build a destination park on inferior land?”

Under the 2007 plan revived by the legislation, park space would be on the land fronting Western Boulevard as well as on the acres immediately behind the old hospital buildings. DHHS offices would either cluster near Lake Wheeler Road or on the side closest to N.C. State’s Centennial Campus.

The bill would give state agencies a year to evaluate the plan.

If the legislation becomes law, Raleigh leaders said they’ll continue to fight for the lease. The City Council met for an hour Tuesday with lawyers.

“We’ve asked our attorney to start looking at all the possibilities,” McFarlane said. “That’s not a good use of taxpayer money.”

Debate over the bill so far has split largely along party lines, with Republican Wake County Board of Commissioners members supporting the legislation. Joe Bryan and Paul Coble have said the lease “hardly takes the value of the land into account and shortchanges anyone who valued the location and services of Dix Hospital.”

But while the Raleigh council’s lone Republican, John Odom, voted against the lease, he’s not a fan of the state stepping in to revoke it.

“I think the state ought to get out of our business,” he said.

Campbell: 919-829-4802 or twitter.com/RaleighReporter