As negotiations over the Dorothea Dix property dragged on for seven months, Raleigh officials grew frustrated with Gov. Pat McCrory’s administration, and Mayor Nancy McFarlane complained directly to the governor, according to city emails released this week under a public records request.
In a previously unreleased June letter to the governor, McFarlane said the state’s reliance on its own “flawed” appraisal has led to an “excessively high purchase price that the state is demanding for this property.”
In July, the state offered to sell 244 acres of the former psychiatric hospital campus for $44.09 million. The offer followed a city proposal to buy the entire 308-acre property for $45 million and turn it into a park. Neither side has made a written offer since.
The emails also reveal that the city hired former Republican legislator and lobbyist Chuck Neely to join a pair of Raleigh city attorneys at the negotiating table in March. Neely, who also serves on the board of the Dix Visionaries advocacy group, is paid $490 per hour. His services have so far cost the city $38,220.
Other highlights from the email records reveal that:
In June, city officials spent weeks drafting a letter to McCrory criticizing state-ordered appraisals used to determine the fair market value of the Dix land.
“From the early stages of the process, state officials involved in these negotiations have appeared unwilling to support your goal of reaching a deal based on fair market value,” McFarlane wrote in one draft of the letter.
The state’s appraisal pegged the value at $66 million, while appraisals ordered by the city came in at $37.93 million. McFarlane pointed out that the state appraiser valued Dix at $201,000 per acre in 2011, then increased the figure to $300,000 per acre this year.
She said that the comparison data are based too heavily on sales of smaller tracts of land.
Raleigh suggested hiring a third firm to evaluate the two appraisals. State officials refused.
Reached this week, McFarlane said agreeing on the value of Dix remains a challenge. “I think it’s all a matter of coming up with a price that everybody feels is fair,” she said.
Selling the deal
Throughout the talks, city officials have voiced frustrations with McCrory’s negotiating team.
In March, city attorney Tom McCormick asked Neely to join the city’s negotiating team. Neely responded with a four-page proposal outlining his services and the cost.
McCormick said he informed the City Council about the arrangement but didn’t seek other bids. “It was a small enough thing that we just contacted him,” McCormick said.
McFarlane said Neely’s expertise has been helpful. “It’s good to bring in a third party that knows everybody that’s involved, that may be able to bring a new perspective,” she said.
In a May memo featuring talking points for a meeting with the governor, Neely suggests telling McCrory to “lead his administration to make a deal quickly and not let the bureaucrats stifle the deal.”
Neely encouraged negotiators to argue that “the governor will lose credibility for not being able to deliver on his word that he and the mayor would strike a deal.”
He also suggested they point out the proposal’s support among business leaders, “including a lot of the governor’s backers and potential backers.”
McCrory, in turn, sought details of what the proposed park would offer.
“As the state contemplates our respective needs, it would be helpful to know what the city envisions for Dix Park,” Department of Administration attorney Bill Peaslee wrote to city officials in January.
Raleigh leaders, who have said they wouldn’t start the public planning process until a deal is signed, responded by asking N.C. State School of Design students to draw up renderings of what the park might look like. The student renderings ranged from a hub for entrepreneurs to a park with domes and play areas.
“It was independent of any direction from the city,” parks planner Stephen Bentley said.
Raleigh officials spent weeks trying to arrange a time for the students to present the designs to the governor, but the meeting never took place, Bentley said.
The two sides have also struggled to reach agreement on how much land Raleigh can buy. The state’s offers called for keeping about 60 acres to house the Department of Health and Human Services, but city leaders want all 308 acres to become a park.
Attorneys for the city encouraged state officials to put the office complex at another site, possibly state-owned land along Blue Ridge Road in West Raleigh. They also suggested using fewer acres and building taller office buildings, but McCrory’s team rejected those ideas.
Peaslee wrote in January that the taller buildings would increase construction costs, and Blue Ridge doesn’t have enough vacant land for a low-rise DHHS campus. “The state of North Carolina is very conscious about spending taxpayer monies,” he wrote.
Months past the original deadline for a deal, McFarlane says she’s still “hopeful” about reaching a deal soon but declined to provide more details.