The state has rejected the city of Raleigh’s offer to buy 308 acres of the former Dorothea Dix psychiatric hospital campus for about $38 million and instead has responded with a counter-offer.
The state does not want to sell the entire property, according to a letter from the governor’s office. Instead, Gov. Pat McCrory proposes to keep 64 acres for use by the state Department of Health and Human Services and sell the rest of the land to city for about $52 million.
It would be too costly to move the DHHS offices now on the campus, and the state doesn’t want to sell the land below “fair market value.”
McCrory sees a chance for a “win-win-win” solution to the long-running debate over the former psychiatric hospital, according to the letter.
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The governor wants a new central park on the property, space for a “consolidated and more efficient Department of Health and Human Services,” and for proceeds from the sale of the land to benefit mental health services in the state, according to the letter.
Mayor Nancy McFarlane said on Wednesday night that the response was a sign of progress as negotiations near a deadline. The governor and the mayor agreed last year to a cooling-off period, giving both sides a year to assess and appraise the land, with a goal of reaching a final agreement by June 1.
“I’m glad that they’ve responded with an offer, and it just shows a willingness to talk about it and negotiate,” McFarlane said.
Negotiations over the land began years ago. In 2007, former Raleigh mayor Charles Meeker offered $10.5 million, drawing scoffs from some lawmakers. Rep. Paul Stam at the time said $50 million would be more appropriate – and the state’s offer today is remarkably close to that figure.
McFarlane declined to comment on the new state proposal’s specifics – such as the state’s refusal to sell all the land – because she was still reviewing the offer and the land it includes, she said.
The land offered for sale by the state includes soccer fields built on a former landfill near Western Boulevard, the area leased to the Healing Place on the eastern side of the property and the property’s cemetery.
North Carolina’s government would keep land near the top of the hill where the DHHS offices are located. The city had offered to buy the entire Dix campus and lease the buildings and parking used by DHHS back to the state for up to 15 years at $1 per year.
The state also rejected the city’s proposal that the state pay for environmental clean-up costs, which may total $10.9 million to $22.7 million. The governor’s office argues that the clean-up wouldn’t be needed if Raleigh didn’t want to build a park on the site.
City Attorney Tom McCormick said the city had received the state’s counter-offer, but he declined to comment on the details.
“We haven’t had a chance to go through it yet,” McCormick said.
McCormick expects the city will respond next week.