Raleigh mayor says city, state ‘very close’ to Dorothea Dix property deal

08/28/2014 11:31 AM

08/28/2014 11:32 AM

City leaders are “very close” to a deal to acquire the Dorothea Dix property, Mayor Nancy McFarlane said after a one-hour special council meeting Thursday morning behind closed doors.

Park advocates have been planning for years to turn the former psychiatric hospital campus into Raleigh’s own Central Park. Their goal encountered a major setback last year when Republican state legislators sought to tear up the city’s lease on the property, which was signed by outgoing Gov. Bev Perdue.

For the past six months, Raleigh leaders and Gov. Pat McCrory’s administration have been in negotiations for a new deal, likely to be more costly than the original $500,000-a-year lease.

McFarlane declined to provide details about Thursday’s closed-door meeting, but she voiced optimism about the talks.

“I think we’re going to be reaching an agreement very soon,” she said.

The two sides have been exchanging written offers since March. In addition to the price, two main sticking points remain: whether Raleigh will get the entire 308 acres and whether the city will be responsible for cleaning up environmental contamination.

Gov. Pat McCrory had hoped to consolidate the Department of Health and Human Services at Dix, and his administration’s earlier offers called for keeping up to 60 acres for state offices. But backers of the park plan protested that the full 308 acres is needed to create a destination with regional appeal.

Each side also wants the other to pay for the environmental clean-up on the property. That’s estimated to cost between $10.99 million and $22.68 million, and both sides had sought to avoid the tab.

Raleigh opened the negotiations in March, offering to buy the entire 308 acres for $37.93 million. The state countered in April, proposing a price of $52.2 million for 244 acres.

The city responded in late April with a $51.26 million offer for 244 acres, but that proposal would have deducted the value of leasing back temporary DHHS office space – meaning the city would actually pay just $37.27 million.

A month ago, a letter from McCrory’s attorney voiced “disappointment” in the city’s July offer of $45 million for the entire property because it was less than the April proposal. He wrote to city officials that “the two sides appeared to move further apart,” and he criticized McFarlane for making critical statements to The News & Observer.

The letter offered to sell 244 acres at Dix for $44.09 million – just short of the $45 million Raleigh had offered in early July for the entire property.

McFarlane said Thursday that the city hasn’t issued a written response to that offer, which was received July 18. She says she hopes a formal response will be sent soon.

Before ending the special meeting, she announced that the council had “instructed staff” on the negotiations. City Attorney Tom McCormick has written the earlier offer letters to state officials.

The mayor said the Dix property will be a huge asset to Raleigh.

“I really don’t know of a city that has this kind of opportunity with 308 acres of open space,” she said.

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