Case study

Made of masonry and brick in the mid-19th century, state mental hospitals were built to last, but they can quickly decay under the wrong circumstances.

Like a ship in drydock, the buildings deteriorate when empty. A tree limb falls through the roof or vandals break windows, letting rainwater in that rots the wood floors. Soon, the entire building is crumbling.

As in Raleigh, the Dixmont State Hospital near Pittsburgh was the direct result of the lobbying of mental health crusader Dorothea Dix. When it opened in 1862, it was one of the foremost hospitals in the country and an architectural marvel overlooking the Ohio River.

But after the state closed it in 1984, the elements began to take their toll. A major fire, vandalism and two decades of neglect eventually made restoration prohibitively expensive.

Last year, all of the buildings were demolished to make way for a Wal-Mart Supercenter.

"By the time it was torn down, there really wasn't anything else they could do with it," said Andy Hill, a police officer from nearby Rochester who runs a Web site devoted to photographs of the hospital.

At one time, the Traverse City State Hospital in Michigan appeared headed for a similar fate.

After the state transferred the 480-acre property to a redevelopment corporation, the hospital buildings sat idle for years. When a deal with a private developer fell through, a local company stepped forward.

The Minervini Group was well known for rehabilitating smaller buildings, but it had never done a project that large. To reassure the hospital's owners, the company agreed to immediately spend $1 million reroofing the main hospital building.

"One of the ways we could build trust was to invest that money," said partner Ray Minervini II.

The company then brought in a yoga studio and a coffee shop to draw visitors to what it calls Grand Traverse Commons. It has remodeled the south wing, now home to a fine Italian restaurant, an art gallery and condominiums, and it is starting work on the north wing.

How will Dix buildings be maintained?

Some buildings at Dix will be saved, but others are at risk. The legislature is considering renovating several buildings to keep 3,400 state Department of Health and Human Services employees working on Dix Hill. Unused buildings would be torn down.

Park advocates hope to renovate some historic structures for art galleries or other public uses, but they oppose things such as offices and condominiums. However, renovations would add to the bill of the park's owners.

The buildings could also be leased or sold to developers who would maintain or remodel them. In other states, special tax breaks have also helped.

Lesson: Want a big park and historic buildings? It's going to cost you.

Case study

State lawmakers eager to get rid of former state hospitals have often sold them for token amounts to a local government, nonprofit group or public agency that hoped to redevelop them.

Still, experts warn that a free property can end up being very expensive.

In 2002, the state of Massachusetts sold the Northampton State Hospital property for $1 to Hospital Hill Development LLC, a corporation set up by a nonprofit development company and a quasi-public agency to manage the site.

The final cost of redeveloping one-fifth of the 500-acre property is about $28 million, including removing asbestos and lead paint, updating water and sewer lines and tearing down a number of historic buildings, according to the city's economic development coordinator, Teri Anderson.

"There was a huge hidden cost," she said.

Projects that have had funding lined up ahead of time have turned out differently.

After the Athens Mental Health Center closed in 1993, the state of Ohio swapped the 700-acre property with land owned by Ohio University. That gave the aging buildings an owner with deep pockets.

Today, the land is home to a day-care center, a biotech research center, a leadership institute and the Kennedy Museum of Art.

Still, university planner Pam Callahan said that only about 40 percent of the hospital buildings have been renovated so far. The rest are waiting their turn in the college's construction budget.

"The property competes with many other needs on our campus," she said.

How will Dix be paid for?

The state legislature wants at least $40 million for Dix Hill. Under one plan, private donors would give $10 million. But no one agrees on exactly where to find the other $30 million.

The Raleigh city council has debated creating a special tax district on the property. There wouldn't be any new taxes, but as property values rose, the extra money coming into City Hall would pay off the debt.

But critics say that would put pressure on the park's owners to develop the property.

Park advocates think the tax district should be created on land outside the campus. They say that new condominiums and shops would spring up nearby if the property become a major park, and the taxes on that new development would cover the debt.

But Mayor Charles Meeker and some council members aren't sure the city should have any tax districts there. They think the city could pay off the debt from its regular budget.

That could also lead to development on Dix, if the city faced falling tax revenues from a recession in the future.

Lesson: Get local residents involved or risk anger and lawsuits.

Case study

Even in the best circumstances, the hospital properties can take years to redevelop. Experts say that it's critical to have an owner who is committed to historic buildings and open space in order to see the project through the inevitable problems that will arise.

After it closed the Danvers State Hospital, the state of Massachusetts kept control of the 500-acre property, but it allowed a citizens advisory commission appointed by the town to have a say.

The commission chose Archstone, a developer that promised to restore the Gothic brick central building that dated to 1878. But when Archstone backed out for financial reasons, the state chose AvalonBay Communities, a runner-up. That company decided to keep the facade of the main building, but it demolished 14 buildings.

Some town residents lost a lawsuit, and several members of the citizens advisory group said they were not happy with the outcome.

"We didn't really have control of the site," said Robert Pariseau, a retired engineer who led the group.

A similar process is going much more smoothly in Fergus Falls, Minn.

There, the state and the city worked as equal partners to redevelop the Fergus Falls State Hospital before it completely shut down. A city-appointed commission studied proposals, and the City Council had final say over which developers were picked.

If the city doesn't receive good offers on a building, then the state will tear it down.

So far, developers have been willing, and the state has turned over five buildings to be remodeled into high-end condominiums and offices. That has spurred other developers to consider redeveloping the central building, said Harold Stanislawski, executive director of the town's economic improvement commission.

"It's a massive project," he said. "But if we're going to be successful, we're going to have to work together."

Who would manage Dix?

Raleigh is considering creating a nonprofit development corporation to manage Dix Hill. A panel of experts from the Urban Land Institute proposed a seven-member board. Members would be nominated by nearby N.C. State University, Wake County, the legislature and a park conservancy, but chosen by the mayor of Raleigh.

If history is a guide, public involvement will continue to be controversial. The legislature passed a bill specifically to prevent Gov. Mike Easley from selling off the Dix campus. But lawmakers' efforts to include the public didn't resolve the concerns of park advocates.

Plans by Charlotte-based LandDesign and the Washington-based Urban Land Institute, both hired by the state, were roundly criticized by the public. A legislative task force's efforts were inconclusive. And park advocates say they still fear a backroom deal will decide Dix Hill.