Midtown Raleigh News

Raleigh, McCrory to negotiate new Dix campus lease

The fate of Raleigh’s lease on the Dorothea Dix property now rests in negotiations between the city and Gov. Pat McCrory, state officials said Monday.

Sen. Louis Pate, a Mount Olive Republican, introduced a bill earlier this year to scrap the lease for Raleigh’s 325-acre park, saying the agreement signed by outgoing Gov. Bev Perdue was a bad deal. Signed last December, the lease calls for Raleigh to pay $500,000 a year, plus 1.5 percent annual increases, in a deal worth $68 million over 75 years.

Now Pate says the legislature will let McCrory oversee a new arrangement that addresses Republican concerns.

“We’ll just entrust these deliberations to the parties that are in (the lease),” he said.

According to the governor’s office, the two sides now have what’s known as a “standstill agreement” on the lease. For the next year, no lease payments are due and neither party can sue while a new arrangement is hashed out. Both sides plan to conduct extensive appraisals and environmental assessments in the coming months.

“I think it’s good news,” Raleigh City Councilwoman Mary-Ann Baldwin said. “At least this gives us an extension to do a lot more due diligence and to negotiate something.”

By backing McCrory, Pate and fellow top Republican Senators are effectively endorsing the compromise bill introduced in late May. McCrory and the state House pushed a measure allowing a year to renegotiate the agreement as a lease or sale of the land, with the state keeping 30 acres to house the Department of Health and Human Services. Raleigh also would get a chance to buy the 40-acre Governor Morehead School property directly across Western Boulevard from Dix.

The Senate voted down the compromise in June, forcing private conference negotiations between the two houses. Pate said only one conference meeting was held on the bill before legislators moved on to other matters.

“That was prior to the governor taking a more active role in it,” Pate said. “Now that he’s done that, we’re stepping aside.”

Senate Republican leader Phil Berger had attacked McCrory’s plan in May, saying it merely extended “an unlawful lease” and “delays doing the right thing until 2014.” The Senate bill would have immediately revoked the lease, likely setting the stage for a lawsuit.

Pate stressed that legislators could still take action if they don’t like the governor’s new agreement. But as the General Assembly prepares to head home in the coming days, that won’t happen this session.

Don’t expect to hear much from Raleigh leaders as the talks progress. Mayor Nancy McFarlane – who has argued that the city’s original lease should be honored – declined to comment Monday, saying it’s now a confidential real-estate matter.

Both sides, however, are supporting Raleigh’s plan for a park on the former psychiatric hospital campus.

“I think we all agree that Raleigh needs a star-quality park, and we want to see that happen,” Pate said.