State Politics

NC Senate bill would sell Dorothea Dix site to highest bidder

Raleigh has offered about $38 million for the Dorothea Dix campus; the state proposes to keep 64 acres and sell 244 acres to the city for about $52 million.
Raleigh has offered about $38 million for the Dorothea Dix campus; the state proposes to keep 64 acres and sell 244 acres to the city for about $52 million. Staff photo by Shawn Rocco

A bill filed late Thursday by three Republican N.C. senators would put the 308-acre Dorothea Dix property up for bid – likely revoking a deal reached between Raleigh leaders and Gov. Pat McCrory to create a park.

Senate Bill 705 calls for ensuring “the fair sale” of the former psychiatric hospital campus by using the state’s standard procedure for surplus property. Bidding would start at $52 million – the amount Raleigh had agreed to pay after months of negotiations with the McCrory administration.

The bill is sponsored by senators Ralph Hise, Louis Pate and Tommy Tucker – the same trio who sponsored the bill two years ago that revoked Raleigh’s original lease on the property, which had been signed by outgoing Gov. Bev Perdue.

Tucker, a Waxhaw Republican, said Thursday evening that the price tag negotiated by McCrory isn’t a good deal for the state.

“I just believe that the property is worth more than we’re being offered,” Tucker said. “It’s a big piece of property in the middle of a metropolitan city.”

He said the state will likely spend $100 million to build a new headquarters for the Department of Health and Human Services, which currently occupies part of the Dix site.

“We’ve got to build an office and parking deck for 2,000 people,” he said. “We need to get the most value we can.”

Raleigh would be refunded any money it has already paid for the original lease, but the city would likely have to compete with any private sector bidders on the property. The bill would require proceeds from the sale to be used for mental health programs.

Supporters of the city’s plans for a “destination park” said they hope the bill will be defeated.

“It’s upsetting that they’re bypassing the normal process by which the state disposes of property and trying to undo a deal that the governor and a whole lot of stakeholders worked really hard to come to,” said Rep. Grier Martin, a Raleigh Democrat.

Raleigh City Councilman John Odom said private development on the site would be “a downturn from the direction we’re trying to go.”

“Raleigh’s parks department can turn this into an unbelievably great park for all of North Carolina,” he said.

In January, Raleigh Mayor Nancy McFarlane and McCrory stood together at the governor’s mansion to announce that the state would sell the entire Dix property to Raleigh for $52 million, while leasing space to the state Department of Health and Human Services on the campus for as long as 25 years.

After debate over who’s responsible for environmental contamination at Dix, the deal requires the state to clean up the site to “standards acceptable for recreational use.” Tucker says McCrory shouldn’t have agreed to that.

The sale agreement hasn’t yet been finalized. The terms require a vote by the Council of State, which hasn’t yet met to discuss the deal.

Tucker said he thinks Raleigh would likely have used part of the property for retail development and a hotel. “I can assure you that selling it to Raleigh, it would not be totally utilized for a park,” he said.

The senator stressed that the bill still allows the city a fair shot at owning the property. “I think Raleigh can probably do whatever it needs as long as the voters approve the park bond,” Tucker said.

But Odom says $52 million is already a high price. “I’m not willing to break the bank to make the state happy,” he said.

Sen. Josh Stein, a Raleigh Democrat and an attorney, said the legislature’s power over McCrory’s deal is unclear. “It’s a very interesting legal question,” he said. “There is a valid contract between the state and the city, and I don’t know that the legislature has the right to interfere with an existing contract.”

But Stein said he hopes the dispute doesn’t wind up in a courtroom. “This needs to be stopped from the get-go,” he said.

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