RALEIGH — In their latest proposal to buy the Dorothea Dix property, city leaders are offering $51.26 million for 244 acres of the former psychiatric hospital campus – if the state throws in a 7.3-acre chunk of vacant land at the Governor Morehead School for the Blind.
The new offer – dated April 28 and released Thursday – comes far closer to Gov. Pat McCrory’s proposed sale price of $52 million than the city’s initial offer of $38 million. In the letter, city attorney Tom McCormick also proposes an alternative arrangement: leasing the property at three times the cost of the original lease signed by outgoing Gov. Bev Perdue in 2012.
Under the lease option, the old agreement with Perdue’s administration would remain intact with the annual payments increased from $500,000 to $1.6 million. State Senate Republicans suggested the $1.6 million lease price in their bill last summer, arguing that the higher figure represented a “fair market value” agreement.
Both scenarios would allow the state to keep about 64 acres to house headquarters for the Department of Health and Human Services, leaving 244 acres for Raleigh.
But the new proposal includes unused fields at the Governor Morehead School, located on the north side of Western Boulevard. The school property was considered last year as a possible addition to the Dix sale, but the idea was dropped following outcry from advocates for the blind. The latest proposal doesn’t affect the school’s operations.
“Gov. McCrory thoughtfully suggested that this property could be useful to the city in improving connectivity between Pullen Park and the Dix property,” McCormick said in the letter.
A spokeswoman for Senate leader Phil Berger said he has no comment on the offers while negotiations continue.
The National Federation of the Blind of North Carolina had opposed the sale of the school itself, but the group has said it would support a deal that offered the little-used field and running track to Raleigh.
Even with the Morehead property, the offer’s terms fall short of the 300-acre park envisioned by boosters who’ve been lobbying for the project for years. Bill Padgett, president of Dix306, expressed disappointment in the offer Thursday.
“We think (300 acres) is really the minimum of what can make this work as a fantastic central park in North Carolina,” he said. “It’s a special place, and not having all the acreage is going to diminish all the impact.”
In negotiations so far, the state and city have disagreed on who should clean up environmental contamination, a process estimated to cost between $10.99 million and $22.68 million. McCormick’s letter proposes a compromise on the cleanup: putting $10 million of the purchase price into an escrow account for 15 years, with the state earning interest on the account while the city uses it to fund the cleanup. Any money left over after 15 years would go back to the state.
If the state accepts Raleigh’s offer, the city won’t be on the hook for a $51.26 million check. That figure includes the projected value of a $1-per-year lease of the 90 acres. McCormick calculates the lease to be worth $12.43 million, meaning Raleigh would pay $38.84 million to close the sale.
Councilwoman Mary-Ann Baldwin has said the purchase would be funded through a bond issue, possibly put to a referendum this fall. But McFarlane said Thursday that the council hasn’t yet decided on the funding source.
Campbell: 919-829-4802; Twitter: @RaleighReporter