Filed Thursday, State Senate Bill 334, with its strong language condemning the Dorothea Dix lease, caught city officials and park advocates wholly off guard when it announced the drastic plan to retake control of the property.
The bill seeks to undo the lease by exercising an option granted to the state, which allows it to condemn and seize the property through eminent domain.
From the bill: “Chapter 1 of the Laws of 1848-49 authorized acquisition of that property in trust for the use and benefit of the North Carolina Hospital for the Insane; some or all of the deeds provided that the conveyance to the State was in trust for the use and benefit of the North Carolina Hospital for the Insane.”
This is an interesting interpretation of the source material. In Chapter 1 of the Asylums section of the 1848-1849 laws of North Carolina, the Dorothea Dix Property’s “acquisition” is incidental to the act’s true purpose, which is establishing a “State Hospital for the Insane.”
When the land for the hospital is mentioned in the old law, it is only in relation to the requirements it must meet – such as the availability of a “never-failing supply of wholesome water” and “cheerful views.” There is no language that indicates the land itself need be set aside as a preserve or established into any sort of trust.
The law, passed in a pre-Civil War era, did state that if “a person or persons shall make free gift of an available tract for the farm and site of said hospital, said Commissioners are hereby authorized to receive a deed of the same, in trust, for the use and benefit of the North Carolina State Hospital for the Insane.”
The land for the hospital was purchased by the state in three separate transactions spanning 17 years. As such, a land trust for the property was never established. It is unlikely that the hospital would have been allowed to close in 2012 if such a trust existed. The closest there ever was to a land conservancy trust for the property was one suggested in a 2005 joint Wake County and City of Raleigh concept plan.
The hospital’s closure, while not prevented by any trust real or imagined, did lead to an action well in line with the 166-year-old law’s intent of caring for the mentally ill. In 2012, the University of North Carolina agreed to spend an additional $40 million on mental health care.
The bill also makes the argument that the city signed a lease at below fair-market values, stating that the property has been the subject of multiple commercial appraisals and is therefore a valuable state asset.
One such study – conducted in May of 2011 by commercial real estate firm Worthy & Wachtel — determined the property was worth up to $85 million should the real-estate market return to previous heights.
If the city exercises its option to extend the lease to a full 99 years, the state would yield about $110 million from the deal during the course of the lease.
Under the lease agreement, there is no designation for how this money would be spent. A provision in the recent bill would earmark any future revenues generated by the property be set aside in a special fund for mental health care.
While setting aside such revenue is not something the state is required to do, it does seek to benefit the state’s mentally ill population, which was why the property was bought and the hospital built more than a century and a half ago.
It remains to be seen whether the state is within its rights to seize the land. It would certainly establish a precedent that may give pause to anyone looking to do business with the state – namely, that any contract is subject to termination.