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In memo, Berger says Dix deal is undervalued

UPDATED: A day before the vote on the Dix property, Senate leader Phil Berger sent a letter to the Council of State that suggest the state isn't getting enough money under the terms of the lease deal.

Berger, an Eden Republican, asked legislative staff to analyze the deal to lease the Dorothea Dix property to the city of Raleigh for $500,000 a year with annual increases -- worth $68.5 million. 

A memo from Fiscal Research staffers suggests the actual value of the lease is $22.6 million after factoring in inflation. Berger says the state could get more money if it sold the land, but Democratic Gov. Bev Perdue is proposing leasing the land -- not selling it.

 

Pearse Edwards, a Perdue spokesman, refuted Berger's suggestion: "The fact remains the lease will be executed at a good value to taxpayers, and lease payments to the state will increase over the life of the lease," he said in a statement. "This will provide a source of revenue for North Carolina, something the state is not realizing now. And, at the end of the lease the state will still own the land. Governor Perdue’s sound and responsible proposal moves an important piece of the Dix project forward – providing a park to the people and producing revenue for the state."

A state appraisal for the current market conditions valued the property at $58 million; a city appraisal put it closer to $35-40 million. The appraisals, fiscal research staff noted in the memo, also assumed highest valued use of the property, which is much higher than the value of park land.

Perdue's administration openly acknowledges the lease deal is below fair market value, saying it was arrived after negotiations with the city. 

Still, Republicans are concerned the state is giving away a valuable asset and asking the Council of State members to block it. The council is expected to vote Tuesday morning.



Document(s):
Letter to Council of State_12.3.12.pdf
DixCampus_Senator Berger_vFinal_December _2012.pdf


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How short sighted Berger is

If the state sells the land the General Assembly will squander the money on something silly like they did when they sold all the old houses and land in downtown Raleigh.  They can't see past their noses that once the land is sold it is gone and will never be available again.  Unfortunately we have the best legislature that out of state  money can buy.  I just wonder which big money contributor is waiting in the wings to buy the property.

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