JLF Triangle Blog

Economic ignorance on display at Council of State today

Whoa! Did I just hear what I think I heard? Raleigh Mayor Nancy McFarlane was just on New 14 Carolina praising the virtual giveaway of the former Dorothea Dix property by the Council of State to the City of Raleigh for an “urban park.” Only Republican Agriculture Commissioner Steve Troxler and Republican Labor Commissioner Cherie Berry opposed the plan

McFarlane, interviewed on camera after the decision, said it was a good thing to lease the 300 acres for $500,000 per year because “the more business and tax dollars we can generate, everybody benefits.” What business and tax dollars are going to be generated by this lease? There will be no business on this land, and the only tax dollars involved are the taxes already collected by the city before turning those same dollars over to the state for the lease.

Lt. Gov. Walter Dalton and Attorney General Roy Cooper showed a similar lack of business acumen in their comments:

Democratic Lt. Gov. Water Dalton and Democratic Attorney General Roy Cooper noted the state has leased land elsewhere to cities and counties for $1 per year to encourage development.

“It doesn’t have to be at fair-market value. It’s a fair return,” Dalton said. “Raleigh has been the best city in the nation to live, work (and) relocate. This will add to the values all around Raleigh … and any appreciation in the property comes back to the state.”

The property has been appraised at $86 million, but it’s likely that such a choice piece of real estate in an urban area could have brought considerably more than that. And just imagine what tax dollars, real tax dollars, not the phantom dollars imagined by McFarlane, could have been realized if an office park, retail, or combination, had been built there on privately owned land.

Those who claim this decision gouged the people of North Carolina who don’t live in Raleigh are exactly right. I’m sure the people of Murphy, Asheville, Greenville, Fayetteville or Duck will benefit greatly from this decision, made to make liberals like McFarlane, Dalton, Gov. Bev Perdue, Cooper, Raleigh businessman Jim Goodmon, and former Raleigh Mayor Smedes York feel good about themselves.

All the talk about this “urban park” creating a frothy private development and growth mix is as fictitious as the “multiplier effect” that government officials claim for tourism dollars. If they were really interested in ringing the cash registers at the tax office they should have sold this land for a bundle, let someone put some real, meaning private, development and businesses on it, and then taxed the property and the retail sales.

Already the plans and schemes of Perdue have been blown away:

Perdue said she would like the revenue generated from the lease to go to mental health services, but Cooper said the money “would not even begin to dent” the problems North Carolina faces in mental health treatment.

But, hey, her and the Council of State’s intentions were good, right? No matter that the whole plan was a joke.

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