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Column: NC’s biggest slumlord is its state government

by Colin Campbell

If you drive into downtown Raleigh from the north, some of the first buildings you’ll see are boarded-up, dilapidated brick structures on the left side of Dawson Street.

“Downtown Raleigh’s supposed to have a booming real estate market,” you might think to yourself. “Surely a developer would want to build something nice on this block.”

And developers would love to buy the property – known as the “old film library” and “old steam plant” – along with other underutilized sites in the state capital. But the absentee landlord here is North Carolina’s state government, which happens to be one of the state’s worst slumlords.

The two buildings at the gateway to downtown were on the market several years ago, but the Council of State – the group of statewide elected officials chaired by the governor – delayed the sale to a medical office developer back in 2016. That’s the last action I can find on the topic, and the buildings still belong to the state despite being vacant since the 1990s.

Other state-owned properties have been vacant even longer. A former restaurant space on West Morgan Street has been vacant since the 1980s, recently drawing the attention of state Sen. Andy Wells, R-Catawba, who called it a “rundown building/homeless hotel/public restroom.”

“You would think being less than a block from the governor’s office would motivate someone in state government to fix the problem,” Wells wrote in a recent blog post. “But years of complaints, to administrations of both parties, have changed nothing.”

And the problem is hardly limited to the capital city. State government owns real estate in every county, and it’s slow to part with property that’s no longer needed. A former prison in Caswell County closed in 1999 but didn’t go on the market until 2017.

In addition to vacant buildings, there’s also a lot of poorly used space. Some state agencies could fit employees in smaller spaces. Some buildings have entire empty floors. Some agencies could easily be in cheaper digs than downtown Raleigh buildings.

State lawmakers have launched a study on the topic, but it’s pretty clear the state could raise millions of dollars for education and other programs by selling off property it doesn’t need. If state government was a commercial property management firm, it would have gone out of business decades ago.

Part of the problem is that the State Property Office is housed deep inside the governor’s administration. That creates turnover because key leaders are replaced every time a new governor is elected. Most governors have loftier goals than selling off some abandoned buildings.

The exception was former Gov. Pat McCrory, who brought a former mayor’s eye for detail to the state capital complex. His “Project Phoenix” initiative sought to revitalize state government offices by partnering with private developers to convert aging buildings to mixed-use developments with room for offices, stores, restaurants and housing.

But McCrory was only able to secure funding to renovate one building, and Gov. Roy Cooper hasn’t shared his interest in real estate. The building McCrory renovated, now home to the Department of Insurance, still has an empty retail space. It never became the coffee or lunch spot nearby workers had hoped for.

Legislators will get a report on the state property issue later this year, giving them a chance to solve the problem. They could mandate the immediate sale of vacant property, move the responsibilities outside the governor’s administration, or hire a private sector real-estate company to handle the work.

Whatever happens, state leaders can’t continue to let valuable property sit and rot. Every government-owned eyesore is a potential source of much-needed revenue.

Colin Campbell is editor of the Insider State Government News Service. Follow him at NCInsider.com or @RaleighReporter. Write to him at ccampbell@ncinsider.com.

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