Raleigh readies demolition, utilities and funding plan as DHHS prepares to leave Dix Park

Raleigh parks officials and the Dix Park Conservancy told the City Council at a work session that the state Department of Health and Human Services will leave the Dix Park campus in November 2025, leaving the city responsible for roughly 1,000,000 square feet of buildings, about 300 acres of grounds and related infrastructure.

The departure forces the city to accelerate demolition, decommission a centralized boiler-and-chiller plant, plan a new campus utility corridor and identify funding sources for an estimated $90 million to $120 million in capital work and $7 million to $10 million in ongoing operating costs over the next several years.

Why it matters: the state’s exit moves responsibility for a large, mixed set of buildings and systems from one owner to another and creates immediate maintenance, environmental and financial obligations. City staff said the scale of demolition and utility replacement will shape near-term budgets and governance of the park.

Steven Bentley, director of Raleigh Parks, told the council that the city is “in a citywide organizational mode to respond to this.” Bentley said the campus contains about 1,000,000 square feet of buildings (a figure comparable to the city’s entire park system by his count), and that the city and conservancy have renovated about 25,000 square feet across six structures and previously demolished 25 buildings totaling roughly 50,000 square feet. He said staff plan to demolish an additional 500,000 square feet and stabilize another 500,000 square feet of building area as part of the transition.

Bentley described initial operational steps: permitting demolition of the West Campus beginning in early 2026 (with the Flowers Cottage retained for renovation), decommissioning the centralized steam-and-chiller plant (DHHS estimated about $7,000,000 to operate the plant annually), draining and sealing vacated buildings to reduce mold risk, and removing interior materials as part of stabilization.

Bentley and the Conservancy also described infrastructure planning. City staff have initiated a master utility corridor design — roughly 6,000 linear feet from Lake Wheeler Road to Blair Drive — intended to consolidate new water, sewer and stormwater services and to enable future adaptive reuse of campus buildings. Raleigh Water is advancing a separate Pullen-to-Bain water-main project that staff described as a critical redundancy for the city’s western water supply.

The council heard details on programs and capital projects already underway or planned: the Gibson Play Plaza (a major summer attraction), a planned Rocky Branch Creek and Grove restoration with boardwalks and stormwater features (design funded, construction potentially ready by early 2027 depending on funding), the Lake Wheeler Road roundabout project (contract previously awarded), Flowers Cottage renovation into a food-and-beverage venue (permitting now; construction likely after New Year), and an adaptive-reuse study for the Brown Building (longer-term, significant mechanical and plumbing work expected).

Ruffin Hall, president and CEO of the Dix Park Conservancy, emphasized partnership and private fundraising: “This park is going to be successful in large part due to the partnership and the relationship,” he said. The Conservancy reported completing a $75,000,000 fundraising campaign and more than 850 members to date, and it outlined near-term public-programming and public-art work including a mural by Jackie Shelton Green and an October installation of Thomas Dambo’s reclaimed-wood sculptures.

Funding and governance: staff presented a multi-source financing approach and asked the council to consider multiple tools — municipal service districts (MSDs) for targeted services, tax-increment grants (TIGs), contributed philanthropy, earned income (concessions and rentals), value-capture leases and partnerships. Bentley said staff would return this fall with proposals on MSD boundaries and rates and would bring an updated memorandum of agreement (MOA) and a feasibility study describing funding and governance options.

On governance, Bentley said the current MOA between the city and the Dix Park Conservancy is advised by the Dix Park Leadership Committee, chaired by the mayor with a vice chair from the Conservancy and other institutional members. Staff said they will propose an updated governance structure that clarifies the roles and decision points for long-term building reuse, operations and funding.

Council discussion and next steps: council members asked about tree removal and replanting plans (staff said a citywide tree "leaf-out" plan is in development and that specific easement constraints limit replanting on sewer corridors), the potential to use leases for revenue generation (Bentley said the city will own the property once the state vacates more than half the site and that local leasing options will be one of several financing tools), and how the city will sequence decisions about master-plan updates and capital priorities. Bentley said staff will provide a schedule and decision milestones and that an economic impact study has been commissioned to measure results from the 2019 master plan through the present.

Discussion-only items included questions about short-term park signage and arrival treatments near Lake Wheeler and South Saunders, and whether reclaimed wood for a public-art project could come from trees removed for the Pullen-to-Bain corridor (staff said reclaimed materials are being sourced by partner organizations and did not believe the pine corridor wood was being used for the sculptures; they said they would verify).

Staff direction and deliverables noted in the session: staff will return this fall with MSD boundary and rate proposals, an updated MOA and feasibility findings from the real-estate advisory work; they will provide a schedule for when master-plan updates and the leaf-out plan will reach council; and staff said demolition permitting and utility design will continue as part of 2026 sequencing.

The work session closed with staff offering to provide councilors additional briefings and to return with a calendar of decision points and funding options for council consideration.