Inside the NC budget’s $250 million plan to transform the downtown government complex

Two new buildings housing state workers from different agencies and other government offices, including the governor’s staff, would be constructed in downtown Raleigh under the budget that North Carolina lawmakers approved Friday.

The spending plan was sent to Gov. Roy Cooper after passing both the House and Senate by veto-proof majorities. It allocates more than $250 million for a “state government executive headquarters” building housing the workers, and an “education complex” that would provide offices for the UNC and Community College systems, as well as the departments of Commerce and Public Instruction.

At the same time, the budget would require the demolition of two longstanding government buildings near the General Assembly: the Administration Building at 116 W. Jones St. and the Bath Building at 306 N. Wilmington St.

“Some of the buildings are just to the point where they need substantial investment to upfit them,” said Rep. Donny Lambeth, a Forsyth County Republican who is also one of the senior chairs of the House Appropriations Committee.

Lambeth said discussions about renovating aging government buildings with leaky ceilings and inadequate space have been going on for years. He said the impetus for building a new education complex to house multiple government offices and agencies was the push during last year’s budget negotiations to move the UNC System’s headquarters from Chapel Hill to Raleigh.

“At some point, you’re going to have to either invest in that or lay out a more efficient plan,” Lambeth said.

Asked about the plans for a new building housing the governor’s staff, Mary Scott Winstead, a spokeswoman for Cooper, said the governor’s office “did not request the provision for more office space,” and said Cooper was continuing to review the full budget.

New office space for governor’s staff

If enacted, the budget would appropriate $88 million for the Department of Administration, working with the Legislative Services Office, to plan and construct the new facility.

The building would also include a chamber for the Council of State, which is made up of state’s top executive-branch officials, to hold its meetings.

Lambeth said an exact location for the new facility hasn’t been determined. However, the budget does require the use of “all or portions” of four different parcels of land at North Wilmington and East Edenton streets.

Once plans are finalized, construction will need to begin by July 1, 2023, at the latest.

Constructing a downtown education complex

A far bigger chunk of the allocated funds — just over $168 million — is reserved for officials to plan and construct the new downtown education complex.

The budget allocates $3.5 million to the Department of Administration to be used on moving expenses as it relocates all of its personnel and operations out of the Administration Building. The building will need to be emptied by July 1, 2023, and demolished by Oct. 31, 2023.

The spending plan also states that the General Assembly “shall initiate and have final authority over any activity related to the planning and construction” of the complex.

Officials would also receive $15 million to renovate the building currently being used by the Department of Public Instruction, at 301 N. Wilmington St.

Other changes to government buildings

The budget also makes the following allocations:

▪ $7 million to demolish the Bath Building.

▪ $5 million to renovate the Old Revenue Building.

▪ $1.5 million to relocate the Office of the State Auditor’s staff from the Old Revenue Building to the Albemarle Building.

DMV and old Rex Hospital buildings to be sold

The budget also instructs the Department of Administration to sell the longtime headquarters of the N.C. Division of Motor Vehicles at 1100 New Bern Ave., as well as the building at 700 Wade Ave. that was formerly used by Rex Hospital.

The DMV began to move its main offices to Rocky Mount in 2020, after state officials advised that asbestos and fire safety problems at the site in Southeast Raleigh were too large to fix, The News & Observer previously reported. With the future of the building uncertain, residents and local officials were hoping to see a developer come in and repair the building, or tear it down and construct something new.

Officials are instructed to sell the buildings for fair market value, while the money recouped from the sales would go back into the Downtown Government Complex Reserve.

For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at https://campsite.bio/underthedome or wherever you get your podcasts.