North Carolina failing to keep track of unused property

RALEIGH, N.C. (WNCN) – With more than 12,000 buildings and a million acres of land, North Carolina has no shortage of space.

Overall, it’s worth nearly $26 billion.

But CBS North Carolina Investigates found the department in charge of managing that property hasn’t been keeping track of potential waste.

“We do know and have seen evidence that there are properties that are in fact not being utilized as they should and may be good for sales,” explained Sen. Rick Gunn (R-Alamance). “This is good time for us to dig in and make sure we have something in place that shows we are good stewards of properties for the state of North Carolina.”

It’s been an on-going battle forGunn and other lawmakers.

For years the state has been trying to get a grasp on its unused and underutilized property.

“If I spent time around here going around and trying to figure out why, it would take more time than: let’s get if fixed,” said Gunn.

It’s a responsibility that falls on the Department of Administration.

CBS North Carolina Investigates asked for a list of potential surplus property, but it turns out the department doesn’t have one.

In fact, they couldn’t say what some of our state buildings were even being used for.

“What we cannot do and will not do is stand still and accept the status quo and accept things the way we found them,” said Machell Sanders, secretary of the Department of Administration.

She was just appointed by Gov. Roy Cooper to run the department.

CBS North Carolina Investigates tried to several times to interview the previous secretary under Gov. Pat McCrory, but they would not comply.

“Clearly there were some concerns and observations noted during the previous administration,” Sanders said. “So what I have before me now is an opportunity to improve and deliver on that.”

What CBS North Carolina Investigates found is the state does not have a centralized database that tracks what buildings are being used for and that can identify potentially surplus property.

“Did it surprise you that is something the state didn’t keep track of? Being it’s one of the largest assets we have?” reporter Jonathan Rodriguez asked Sanders.

“Yes, it does surprise me but what that also does is gives me an opportunity to improve things and make them better for the taxpayer,” she said.

There are dozens of property that have been identified by various studies as surplus.

Properties like the old Animal Disease Lab in Duplin County that has sat empty for more than 7 years.

If sold it could bring in $500,000.

There are also a number of dilapidated homes in downtown Raleigh sitting empty, unused, and costing taxpayers money.

McCrory initiated “Project Phoenix,” an effort to sell off many of those homes but those sales have been halted.

“It’s not that we’re just out there trying to find out what we can sell, it’s a comprehensive best practices management of your state portfolio,” explained Gunn.

Another example is the old REX Hospital that is now part of the state Employment Security Department.

A state study found it has more than 26,000-square feet of space not being used.

It’s a mismanagement problem the state has been called out on for years.

Here’s a timeline of what we found.

  • 2003 – Lawmakers told the DoA to create a system to track and sell the state’s surplus property. That didn’t happen. They even brought in a consulting firm who offered to develop a system for them but it was never funded.
  • 2011- Lawmakers again told the DoA to track underused property and again it wasn’t done. The Department did identify 26 surplus properties but only put three up for sale.
  • 2013 – The General Assembly tried to figure it out themselves, commissioning a subcommittee that identified 52 properties with wasted space. You can read their report here (2013 report)This time they drafted a bill that once again told the DOA to track surplus property. Again, it never happened.
  • 2015 – Another General Assembly subcommittee again called out the DoA for failing to track this issue. The subcommittee named 17 more properties the state could sell that would bring in 14.3 million. (real property report)
  • 2017 – Lawmakers passed Senate Bill 747 making it state law for the DoA to start identifying and tracking potential surplus property. The law also requires them to have a 5-year plan to better manage all property. A firm was brought in to evaluate how the state can better utilize the space it has. You can read their first report here.

“The mentality has been well once state government has it then it ought to remain in state government,” Gunn explained. “I would argue that in today’s economy with changing demographics, infrastructure changing, there’s going to be opportunities for us to move property or consolidate property and better the state.”

For now, you won’t see any of these buildings for sale.

“I made a decision to take a pause on those actions and the reason for it is we need to make thoughtful, data driven informed decisions,” Sanders said.

The secretary said she wants to first figure out what the state has, and what each property is worth. She hopes to have that database finished by then end of the year.

“We sort of feel like we’re starting from scratch as it relates to how we feel like it should be done,” said Gunn.

“State property decisions, process, and systems will be better,” Sanders said.

Something both agree is several years and several millions of dollars overdue.

Since CBS North Carolina Investigates’ inquires, the state has started a surplus property map.

You can view that here.

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