MOREHEAD CITY - The Town of Morehead City is a step closer to its goal of purchasing a central piece of waterfront property and converting it to public use.

The town has been approved to receive $200,000 in grant funding from the N.C. Division of Water Resources for the project.

The grant award is the first of two the town hopes to receive for the purchase of property and associated riparian rights along the downtown waterfront that would lay the groundwork for efforts to turn the site into a public square and water access.

"Getting this grant is really good news for water access for Carteret County and Morehead City," said City Manager Randy Martin.

The town intends to purchase a 0.58 acre site that includes a portion of the "jib" property and the area on the south side that was once occupied by Ottis' Fish Market and Restaurant.

The waterfront area commonly referred to as the "jib" is a triangular area between 7th and 8th streets and between Evans and Shepard streets.

In January, the Morehead City Town Council authorized agreements with the North Carolina Coastal Land Trust to acquire the property from the owner, Carteret Ventures Partnership LLC. Under the agreement, the Coastal Land Trust will hold the property for up to nine months to give the city the opportunity to pursue grants or other funding sources.

Of the $1.3 purchase price, the town has agreed to pay $1.1 million in cash. The remaining $200,000 is in the form of credit that would be applied to future development fees for new construction in town.

The town applied for the Division of Water Resources grant as well as an $850,000 state grant to help cover the cost.

Martin said the town had hoped to know by spring about both grants but it now looks like it will be July or later before they know whether they have received any funding from the second grant application.

"We're really hopeful this other grant will go through as well," he said.

The purchase would allow the town to gain public control over the jib area, which sits at the heart of the Morehead City waterfront.

The $1.3 million being offered for the property is well below the market value, with two independent appraisals coming in above that amount. One of the appraisals exceeded $3 million.