City buys house, moves it, rehabs it, and is now selling it through a sealed bid process.
New Bern’s Redevelopment Commission directed staff to solicit sealed bids for 911 Eubanks St. in New Bern, NC on Feb. 12, 2025.
The three-bedroom, one-bathroom house was located at 602 Gaston Boulevard before the New Bern Board of Aldermen decided to purchase the property, along with five other properties for $595,000 on 3.45 acres in April 2020. They planned to relocate the house and two other structures, the Black Swan and Ghent Sandwich Shop, to make way for the new Stanley A. White Recreation Center.
Despite public opposition, the Board of Aldermen moved forward with plans to build the new recreation center off Third Avenue instead of Chapman Street, which was the original location. The contract was awarded as reported here and the facility opened in January 2025.
During the June 2020 Redevelopment Commission meeting, then Alderman Sabrina Bengel, asked Development Services Director Jeff Ruggieri if Community Development Block Grant funds could be used to move houses.
Jeff Ruggieri said he wasn’t sure about moving houses.
Sabrina Bengel said, “I have a house you can move; I have funds to move it; and I have a place to move it to. The city has a house. You know the house I’m talking about — it’s on Broad Street.” She was talking about the former Black Swan House.
As an entitlement city, New Bern receives funds from the US Department of Housing and Urban Development Community Development Block Grant program.
Ruggieri said he hadn’t heard that CDBG funds could be used to move houses. He said the funds had to help low to moderate income individuals.
A year later, the Board of Aldermen offered the Black Swan House to the public for free as long as the buyer moved it to Rhem Avenue, as reported here. It was relocated and remains under construction.
Members of the Redevelopment Commission are appointed by the New Bern’s Board of Aldermen. The commission is part of the city, and it does not have its own Employment Identification Number.
In 2020, the commission met with the Board of Aldermen in October 2020.
They talked about building housing and renting units to generate cash flow and then concentrating on homeownership.
Commissioner Kip Peregoy said the redevelopment plan needed to generate a return on the money that they’re investing in rehabilitation and new housing so they can continue putting money into new projects.
“That’s the only way this works, otherwise we’re coming to you for money all the time and I don’t think you are going to enjoy seeing us that often,” he said.
Then Mayor Dana Outlaw asked if the city could convey CBDG funds to the commission.
Jeff Ruggieri said the properties must be owner-occupied and there are income limits. He said the commission was focusing on properties that were considered low-hanging fruit that weren’t in the floodplain that were owned by someone willing to sell and in relatively good shape. He said the goal was to rehabilitate the properties to a higher standard of livability and energy efficiency and then rent them to establish an income stream for the RDC.
In February 2021, the director of Development Services told the Redevelopment Commission that the city manager asked him if they would be willing to accept the house at 602 Gaston Boulevard and move it off the property. He said the cost of moving it would come from the commission’s money. He said they would have to look into it, but he thought that Community Development Block Grant funds may be used to rehabilitate the house after it was moved.
Commissioners Beth Walker, Steve Strickland and Kip Peregoy of the RDC’s Housing Work Group, spent the next couple of months obtaining estimates on the costs of moving the house to 911 Eubanks St. in the Greater Five Points redevelopment overlay district and rehabilitating it.
In May 2021, Sabrina Bengel told Foster Hughes, the new interim city manager, to put an item on the next meeting’s agenda to talk about the house at 602 Gaston Boulevard. She directed Jeff Ruggieri to get a formal letter from the Redevelopment Commission requesting the house and saying that the commission was going to move it.
Ruggieri said, “Ok, I was under the impression that it was.”
Bengel said, “it’s just a technical thing.”
City Attorney M. Scott Davis told the Board of Aldermen that the Redevelopment Commission has expressed interest in relocating the house at 602 Gaston Boulevard for a public purpose” on June 8.
Ruggieri told the Redevelopment Commission on June 9 that he and the RDC Housing Group estimated that the move and rehabilitation to cost about $115,000. He said the city attorney asked that the commission to formally request ownership, and the Board of Aldermen would formally donate the house to the RDC. The commission requested ownership of the structure.
In June 2021, Foster Hughes presented a resolution to the BOA to donate the structure at 602 Gaston Blvd. to the RDC. The resolution required the city clerk to post a notice regarding the board’s plan to donate the structure.
Alderman Johnnie Ray Kinsey said, “So, that means that an individual just comes and picks the building up and pays a dollar and they are on their way.”
The city manager said, “Well, they would have to go through the process.”
“This particular building is going to the Redevelopment Commission, and they are going to move it and to Eubanks Street,” Bengel said.
Johnnie Ray Kinsey said, “Which one is it.”
Alderman Bengel said, “It’s the little brick house that’s behind…”
Kinsey said, “Oh yeah, that.”
“So, they will rehab that house and be able to use that to house people who are in need of housing,” Bengel said.
The Board of Aldermen approved a motion to donate the house to the Redevelopment Commission on July 13, 2021.
Ruggieri told the RDC in December 2021, “In order to make it cleaner for us to receive HUD (CDBG) funds the Redevelopment Commission should be called what’s called a sub-recipient.”
He said, “We do it with every organization outside the city that receives funds – RCS, Salvation Army and Habitat (for Humanity). All of the entities that receive any type of funding from the CDBG program have to go through a subrecipient process. Now cities aren’t required to do that, and the project was already approved from HUD, so they were okay with it, but just to make everything just bulletproof, the Redevelopment Commission should be a subrecipient underneath the program like everybody else outside of the city. So, you’ll need a motion to authorize the chair to sign the sub-recipient agreement so we can receive the HUD funds that they’ve already allocated to us.”
Commission Steve Strickland asked, “Are there any kind of specifications that have to be met for that because, you mentioned that we’re outside of the city but then, we’re not technically our own organization, so I just want to make sure we don’t see any threading the needles on that.”
Ruggieri said everything was already filled out.
In November 2022, Beth Walker reported that the house was set at Eubanks Street and ready to be rehabilitated.
Commissioner Julius Parham asked if it was going to be a sale or a rental.
Kip Peregoy said it was going to be a rental.
Julius Parham asked, “Who’s going to manage it?”
Walker said, “Hmm.”
“Good question,” Peregoy said.
“We’ll discuss that at a work session,” Parham said.
In February 2023, Assistant City Attorney Jaimee Mosely told the commission that they could not rent structures in the redevelopment area on a long-term basis, but they could lease for a short term.
The next month, she told the Redevelopment Commission that their “powers are not unlimited.”
She said they can temporarily lease or rent property in connection with an ongoing redevelopment project. She said she consulted with the School of Government and noted there wasn’t case law, but they concluded that there may be times when a structure may be rehabilitated and a person might be displaced and if the RDC owned housing stock, they could rent the property to someone that’s displaced.
In July 2023, the Redevelopment Commission approved the transfer of 911 Eubanks Street to Habitat for Humanity of Craven County and the Board of Aldermen subsequently approved the donation as reported here but the transfer didn’t happen.
In March 2024, RDC Executive Director Zeb Hough said, “The important thing, when it comes to CDBG funds is that we meet the national objective in a way that is both fair to the consumer and accurate to the procedures that Community Development Block Granting actually requires.”
In September 2024, Zeb Hough said the Redevelopment Commission originally attempted to do transitional housing while they did rehab work and that didn’t “fit the bill.”
Walker said the federal funding grant aspect “might control the whole process instead of what we thought we were going to do.”
Hough said the project cost somewhere in the neighborhood of $239,000.
Walker said because it’s federal CDGB funds, “we’re not going to see any of the money, no matter what we sell it for.”
Commissioner Tabari Wallace said he knew an individual who wanted to purchase the property and said, “I want to ask the chair, could we consider adopting a resolution for authorized sealed bid sale.”
Attorney Mosely said there were income requirements, and they are waiting to hear from the CDBG consultant on how they can move forward.
In February 2025, Zeb Hough said normally, the commission sets a minimum bid at 75% of the tax value, which is $101,500. In this case, the buyer needs to be a low to moderate buyer because Community Development Block Grant funds were used to move and rehabilitate the house.
He said the buyer can’t bid higher than 30% of their annual income.
The second mortgage is determined by the difference between the appraised value, which is $137,000 and the bid.
He said purchasers must be low to moderate income as defined by the US Department of Housing and Urban Development.
He told NewBernNow.com that HUD calculates the Area Median Income using the Census Bureau’s American Community Survey data. The calculations are listed here.
D’Aja Fulmore, the CBDG coordinator, said the purchase price will be determined by the amount that the buyer’s total household income is able to afford.
She said the subrecipient (RDC) will record a second mortgage by placing a lien on the property. The lien will be forgiven at a rate of 5% per year for 20 years.
She said the purchase price will be determined by the amount that the buyer’s total household income is able to afford.
She said the buyer needed to deposit 5% of the bid amount.
D’Aja Fulmore said it will be monitored on a semi-annual basis.
NewBernNow.com asked, “If someone purchases the property and both mortgages are paid off, are they still required to live in the house for 20 years?”
“Once the homeowner has paid the subsidized mortgage and the CDBG lien, they are free to do as they wish with their property,” Zeb Hough said.
The three-bedroom, one-bathroom house at 911 Eubanks Street in New Bern is appraised at $137,000. The deadline to submit a sealed bid is March 17 at 5 p.m. The Redevelopment Commission will consider awarding the bid during the April 9 meeting at City Hall.
The Redevelopment Commission spent $224,052 of Community Development Block Grants on asbestos and lead inspection, moving equipment rental, foundation replacement and rehabilitation, according to a financial document. The commission used $22,254 of RDC monies on foundation replacement and rehabilitation, site grading, building permit and dig and pour footings. The total project cost was $246,306 excluding the purchase price of the 602 Gaston Blvd. property.
More information about the property and sealed bid process can be found here.
By Wendy Card, Editor. Send an email with questions or comments.