How Bad Are Things On Galveston?

[editor]

I just read an article in the Chronicle (http://www.chron.com/disp/story.mpl/metropolitan/6198989.html) that makes the recovery situation sound absolutely dire.

What condition is the island really in right now? Can anyone who lives or works down there provide the rest of us with some insight?

What are the options for Galveston? Can it really rebuild itself? If things are as desperate as they say, I wonder if Houston could annex Galveston. Not in a hostile way (the way many in Kingwood took it), but in a friendly way to help the area get back on its feet.

Thoughts? Pictures?

[crunchtastic]

Why not just approve casino gambling immediately and start issuing bonds? They'll get investors. The idea of annexation is interesting too.

It's probably just too radical a notion, but I can't help think that maybe Galveston shouldn't be a municipality at all--but a true company town geared entirely for tourism and run by developers and privately contracted for all services. Personally I doubt the tax base will come back enough to suport a city and the required government/ infrastructure.

[Mr. Chenevert]

I find your avatar disturbing

I think layoffs are definitely going to be necessary. Its a sad truth. The city just got smaller. They will have to adjust their budget accordingly.

Im not trying to be careless about what happened to the island, but preventing layoffs would be impossible for a major corporation if their sales just got slashed like galveston's tax base did.

[TheNiche]

I just read an article in the Chronicle (http://www.chron.com/disp/story.mpl/metropolitan/6198989.html) that makes the recovery situation sound absolutely dire.

What condition is the island really in right now? Can anyone who lives or works down there provide the rest of us with some insight?

What are the options for Galveston? Can it really rebuild itself? If things are as desperate as they say, I wonder if Houston could annex Galveston. Not in a hostile way (the way many in Kingwood took it), but in a friendly way to help the area get back on its feet.

Thoughts? Pictures?

I was down there on Thursday, Friday and Saturday of last week. Specifically, I stayed on Tiki Island, which is returning to normalcy--even though there is still a buzz of contractors and deisel engines--and even though there are still some homes with absentee owners that haven't been repaired at all. Galveston is in really bad shape. Except for areas just behind the seawall, all of the majestic oak trees are lifeless. Wherever trees are dead, so are businesses. And whereas the island had always been a patchwork of muddled demography, areas that were marginally acceptable to middle class families are starting to look run down. Urban blight is spreading like mold. And whereas Houston's form of urban blight always brought demographic transition, Galveston is just losing population outright with nobody coming in to replace those households that are lost. It is as though a micro-Detroit has sprung up in Houston's own back yard.

Houston won't annex Galveston. Galveston won't let them; also Houston isn't near enough for it to legally do so. The only legally feasible candidates in that fanciful scenario would be Jamaica Beach, Texas City, Hitchcock, and possibly La Marque.

On the one hand, UTMB supported the island's previous size. They contributed vastly to the island's vitality. On the other hand, Galveston had a higher ratio of public housing per capita than just about any small city in the nation for a long time because no city of comparable size had anything like UTMB. UTMB cared for a massive indigent population which migrated there from all over the country, especially the midwest. Now that the public housing has been devastated and most of it is condemned, and now that UTMB is no longer providing free health care, Galveston's poor are greatly reduced in number. In fact, the loss of UTMB will probably lead to the creation and funding of numerous special districts in Texas and beyond tasked with caring for local indigent populations that previously had been sent to Galveston. Although the middle- and upper-class healthcare professionals leave alongside this indigent population, it leaves a vacuum and nature hates a vacuum. It sets the stage for a more specialized tourism-based economy, unfettered by the knife-weilding crazies (such as I have encountered) that used to hold Galveston back.

If Galveston can turn itself around, it is going to take a long time. The market for second homes will have to return and perhaps the Bayport Cruise Terminal would best be mothballed to divert more business to Galveston. Federal assistance will be mandatory; Galveston's tax base has been crippled twice-over, taxes will have to go up, and taxes would have to go up just that much more in order to finance major public improvement projects.

For the time being, there are only two functioning business districts: Seawall and 61st Street. It'll be like that for some time.

[tmariar]

There was also an article on Galveston's recovery in the Houston Press this week.

[marmer]

Excellent post, Niche. Thank you for all that detail.

I've been twice. The first time was over Thanksgiving and my in-laws wanted to "go see." Being sentimental about Galveston, I really didn't want to go. It was really bad but somehow I expected worse.

The last time was New Year's Eve. We went to Moody Gardens and Mario's Seawall Italian Restaurant. Both had lots of people. There were lots of lights on and some of the damage was obscured. You could almost pretend if you stayed near the Seawall that everything was OK. I was glad to see that most of the residential neighborhoods off 61st Street had power and seemed to be occupied.

But, oh, it's heartbreaking. I'll add my voice to the recommendations of John Nova Lomax's excellent recent article in the Houston Press.

[houston-development]

niche pretty much nailed it.

the chronicle had a good article regarding the possibility of legalizing gambling (link). dont know how feasible it would be but at least should be an option to consider.

unfortunately, i believe the city will have to rely on the private sector (moody, fertitta, etc), rather than our government, for support. saw a show recently regarding katrina damage and the paperwork required for goverment aid. it was like a novel and not an easy read for the educationally-challenged (is that pc enough??).

ironic how the nation, especially celebs, were lining up to criticize how NO and surrounding areas were handled, yet not one peep for galveston.

guess the media hates white people, huh? (<- thats a joke, please spare the racist accusations)

[plumber2]

My wife has a business in Galveston. Things are slowly coming back. The corner at 61st. and Stewart Rd. is coming back pretty quick. Most of the businesses are reopenning except for the crappy HEB, Blockbuster & Hollywood videos which are not coming back. Aaron Furniture Rental left the island also, but I would have thought that business would have been great right now.

HEB is telling people a big fat lie about getting 2 ft of water in their store, creating a "total building loss". We are in the same shopping center (same elevation) and had only 5 1/2" inches. I gutted and replaced the sheetrock immediately and had my wife back in business the following week, even though her fixtures are a total loss, we used what we had and openned up for business.

HEB and the others used the hurricane as an excuse to exit the market. They are cowards. I challenge other competitors to come on down and take their place. These Galveston customers are loyal and do not shop eleswhere.

There are some neighborhoods that will not recover. Homes will have to be removed or elevated in certain areas. That is not always a bad idea, but most lower income residents will not be able to afford it. UTMB was a big factor in keeping a middle class population on the island and now that has been diminshed. It will be a challege for sure, but things will come back.

As far as the national media and all the Brad Pitt types.............they can just stay away as far as I'm concerned.

[Fringe]

Excellent idea but to logical for our government.

[TheNiche]

My wife has a business in Galveston. Things are slowly coming back. The corner at 61st. and Stewart Rd. is coming back pretty quick. Most of the businesses are reopenning except for the crappy HEB, Blockbuster & Hollywood videos which are not coming back. Aaron Furniture Rental left the island also, but I would have thought that business would have been great right now.

HEB is telling people a big fat lie about getting 2 ft of water in their store, creating a "total building loss". We are in the same shopping center (same elevation) and had only 5 1/2" inches. I gutted and replaced the sheetrock immediately and had my wife back in business the following week, even though her fixtures are a total loss, we used what we had and openned up for business.

HEB and the others used the hurricane as an excuse to exit the market. They are cowards. I challenge other competitors to come on down and take their place. These Galveston customers are loyal and do not shop eleswhere.

Let's see, now...Galveston grocery stores are geographically isolated such that they receive practically no business from bi-directional traffic that is one the way from one destination to another (such as the HEB at I-45 and 646 does). Galveston's population is a fraction of it's former state. And its employment base has not only been interrupted by a storm, which was bad enough, but then afflicted by the loss of core employment which is what had justified a huge assortment of business and consumer services firms also on the island.

...and you are telling me that a grocer exhibits cowardice by exiting this devastated market after a total loss of its inventory!? Bear in mind, as well, that nothing out of that inventory is salvagable, whether they got 5" of water or 5' of water. It all has to go, and none of their equipment could just be turned on and used again without properly being sanitized. Basically everything of value in that store was rendered useless--or at least that is the case if the store management is the least bit concerned about abiding by health codes.

Grocery stores operate on razor-thin margins. When daytime population (the sum of permanent residents and payroll employment) is cut by a quarter or a third over the course of a few months, there either have to be fewer grocers or some grocers must be willing to lose money. To the extent that too many grocers re-opened, only those with deep pockets could hope not to go bankrupt. HEB might could afford to be there forever, but long-time community landmarks like Arlen's would eventualy just run out of money. Only big businesses would ultimately survive to see profitability (which would strangely seem counter to your personal ethos).

Grocers are not in business to lose money. I suspect that you and your wife--business owners yourselves--can probably sympathize with that basic assertion.

I don't know what your business is, but I'm positive that your margins are better than HEB's just by the nature of their industry. You may not be as exposed to the physical or economic devastation of Galveston (though I would suspect that the loss of an anchor tenant in your shopping center will have a materially impact). Still, if it turned (or turns) out that your business could not (or can not) continue to operate profitably, would you (or do you) still intend to operate it perpetually at a loss? And if not, and you decided to close up shop or move it to a community with better prospects, how would you feel if Galvestonians called its proprietor, your wife, a coward? Would you object? And if so, would you object if I then called you out as a hypocrite?

[foxmulder]

Um...Doesn't HEB have insurance?

[TheNiche]

Um...Doesn't HEB have insurance?

Probably some level of insurance, but they're a big enough company that the loss of a few stores worth of inventory and equipment from any given hurricane isn't going to cause them to become financially distressed; they may insure their whole portfolio of assets with a fairly high deductible so that, for instance, it would take a hurricane destroying several stores at once to even trigger the slightest bit of insured losses. ...or something like that. Insurance policies can be complicated. But that's not something that you or I would know for fact because HEB is not a publicly-traded corporation.

UTMB did have insurance--only not even remotely enough of it.

[bdhobbs1]

A&M Grocery on 39th Street at Avenue M is the only grocery store on the island that took in water, 3 feet and re-opened. Arlan's on 25th took in water and they closed that location and HEB took in some water and closed. Way to go A&M!

[IronTiger]

I'm gonna miss the H-E-B...it's the last HEB Pantry I know of.

[PapillionWyngs]

My wife has a business in Galveston. Things are slowly coming back. The corner at 61st. and Stewart Rd. is coming back pretty quick. Most of the businesses are reopenning except for the crappy HEB, Blockbuster & Hollywood videos which are not coming back. Aaron Furniture Rental left the island also, but I would have thought that business would have been great right now.

HEB is telling people a big fat lie about getting 2 ft of water in their store, creating a "total building loss". We are in the same shopping center (same elevation) and had only 5 1/2" inches. I gutted and replaced the sheetrock immediately and had my wife back in business the following week, even though her fixtures are a total loss, we used what we had and openned up for business.

HEB and the others used the hurricane as an excuse to exit the market. They are cowards. I challenge other competitors to come on down and take their place. These Galveston customers are loyal and do not shop elsewhere.

There are some neighborhoods that will not recover. Homes will have to be removed or elevated in certain areas. That is not always a bad idea, but most lower income residents will not be able to afford it. UTMB was a big factor in keeping a middle class population on the island and now that has been diminshed. It will be a challege for sure, but things will come back.

As far as the national media and all the Brad Pitt types.............they can just stay away as far as I'm concerned.

Being right there on the Seawall and 61st, do you know what happened to Tortuga's restaurant right there off the Seawall? I used to work for the company that owns them.

[plumber2]

Being right there on the Seawall and 61st, do you know what happened to Tortuga's restaurant right there off the Seawall? I used to work for the company that owns them.

Tortuga's oppened up right away. They have been busy.

[20thStDad]

I'm gonna miss the H-E-B...it's the last HEB Pantry I know of.

Pretty sure there's one on W 18th at Ella or E TC Jester. Too small, not enough meat.

[gnu]

I'm gonna miss the H-E-B...it's the last HEB Pantry I know of.

Also, you can drive to Alvin or Baytown to get the Pantry Experience!

[PapillionWyngs]

Tortuga's oppened up right away. They have been busy.

Thanks. That was one of "my restaurants" when I worked for MRI. It was my favorite one.

[sigma]

Let's see, now...Galveston grocery stores are geographically isolated such that they receive practically no business from bi-directional traffic that is one the way from one destination to another (such as the HEB at I-45 and 646 does). Galveston's population is a fraction of it's former state. And its employment base has not only been interrupted by a storm, which was bad enough, but then afflicted by the loss of core employment which is what had justified a huge assortment of business and consumer services firms also on the island.

...and you are telling me that a grocer exhibits cowardice by exiting this devastated market after a total loss of its inventory!? Bear in mind, as well, that nothing out of that inventory is salvagable, whether they got 5" of water or 5' of water. It all has to go, and none of their equipment could just be turned on and used again without properly being sanitized. Basically everything of value in that store was rendered useless--or at least that is the case if the store management is the least bit concerned about abiding by health codes.

Grocery stores operate on razor-thin margins. When daytime population (the sum of permanent residents and payroll employment) is cut by a quarter or a third over the course of a few months, there either have to be fewer grocers or some grocers must be willing to lose money. To the extent that too many grocers re-opened, only those with deep pockets could hope not to go bankrupt. HEB might could afford to be there forever, but long-time community landmarks like Arlen's would eventualy just run out of money. Only big businesses would ultimately survive to see profitability (which would strangely seem counter to your personal ethos).

Grocers are not in business to lose money. I suspect that you and your wife--business owners yourselves--can probably sympathize with that basic assertion.

I don't know what your business is, but I'm positive that your margins are better than HEB's just by the nature of their industry. You may not be as exposed to the physical or economic devastation of Galveston (though I would suspect that the loss of an anchor tenant in your shopping center will have a materially impact). Still, if it turned (or turns) out that your business could not (or can not) continue to operate profitably, would you (or do you) still intend to operate it perpetually at a loss? And if not, and you decided to close up shop or move it to a community with better prospects, how would you feel if Galvestonians called its proprietor, your wife, a coward? Would you object? And if so, would you object if I then called you out as a hypocrite?

I am going to miss that HEB store. It was nice having it down the street when our family stays in Galveston. I was naive to think not that much damage had happen and if it did, rebuild would take no more than 1-2 months. What a ripple effect the hurricane and other external events are having on this wonderful community. I can only image that small-to-medium size business owners with commercial insurance are getting less settlement from the adjusters due to some inverted pos/neg technical insurance provision language that gives the Commercial underwriters a significant hedge at the expense of exposing the "back-bone" of the economy - small-to-medium business owners.

Maybe we should pool about 1,000 Galveston business owners in a CME or NYM weather derivative portfolio managed by a honest, humble, transparent cowboy or cowgirl born, reared and resides in Texas and make windfall profits when disaster hits. Of course, the Bermuda or New Yorker underwriter, taking the other side of the weather derivative hedge, might be asking for TARP IX from the Federal Government to pay the 1,000 Galvestonians business owners within the pool. I am being extreme here.

In the end, we all lose; you have my prays, "oh my dear, Galveston"

[sevfiv]

Also, you can drive to Alvin or Baytown to get the Pantry Experience!

And Bellaire, too (right?)

[Poppahop]

And Bellaire, too (right?)

The Bellaire HEB is something more than a Pantry and something less than a full HEB.

[sevfiv]

Come to think of it, I think the Pantry sign is gone these days...

[Mr. B]

Let's see, now...Galveston grocery stores are geographically isolated such that they receive practically no business from bi-directional traffic that is one the way from one destination to another (such as the HEB at I-45 and 646 does). Galveston's population is a fraction of it's former state. And its employment base has not only been interrupted by a storm, which was bad enough, but then afflicted by the loss of core employment which is what had justified a huge assortment of business and consumer services firms also on the island.

...and you are telling me that a grocer exhibits cowardice by exiting this devastated market after a total loss of its inventory!? Bear in mind, as well, that nothing out of that inventory is salvagable, whether they got 5" of water or 5' of water. It all has to go, and none of their equipment could just be turned on and used again without properly being sanitized. Basically everything of value in that store was rendered useless--or at least that is the case if the store management is the least bit concerned about abiding by health codes.

Grocery stores operate on razor-thin margins. When daytime population (the sum of permanent residents and payroll employment) is cut by a quarter or a third over the course of a few months, there either have to be fewer grocers or some grocers must be willing to lose money. To the extent that too many grocers re-opened, only those with deep pockets could hope not to go bankrupt. HEB might could afford to be there forever, but long-time community landmarks like Arlen's would eventualy just run out of money. Only big businesses would ultimately survive to see profitability (which would strangely seem counter to your personal ethos).

Grocers are not in business to lose money. I suspect that you and your wife--business owners yourselves--can probably sympathize with that basic assertion.

I don't know what your business is, but I'm positive that your margins are better than HEB's just by the nature of their industry. You may not be as exposed to the physical or economic devastation of Galveston (though I would suspect that the loss of an anchor tenant in your shopping center will have a materially impact). Still, if it turned (or turns) out that your business could not (or can not) continue to operate profitably, would you (or do you) still intend to operate it perpetually at a loss? And if not, and you decided to close up shop or move it to a community with better prospects, how would you feel if Galvestonians called its proprietor, your wife, a coward? Would you object? And if so, would you object if I then called you out as a hypocrite?

Kroger is right on the seawall and they opened up very soon after the storm. Many other businesses around HEB opened up right away after the storm. I guess the store was good for some people but my family kind of thought it was a dump. Maybe as HEB felt it just wasn't a profitable idea to reopen such a small mediocre store. The majority of the people I know went to Kroger or Walmart. My wife misses the quilt store and we miss the Diner and Cajun Greek. Saw some work going on in the Diner building last weekend but not sure if same folks are reopening it up.

[Native Montrosian]

As of yesterday on the Strand:

Waited until well after noon for Murphy's Pub to open. Hope they were closed because they had such a good Mardi Gras that no one was awake. Guys working on space next door shrugged and said that the bar's schedule was very erratic - "sometimes they show up, sometimes they don't."

Two flip-flop 'n' soda shops open. Only restaurant was Willie G's. packed out the door at 11 as a cruise ship was docked. Got offered some knockoff watches by a gent in sore need of a bath, and felt nervous walking up Mechanic in broad daylight for the first time in decades thanks to some of the sidewalk denizens making comments.

Big House Antiques open - parrots are fine. Browsed and planned to come back after lunch, (which we never had) but didn't because we were hungry and tired of almost being run over. Since the Strand is mostly deserted, it's now a thoroughfare from Harborside/Broadway. Very few people paying attention to the 4-way stop signs. Got flipped off a couple of times for having the temerity to cross the street, and my husband and I aren't old - we can walk fast. Saw the Emporium open up around noon, but it was just too depressing to stay any longer - parts looked like some of the 1960's photos in Howard Barnstone's book The Galveston That Was. We wondered if a lot of the shops are doing vendor stands during Mardi Gras.

Work continues at Hendley Market, King's Confectionary and the Tremont. Yaga's open on the weekends. Luigi's allegedly "opening soon". Van Heusen's outlet/Bass store gone, as are Midsommer Books and Chico's - just trying to remember specific names & possible landmarks. No idea about Fuddrucker's. Col. Bubbie's still open; just not yesterday - side of the building took a hell of a beating; bricks loose, rust all over the place, etc. Water line for Ike while standing on the elevated sidewalk was over a foot above my husband's head, and he's 6 feet tall.

Maybe businesses near the Seawall are doing better. We'll be back; happy to spend our money and support Galveston when more places are open and things are a bit....safer.

[VicMan]

I would like to see Island Transit extended to League City, La Marque, Hitchcock, Dickinson, and/or League City. I think better public transport and linking the mainland populations to the island will help out Galveston.

Do you guys think League City and/or Texas City will become the commercial center for Galveston County?

I also wish that someday Scholes would get flights to Dallas, but I dunno how economical that would ever turn out to be.

[TheNiche]

I would like to see Island Transit extended to League City, La Marque, Hitchcock, Dickinson, and/or League City. I think better public transport and linking the mainland populations to the island will help out Galveston.

I seriously doubt it. Truly rapid transit to Houston could probably help out downtown Galveston quite a bit, I think, but that's an unrealistic expectation. And if the transit being provided isn't at least as convenient as driving, it's not going to serve a population with enough discretionary income to support island retailers.

Do you guys think League City and/or Texas City will become the commercial center for Galveston County?

Yes, absolutely. The intersection of I-45 and 646 in League City already is as far as I'm concerned.

[sheeats]

Thought y'all might enjoy some of the pictures I took in Galveston last week (before Mardi Gras got started).

[sheeats]

Something else to share:

Five months later, taking stock of Galveston's restaurants post-Ike

[Native Montrosian]

Oooh, a Harborside Olympia Grill....q~~~~~~ I'll look forward to that.

Fisherman's Wharf had a big sign saying "Not open on Mondays" when we went; hence the line out the door at Willie G's. Not fond of Joe's in the first place, so we didn't even look there. Anyone see Yaga's open on the weekend as their sign claimed?, Then again, "open" during Mardi Gras could mean shots on the patio. Have yet to see anything about Waterwall on Strand, darn it. Sometimes, a girl just wants a loaded baked potato with jalepenos al fresco.