Galveston Waking Up

[YakuzaIce]

GOING COASTAL

Galveston waking up to influx of new homes, investment

By NANCY SARNOFF

Copyright 2004 Houston Chronicle

When Susan and Jimmy Fox bought a Galveston beach house in 2002, they figured it would be a convenient weekend getaway from their busy lives in Houston.

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Two years later, they have sold their house on the shore and are putting the finishing touches on their newest island acquisition: A 112-year-old home near the town's historic district.

"We started off as weekenders," said Susan Fox, who now spends about half of her time in Galveston, which is about an hour's drive from downtown Houston.

The Foxes are part of a recent movement of out-of-towners investing in homes near the shore and helping to fuel a boom in the long-sleepy island city.

A budding revitalization can be seen in a smattering of trendy coffee shops, restaurants and renovated loft apartments that have opened in the formerly neglected downtown.

Galveston recently got its first stand-alone Starbucks near a new cruise ship terminal, where ships sail to vacation spots like Cozumel and the Cayman Islands.

But in the historic residential neighborhoods straddling Broadway, the town's main east-west thoroughfare, new signs of life are everywhere as buyers from Houston and beyond are bargaining for fixer-uppers or previously renovated homes for second or primary homes.

"We're selling so much more," said David Bowers, a real estate broker with the House Co. in Galveston.

George Mitchell, the energy and real estate magnate who pioneered the redevelopment of much of Galveston's downtown Strand area, said folks are finally starting to take notice of the island's architecture.

"It has the best aggregate of Victorian structures in the Southwest," he said.

Fox and her husband grew to appreciate this aspect of the island.

"People don't realize how wealthy this place was in the 1800s," said Fox.

While historic Galveston is getting much of the attention, there's another sort of real estate boom taking place along the beachfront itself.

Developers are planning or have started at least a dozen residential projects along the island's beach and bay.

"There's a huge bubble of baby boomers getting to retirement age wanting to move to coastal communities," said Richard Anderson of Falcon Group, a real estate developer.

There's also a growing appreciation for beachside communities.

"On a national level, people are looking for places like this," said Marsh Davis, executive director of the Galveston Historical Foundation. "Just being near the Gulf or near any large body of water has a tremendous appeal. And those places are fewer and farther between."

The National Association of Realtors predicts a huge market for vacation homes as the baby boom generation matures. In 2003, sales of second homes hit a record nationally, with some 445,000 properties sold, up from 288,000 in 1989, according to the association.

"People planning retirement down the line, in the next 10, 15 years, are saying, 'Let's get our Galveston house in order,' " Bowers said.

And few coastal cities have the reasonably priced inventory of homes that Galveston does, Marsh said.

"There aren't many cities that are tourist destinations like Galveston that have a strong emphasis on historic districts where someone of moderate income can buy a property," he said. "You can still do that in Galveston."

The best deals, of course, can be found in fixer-uppers.

Bowers said it's the renovated homes that are leading the market in price, selling anywhere from $100 to $120 per square foot.

"Those houses not yet fixed up are selling, but they're selling substantially less per square foot to accommodate that restoration factor," he said.

The moderate prices, however, are not expected to last.

Residents and real estate agents said Galveston homes priced below $200,000 often don't last 24 hours on the market.

Bowers said he sold one particular home in the historic area six times throughout the 1990s.

During those 10 years, the home went from $35,000 to $125,000.

Just last year, he sold the home again. This time it went for $199,000.

Condo towers coming

To cash in on the demand, Anderson said Falcon Group will break ground this year on a pair of luxury condominium towers.

The project, dubbed Palisade Palms, will be on Galveston's East Beach, an area that developers have long overlooked.

Anderson calls the project "club class," meaning it will have high-end interior details and services rivaling the nicest resorts.

As of earlier this month, 147 potential buyers had put down $10,000 apiece to reserve units. Those reservations are now being converted into sales contracts.

Units left have price tags ranging from $310,000 to more than $1 million.

The Falcon Group has never built a project like this before. The developer said the towers, designed to withstand a hurricane's winds, will be built by the top professionals in their fields.

"It's something more indicative of what you'd see in Florida," Anderson said.

New developments along the Seawall are also contributing to the city's renaissance.

Houston loft developer Randall Davis plans to build a high-rise condominium building where Broadway meets the Seawall.

His project, Emerald by the Sea, will be built near a new shopping center that has lined up such national tenants as Carlos 'n Charlie's, Wolfgang Puck Express and Cold Stone Creamery.

Landry's Restaurants and Fertitta Hospitality, the Houston-based companies that control much of the real estate on the Seawall between 51st and 57th streets, have also been in a growth mode.

Fertitta Hospitality recently added 90 guest rooms to its Hilton on the Seawall. And Landry's is acquiring the Flagship Hotel, which sits on a pier over the Gulf of Mexico.

The purchase, which has been tied up in bankruptcy litigation, is expected to produce a luxury hotel and beach-flavored amusements.

Tilman Fertitta, who controls both companies, said he plans to add 40 more condominium units to his San Luis resort complex.

Units will be priced from $300,000 to $1 million.

Still in the planning phase, the new units will fill a "need for higher-end condos that have the services of a high-end hotel," Fertitta said.

West end getting busy

While activity on the east end of Galveston's 32-mile coastline is just picking up, the west end of the island is filling with beach and bay houses that go on for miles.

But there's still vacant land left.

If a new batch of developers has their way, the number of beach dwellings on the west end could explode over the next several years.

Pointe West is the biggest new development planned for the west end.

Centex Destination Properties, a division of Centex Homes, has started moving dirt and sand for a 950-acre residential community that will cater to families and second-home buyers.

Karoline Vogt, project manager for Pointe West, said all the custom home lots and villas in the project's first phase have sold out.

At least six other developers have more housing projects planned for the west end, where the potential building boom has touched off a lively discussion among city officials.

While many of the proposed projects have received building permits from the city of Galveston, others are waiting because of their potential effects on the environment.

Jackie Cole, a city councilwoman whose district includes the west end, is concerned about the wetlands, animal habitat and green space. Cole hopes development will not compromise the natural setting.

"If people are used to the wide open spaces and the natural habitat, it can be disappointing," Cole said. "But as most things in life, it's a trade-off."

And because property rights are so strong in Texas, she said, the city might not have much control over what is developed.

"Hopefully the rules will be enough to maintain some of our natural habitat that has become such a draw for Galveston," Cole said.

[Trae]

Old I know, but will this happen:

[TAK]

Landry's Pier.... sounds about right...

[J.A.S.O.N.]

Here is a link to a story about the Flagship Hotel a couple of days ago...

Landry's - Flagship 2009

[musicman]

By KEVIN MORAN

Copyright 2006 Houston Chronicle

GALVESTON