Galveston to Test the Waters for
Development of East End Flats

Houston Business Journal, April 20, 2007,
by Allison Wollam & Greg Barr

The Galveston Island Redevelopment Authority is seeking information from developers interested in acquiring the island's last large continuous tract of land available for development and converting it into a $100 million asset.
The 600-acre East End Flats, located at the far east end of the island north of Seawall Boulevard and east of Ferry Road, is a former government installation that formed part of the coastal defense network from the turn of the century until the end of World War II.

Well-known developer and oilman George Mitchell at one time considered developing the East End Flats to include a marina and a large residential subdivision, but later backed away due to high infrastructure costs, according to longtime Galveston Realtor Gary Greene of Prudential Gary Greene Realtors.
The site is currently being used by the U.S. Army Corps of Engineers to deposit dredge material from the adjacent ship channel.

The City of Galveston, The University of Texas Medical Branch and the Galveston Economic Development Partnership formed a consortium about three years ago to study future development possibilities for the land.

The path toward development was paved in 1999 when U.S. Sen. Kay Bailey Hutchison, R-Texas, added a provision to a water resources bill to allow the City of Galveston to purchase all, or a portion of the land from the Corps of Engineers.
Now, Jeff Sjostrom, president of the Galveston Economic Development Partnership, says it's time to get the project off the ground.

"At this time, Galveston has more than $2.4 billion in new development nearing completion from the West End to East Beach, with more projects coming on line," he says. "We feel like it's now timely to test the market of the private sector and partner with a master developer in the long-term redevelopment of one of the island's most attractive properties."

Galveston's redevelopment authority will select a potential master developer who will be given the opportunity to enter into an exclusive negotiating agreement with the city for the right to acquire and develop all, or a portion, of the East End Flats.
The master developer will work with the consortium to secure the release and acquisition of the East End Flats from the U.S. Army Corps of Engineers, perform the appropriate environmental and feasibility studies and participate in securing any federal legislation necessary to complete the land transaction.

According to the request for information, the city's objective for the project is to increase the tax base, spur economic development and tourism, revitalize the surrounding area and attract jobs and residents to Galveston.
The entire project is projected to be in the $100 million range. Based on this assumption, the City of Galveston can assume to gain $549,000 in annual property tax revenue. Prorated over the next 20 years, the total collectible city property tax would be $11 million, according to the request for information.
Preliminary plans call for 93 acres to be developed in Phase I, with 40 acres being used for a Continuum of Care Retirement Community; 26 acres for the development of research, office, or other commercial properties that are consistent with retirement communities; 16 acres for middle-income housing; and 11 acres for public infrastructure.
Greene says it would make sense for the developer to include a marina and a mid- or high-rise residential tower as part of the project.

"It would be the most successful marina in the country because so many people from Clear Lake have to drive their offshore boats an hour to get to Galveston," he says. "And, the views of the Ship Channel and the ocean would be wonderful."
The Galveston redevelopment authority is accepting applications until June 29, and Sjostrom estimates that construction should start in three to five years. The entire project is expected to take 15 to 20 years to complete.