Developer Takes On New, Old Island Fights

Galveston County Daily News, September 16, 2007,
by Laura Elder

GALVESTON — Omri Shafran and his investment group for months have been buying everything from aging East End apartments to shabby Seawall hotels with plans to transform them into luxury residential projects.

In a city where developers since January have either built, begun or announced plans to build 4,246 condominium units, the former Tel Aviv resident’s projects hardly turned a head.

But when word spread that Shafran, 31, and business partner Avi Rozenman, both principals of Houstate Investments, planned to build a 12-story condominium project, a hotel and 20 single-family townhomes on a parcel between 41st and 45th streets, that changed.

The developers want to build the 280-unit condominium high-rise project, The Presidio, on the 6.4-acre site of former Fort Crockett housing for U.S. Coast Guard officers, which is partly on Seawall Boulevard.

And with those plans, they’ve wandered into two of the biggest beehives on Galveston Island — high-rise development and historic preservation.

Fort Crockett Remnants

The U.S. Coast Guard housing is one of the few remnants of a massive military installation dating back to a time when coastal gun emplacements were important to national security.

Houstate’s plan calls for the demolition of six of U.S. Coast Guard housing duplexes built between 1918 and 1939, while preserving three on the west side of the project behind Hometown Bank.

In the 1990s, the federal government declared the property surplus. A controversy ensued when the Fort Crockett site was offered to the Children’s Center, a family crisis group.

City officials weren’t pleased that prime beachfront property would go to a tax-exempt organization and worked with the nonprofit to find another building.

Historical Oversight

At the time, the Galveston Historical Foundation, charged with preserving island property, said an appropriate use of the land and structures might be residential housing with a monument to Fort Crockett history.

In 1999, a private group took ownership of the property. The buildings have been vacant for years.

Neither city officials nor the Galveston Historical Foundation have the authority to protect the historic structures, which developers said would be costly to restore. That responsibility, according to deed covenants, falls to the Texas Historical Commission.

Earlier this year, Houstate, which has the property under contract, approached the commission with its proposal, which called for demolishing eight buildings and preserving one as a museum.

The state agency said a larger percentage of buildings needed to be preserved, said Debbi Head, a commission spokeswoman.

As a representation of 20th century military installation, the property has important historical significance, she said.

“This is indicative of a district that is rapidly disappearing,” she said. “Once its gone, it’s gone forever.”

‘My Idea’

Shafran, whose company plans to invest about $250 million on the island, said he now is offering to preserve the three older buildings and even create a Coast Guard museum in one.

Few other developers would bother to sacrifice profits for such an expensive undertaking, he said.

“I understand the concerns and know the importance of preserving historic buildings,” Shafran said. “It was my idea to create the Coast Guard museum.”

The commission is awaiting new proposals from Houstate Investments, but wants the developer to find a compromise with city officials and neighbors of the project, Head said.

As a group, the buildings are eligible to be listed as a district in the National Register of Historic Places. But to make such an application, the commission must have the permission of the property’s owner.

Height Fight

In the meantime, Houstate Investments must contend with another island issue — height restrictions.

For nearly a year, city officials have been mulling how and where to restrict high-rises.

In October last year, the city passed what was supposed to be an interim measure restricting the heights of buildings until it approves new zoning. Under the measure, developers wanting to construct buildings more than 150 feet tall or more than nine habitable stories must get a specific-use permit.

That means the developer will have to go before a city council known for yielding to public pressure to address concerns of residents who don’t want buildings blocking sunlight, affecting wind patterns or increasing traffic in neighborhoods.

Meeting Resistance

Already, Houstate is meeting with some neighborhood resistance. Late last month, the Denver Court Neighborhood Association convened a meeting with Houstate, drawing more than 80 people.

“The majority of our neighbors are very concerned about the impact a project this size is going to have on our neighborhood,” said Gary Schero president of the Denver Court Neighborhood Association. “There’ll be traffic, noise and construction across from residential houses.”

Shafran said the meeting with residents wasn’t easy.

Houstate will continue to work with residents, but doesn’t want to downsize the scope of the project, lest it become economically unfeasible.

Although relatively new to the scene, Shafran said he understands that change in Galveston doesn’t come easy.

But if not Houstate, then another developer will come along with plans for Fort Crockett property, he said.

“In the last 20 years, none of the new developments were built without this argument,” he said.