News | 7 years after Ike, a ‘renaissance’ for Galveston Island

May 10, 2015

By Erin Mulvaney | Houston Chronicle

GALVESTON - In one of the relatively few developed enclaves on the eastern end of this barrier island, marshes and wide sandy beaches surround the 60 or so uniformly pastel houses of Beachtown. Before Hurricane Ike swept through seven years ago, the emerging community's Victorian-inspired architecture was drawing favorable comparisons to Charleston, S.C., and the New York Times even referred to Beachtown as the "Lone Star equivalent of the Hamptons."

The dozen homes there at the time were not substantially damaged, yet development slowed around the city after the 2008 hurricane that bull's-eyed the Gulf Coast city.

It was the widespread devastation across much of the island and nearby Bolivar Peninsula that set Galveston back as a destination for tourists and house hunters alike.

The average home price, which the Texas A&M Real Estate Center says had jumped to about $251,000 by 2007, up from $96,000 a decade earlier, plummeted nearly in half by March 2009, six months after Ike.

Now, like the resilient east-end shoreline that is growing each year rather than shrinking due to the patterns of erosion, Galveston is rebounding. This March, the average home price was nearly $300,000. New luxury developments have been announced across the city, and homes at Beachtown typically sell before they are completed. Developer Tofigh Shirazi envisions hotels, a midrise condo and eventually as many as 600 houses across his 260-acre spread.

City boosters share the developers' enthusiasm.

"We are the epitome of a renaissance city," said Jeffrey Sjostrom, president of the Galveston Economic Development Partnership. "We seem to be in a time of very positive economic momentum right now."

How it was then

Likewise, in 2007, it seemed things were finally turning around for the island, which had struggled to pave roads a decade earlier and had seen little large-scale development for years. Developers had begun or completed several high-rise condominium towers, resorts and new single-family homes. Residential and commercial construction permits were way up from previous years. The Port of Galveston was thriving, and Moody Gardens had just added a hotel.

A year later, the storm and subsequent national recession halted much of the progress overnight. Instead of turning a corner, the island turned onto a long road of recovery. For a time, even the cruise ships that dock parallel to Harborside Drive were routed to temporary digs farther up the Houston Ship Channel.

Those ocean liners are back now, and Carnival Cruise Lines says Galveston is its fastest-growing port. Renovations underway at terminal 2 will allow Royal Caribbean to bring in an even bigger ship in the fall.

Beyond tourism, the Port of Galveston two months ago announced a multimillion-dollar distribution center for BMW vehicles that promises new jobs and more revenue. Sjostrom cites all this activity as proof the city has put the downturn behind it.

"For those who stayed in Galveston, we are back and building stronger and better than before Hurricane Ike," he said.

That sentiment is echoed by Mayor Jim Yarbrough: "We feel real good about where we are headed."

One of the most visible demonstrations is the increase in luxury development across the 32-mile-long island. On the west side, closer to Jamaica Beach, a developer has broken ground on a project called Bayside at Waterman's, anchored by a restoration of the Stewart Mansion. It will include 162 residential lots on 21 acres. Plans call for high-end houses and waterfront townhomes, a marina and boardwalk, plus a resort-style pool and lazy river.

At the Gulf-front San Luis Resort, owner Tilman Fertitta has begun work on five "lavish" private villas, a freestanding collection of 800-square-foot suites adjacent to the existing hotel that are scheduled to open in early summer.

The villas, modeled after high-end hotels in Miami and Los Angeles, have the option of private check-in and check-out, arrival by helicopter or limousine and private verandas with a hot tub and private waiter service at an exclusive pool.

"I envision The Villas at The San Luis as an elegant retreat unlike anything else available on the Gulf Coast," said Fertitta, chairman and CEO of Landry's.

Downtown projects

And in downtown Galveston, developers continue to reinvest in historic properties, Sjostrom and Yarbrough say. Five-star hotels are in the works. Even the century-plus-old Falstaff Brewery, abandoned since 1981, could be on the cusp of renovation as a mixed-use development, they say.

The mayor also cites an abundance of public projects, including plans to beautify the Seawall, return the trolley system and rebuild streets.

"Memories are short," Yarbrough said. "We are coming back and coming back better than before."

Thinking ahead

From the top floor of his Beachtown sales office, Shirazi looks out over rows of homes. At the center is a restaurant, bike shop and creamery, surrounded by curving streets, roundabouts and very green lawns.

Beyond the village, he points to the marshy land where he plans to expand. He turns and points out a cluster on the horizon of large buildings that make up the University of Texas Medical Branch, the proximity of which makes his development stand apart, he said.

When he set forth to build in the 1990s, many developers questioned his choice of Galveston Island as a place for a high-end housing development - one on par with developments where the beaches are more classically pristine, such as Florida or California.

"Initially, people were making fun," he said. "Why would you do such a project in Texas?"

All existing homes at Beachtown are sold, and Shirazi boasts that he recently attracted permanent residents from New York, New Jersey and San Francisco.

Withstanding nature

The houses are being built with construction techniques designed to increase resistance to natural hazards like wind, fire and floods - which paid off during Ike.

San Antonio-based architect Michael Imber said he was brought in around 2006 to strategize about the look and feel the developers wanted for the community.

"Texas has had this influence from old fishing camps: If you build on the coast, it should be cheap, telephone poles in the sand with something on top of it," Imber said.

He said they wanted to build sustainable homes that could withstand "the force of nature" and also endure stylistically.

He said what makes the construction unique is attention to the scale of detail you see in historic Galveston homes, the literal construction of a row house with a short frontal piece and long, clean sides. Small details also stand out, like the ability to see a front door. Front porches have access to breezes. Both ends open to naturally cool the house.

Shirazi said about 10 homes are under construction at one time, but he plans to pick up the pace. The homes range from cottages to larger homes that have high-end luxury features, workout rooms, movie theaters and pools on the bottom floor overlooking the beach.

Shirazi declined to specify the prices.

"At the end of the day, we try to achieve this as a gift to Texas," he said. "I hope it becomes a beloved place."