Developer finalizes purchase of Falstaff Brewery property

GALVESTON - A Friendswood developer and attorney who earlier this year bought Mall of the Mainland in Texas City, has added the island’s Falstaff Brewery to his growing portfolio. After months of negotiation and due diligence, Jerome Karam has finalized acquisition of the long-vacant brewery building at 3303 Church St.

That acquisition brings redevelopment of the blighted site closer to reality and is a hopeful sign the area north of Broadway might see a revival, as some islanders have long hoped.

 

Karam in August confirmed he had the 313,000-square-foot building and surrounding land under contract. He plans to eventually develop a boutique hotel, student condominiums and commercial spaces at the site. But the immediate plan is to develop lots for cruise-ship passengers to park their cars. That endeavor is expected to generate revenue to pay for environmental cleanup at the site. Deed restrictions forbid the property from being used for residential purposes before 2017, and then only after the Texas Commission on Environmental Quality deems the cleanup was sufficient. 

 

When Dallas firm Matthews Southwest had the property under contract in 2013, its investigations found asbestos in the building and soil contamination around it. The cleanup alone would cost about $593,000, according to information from Matthews Southwest. Costs of the additional cleanup can’t be estimated without further environmental testing, Karam’s representatives have said.

 

But Karam said the project is doable and he intends to see the development through.

 

“I’m not going to fail; I have an amazing team around me,” Karam said. “I’m very determined to make this happen.”

 

Crews this week were at the site for some initial cleanup. Karam expects the property to be ready for cruise-ship parking possibly by November. 

 

“We’re cleaning it, sweeping, and just starting on the inside,” Karam said. “It’s a lot of work.”

 

Falstaff Brewery, once a sizable island employer, closed in 1981. In the past 10 years or so, at least four developers have attempted to resurrect the old building, which was built in 1905 and changed hands several times before Falstaff closed. The Galveston Historical Foundation considers the building significant. Some neighbors consider it an eyesore, however, and have advocated its demolition.

 

The Falstaff building is the last standing in the island’s Factory District. The foundation has argued the reinforced concrete structure could be rehabilitated into any number of uses and serve as an asset to the neighborhood. Neighbors have argued it’s a safety hazard.

 

Karam, along with an out-of-state partner, in March finalized the purchase of Mall of the Mainland with plans to lure new tenants and improve the 451,000-square-foot property, 10000 Emmett F. Lowry Expressway in Texas City.

 

Last year, Karam bought the 150,000-square-foot building from Macy’s, which closed its department store at the mall in 2012, but still owned the property. Since then, Palais Royal has moved its mall store to the redeveloped Macy’s building. A 42,000-square-foot World Gym also opened earlier this year in the Macy’s building.

 

 

 

Reach reporter Laura Elder at 409-683-5248 or laura.elder@galvnews.com.

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