GALVESTON — When the 10-story Jean Lafitte Hotel was built in 1927, its modern architecture was meant to attract business travelers and give the island’s Victorian downtown a more modern appeal. Empty for two decades, the property has become a symbol of faded glamor and lost prestige; its crumbling facade a prominent reminder of better days and the broken promises of developers.
But Tuesday, elected officials, city staff members, business owners and law enforcement officials gathered in the building’s gutted shell to celebrate one of the most significant restorations of a historic downtown building in decades. They hoped the building at 2101 Church St. would once again come to symbolize investment and progress.
Port Arthur-based The ITEX Group plans to spend $12.5 million transforming the property into an apartment complex with 83 units and retail sites on the bottom floor.
Construction crews this week already had begun work on what’s been named 2101 Church Street Apartments, expected to be complete in 12 to 14 months. In 2009, The ITEX Group bought the property from Houston businessman Tracy Suttles, who purchased the vacant hotel in 1999 with plans to convert it to luxury condominiums. Suttles’ plans never materialized.
“Today is a real start to a major change and major face-lift to the property,” said Chris Akbari, vice president of The ITEX Group.
The ITEX Group said it would work to restore the original look of the building when it was a thriving hotel.
Financing for the project comes from several sources — $3 million from the sale of historic tax credits from a federal program meant to encourage preservation; $5 million in Community Development Block Grant administered for disaster recovery after Hurricane Ike struck in 2008; and a $2.8 million Federal Housing Administration-backed loan from Davis Penn and equity from The ITEX Group.
The government funding comes with stipulations, including that the developer set aside 46 units for people earning 80 percent or less of the median income.
To qualify for affordable units, a single person could earn no more than $35,750 a year, while a family of four could earn no more than $52,800.
Rent for the affordable housing set aside apartments will be capped at $714 for one-bedroom units and $866 for two-bedroom units, according to state rules.
There will be no income restrictions on the remaining 37 units.
After five years, there will be no income restrictions on the property that The ITEX Group said is targeted at young professionals and people working in the dining, entertainment and medical industries on the island.
The apartments will have a modern loft design incorporating hardwood flooring, granite countertops, solid wood cabinets and ceramic tile. The structure will be eco-friendly with Energy Star-rated appliances, Akbari said.
Other amenities will include a resort-style courtyard, pool and spa.
Retail tenants have not yet committed to sign leases, Akbari said.
The ITEX Group worked closely with the Galveston Historical Foundation to maintain the historic look and feel of the building, Akbari said. Sina K. Nejad, president of Sigma Engineers Inc., said returning the building to its original glory came with challenges, namely that it had been remodeled several times and there was no original blueprint to follow.
The elevators had to be widened to meet current codes and the developers will need to add two enclosed stairwell towers to the building. Beaumont-based Sigma Engineers Financing has developed the architectural design and engineering plans for the renovations.
The ITEX Group’s low-income housing developments have met with resistance and criticism in some Texas communities over concerns about crime. Akbari said the island apartment complex should not be confused with low-income or Section 8 housing. Tenants will receive neither vouchers nor checks from the government to pay rent. All renters will have to pay for their apartments with their own money, he said.
The rent is kept affordable for five years with the help of federal grants, Akbari said. After five years, the developer no longer must abide by federally imposed rent restrictions.
Tenants will be subject to credit and criminal background checks, Akbari said.
Interim police Chief Henry Porretto, who attended Tuesday’s groundbreaking ceremony, said he’d researched The ITEX Group and made calls to law enforcement officials in communities where the firm has developed apartment complexes.
Based on that, Porretto said he was confident The ITEX Group would be responsive if any problems arose.
“I’m excited about new business coming to the island,” Porretto said. “This is not for low-income families, this is for working professionals.”
End Of An Eyesore
Eagerness to see the eyesore renovated was evident at Tuesday’s ceremony.
Mayor Joe Jaworski, members of the Galveston Chamber of Commerce, including its board chairman, V.J. Tramonte, and a representative from the U.S. Department of Housing and Urban Development attended the event.
Tramonte said his father, Joe, who would have been 94 Tuesday, often told stories about watching the rise of the Jean Lafitte Hotel. Tramonte said the rehabilitation of the building, which was a blight on the area, would help surrounding properties.
“At one time, it was the jewel of downtown,” Tramonte said. “I’m happy that it will assist in the rejuvenation of the downtown Strand area.”
The ITEX Group owns or manages 26 multifamily developments and more than 3,600 units.