Collateral damage: If there’s a theme to this week’s column, it’s that bankers are taking legal measures to recover loans made on developments and ventures that were once big Buzz items.
Islanders were buzzing last week about the posting for foreclosure sale of multiple tracts and lots that are part of Bayside at Waterman’s, a luxury waterfront development on Galveston’s West End. According to a Notice of Substitute Trustee’s Sale, Icon Bank made a loan of $1.02 million in March 2016 to mortgagers Laffite’s Harbor Development II LP, Laffite Holdings LP, Roy E. Oswalt and Todd Edwards. And the posting for foreclosure sale documents also show four other Bayside at Waterman’s parcels with original loan amounts totaling $9.7 million.
Edwards, who mainly spoke to media about the development, did not answers calls or respond to other attempts to reach him.
Various lots and tracts in the development, on the shore of Lake Como on 21 acres between the Galveston Country Club and Galveston Island State Park, are scheduled for a foreclosure sale no earlier than 10 a.m. Oct. 3, and “no later than three hours after that time,” at the Galveston County Courthouse, first floor, 722 21st St., in Galveston.
Bayside at Waterman’s first phase included 11 waterfront town houses, a private deck and swimming pool and 67 covered boat slips.
The development also included the restored Stewart Mansion, a 6,530-square-foot building meant to serve as a luxury clubhouse and event center in the resort community.
Todd and Lori Edwards bought the Stewart Mansion property in 2008 and worked closely with the Galveston Historical Foundation on restoring the Spanish-style house, which was built in 1926, changing ownership several times under civic and military leaders and prominent families such as George Sealy, the Stewart family in 1933 and George Mitchell in the 1960s. It had been vandalized and vacant for years before the Edwards redeveloped it.
It was unclear on Friday whether the Stewart Mansion property was part of the foreclosure sale.
PID question: In December 2014, after more than a year of discussion and review, the city council authorized a special district to help finance about $7 million in infrastructure at Bayside at Waterman’s.
Public Improvement Districts allow governments to collect special assessments on properties within defined boundaries. Residents of Bayside at Waterman’s pay the property assessment in addition to regular taxes. Officials all along said the city would not be at risk should there be any problems.
Governments typically are protected from responsibility for repaying the bond debt. Public Improvement Districts are self-supporting, with no city financial obligation and no effect on bond capacity. Failure by the developer to service the debt, estimated at $800,000 in yearly installments, puts the land at risk of foreclosure. Information about the status of the Public Improvement District was not immediately available.
More to come: Look next week for buzz about land in another major commercial development — this one on the mainland — that’s also posted in the Oct. 3 foreclosure sale and involves a $12.5 million loan.
Bank notes: Meanwhile, Moody National Bank has filed a lawsuit against Ocean Grille and Beach Bar and its former owner for failure to meet terms of a $250,000 loan. Ocean Grille, which until December 2016 had operated at 1228 Seawall Blvd., was, as of the Aug. 22 filing of the lawsuit, in default for failing to make the January, February, March, April, May and June installment payments, according to the lawsuit.
“Furthermore, Ocean Grille is in default of the promissory note because of a change in ownership of Ocean Grille,” according to the lawsuit.
Randall Pettit in December informed Moody National Bank he had sold the restaurant and was exiting the business, according to the lawsuit.
Ocean Grille closed in December. Pettit at the time told Biz Buzz new investors planned to rebrand and reopen a restaurant at the site. Information about those new investors was not immediately available. Pettit last week declined to comment.
The dirt: Inquiring readers are asking about dirt work on land behind Randalls, which is on Central City Boulevard off 61st Street in Galveston. Crews are filling in low areas in ongoing efforts to elevate the site, said Douglas Rogers, executive director of The Sealy & Smith Foundation, which owns the land through a nonprofit affiliate.
But all the work is not a sign the University of Texas Medical Branch has rekindled plans to build clinics and facilities on the 11-acre site. In March, the medical branch said it had shelved the plans indefinitely. Medical branch officials this week said the plans remain on the shelf.
Medical branch officials in 2013 announced plans for the first phase of development they called West Island Clinic, which would have encompassed 30,000 square feet. At the time, The Sealy & Smith Foundation — the medical branch’s largest benefactor — had finalized the purchase of the parcel.
The foundation acquired the land from island hotelier and businessman Sam Gandhi. Through the years, and working with the U.S. Corps of Engineers, the Gandhi family had filled most of the site, making it readily developable, officials have said. But elevation work is still necessary in some parts, Rogers said this week. Crews are not working on or near wetlands, Rogers said. What readers might have noticed in recent days was crews cleaning concrete from soil brought to site from excavations elsewhere on the island, Rogers said.
On the burner: Hurricane Harvey delayed a planned Labor Day comeback of a once-popular Kemah eatery. Now, Kristine Garbo plans an Oct. 1 reopening of What’s Cookin’, 926 FM 518.
Garbo closed the restaurant in 2012 to tend to her home and health. What’s Cookin’ specializes in sandwiches, including the famous Reuben and a grill station known for steaks. Randy Braat, the former chef who started with Garbo in 1989 and worked at the restaurant for three years, will return.
Keep on truckin’: Meanwhile, Garbo also is revving to open Kemah Food Park on 2 acres at 930 FM 518. The park will feature about five food trucks with a variety of menus from different vendors. Stay tuned.
Office space: Look soon for construction to begin on Professional Park at Ninety-Six, a 13,000-square-foot medical/professional office building at 835 League City Parkway. Work is scheduled to be completed by the first quarter next year.