GALVESTON — The long vacant Falstaff Brewery building is under contract to a Friendswood attorney and developer after a Dallas firm hoping to make a mixed-use project there profitable called it quits.

Jerome Karam, known for restoring historic properties on the island and mainland, is the latest developer to plan uses for the 313,000-square-foot building and surrounding property, which is north of Broadway and west of The Strand Historic District.

Karam is considering developing a boutique hotel, condominiums, retail, student housing and cruise-ship parking at the site, 3303 Church St.

Karam, who is behind the renovations of several historic downtown properties on the island and in Friendswood, has six months to assess the site before closing on the acquisition, he said.

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 in 1981. 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.

Before Karam, Dallas-based Matthews Southwest had the Falstaff building under contract for nearly a year but decided not to buy it. Matthews Southwest had studied several uses for the property but was unable to find one that made financial sense.

“They were looking at the highest and best use of the property, considering multiple different pathways,” Galveston Economic Development President Jeff Sjostrom said.

Matthews Southwest didn’t just consider renovating the building, but also looked at how redevelopment might fit into the overall rejuvenation of the area north of Broadway, Sjostrom said.

Matthews Southwest has made headlines for high-profile projects, including redevelopment of the historic Sears, Roebuck and Co. buildings on Lamar Street in Dallas, and has a reputation for finding blighted sites and skillfully leveraging financing for projects, while balancing the “civic implications of urban redevelopment.”

But Karam said he too has a track record of redeveloping historic buildings and sees potential in the Falstaff site.

Karam is developing luxury condominiums in one of the old Hendley Buildings, 2016 Strand, built in 1859.

He also played a role in the residential development of the historic downtown building that formerly housed department store Eiband’s and is a partner with Andy Vickery in the redevelopment of the Medical Arts Building, 302 21st St., also in the island’s downtown.

The Medical Arts Building, a badly deteriorated art deco structure, was an annex to the American National Insurance Co. building of 1913, which was demolished in 1972 after the company moved into its 20-story downtown tower in 1971.

Karam also has redeveloped old buildings in Friendswood. In Texas City this year, he acquired the former Macy’s building at the Mall of the Mainland and is redeveloping the property in a commercial project that will include Palais Royal and a World Gym.

Although it appears to be in bad shape, Falstaff Brewery is structurally sound, most everyone agrees.

It’s almost too structurally sound, said David Watson, an island architect Karam commissioned to work on the Falstaff project.

The structure was designed to handle tanks and heavy weights of liquids, Watson said.

The brick buildings were skinned over with plaster some time in the 1960s, from what Watson has been able to determine, he said.

“We have done some investigation by removing plaster to expose underlying ornate brick,” Watson said. “At this time we cannot be sure, but it appears a significant amount of the brick detailing remains.”

The goal is to expose as much brickwork where possible, he said.

“We are fortunate to have detailed drawings from the Falstaff corporate offices dated 1967,” Watson said.

Redeveloping the Falstaff building would spur a renaissance of areas from Harborside Drive to the Falstaff Brewery building, Watson said.

The project is an exciting and challenging one, but it won’t move quickly, he said. The development will occur in phases during the next several years, he said.

“This is not a tomorrow project,” Watson said.

The old building was most recently used for a 2010 horror flick about a group of architecture students who get trapped inside during a storm.

The current owner is Baton Rouge-based Drekan Co. The property has a market value of $231,750, according to the Galveston County Tax Assessor/Collector’s Office.

Karam said he typically closes on acquisitions quickly, but in the Falstaff Brewery case, it’s necessary to navigate title issues. He also buys properties at fair prices and revives them, he said.

“That’s just what I do,” Karam said. “I buy them at a great price, use creativity and bring them back to life.”

Contact reporter Laura Elder at 409-683-5248 or

(2) comments

Bill Broussard

Good for you and thank you Mr. Karem. I wonderful old building that has not been used for years. The paper did not say so but I know you will have to invest heavily to remove the asbestos.

Used to visit my Uncle who worked there in the 1950's and it was quite a place. I do believe redevelopment would spawn a new corridor to the downtown. Good luck.

Are you related to any of the San Antonio Karem's?

Jarvis Buckley

I know this will make T. Woods smile . This has been his pet project area for many years. Hope mr. Karem is not chasing a wild goose. We will see.......

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