GALVESTON — An island businessman has agreed to sell a historic building to the Port of Galveston and contractor Turner Construction to settle a lawsuit that for months halted construction of a $6 million transit terminal in the city’s downtown.
Allen Flores, who owns the 1898 James Fadden Building at 2410 Strand, sued the port and Turner Construction in April last year, claiming crews had damaged the foundation and footings of the building where he operates a restaurant and nightclub.
The port declined Wednesday to release specific financial terms of the settlement until all parties had signed the agreement and the lawsuit was dismissed, which was expected to occur May 29. Flores also declined to comment, citing confidentiality agreements.
But port officials have confirmed that Turner Construction Co. would buy the building and the port would take title.
For four years, Turner will have an option to keep or sell the building, according to the settlement. After four years, the port will own the building outright if Turner doesn’t exercise its option.
Flores’ restaurant, Hot Taco Kitchen, and his Salvation Nightclub are expected to move to a location yet to be disclosed.
The port will be responsible for maintaining the James Fadden Building, designed by N.J. Clayton & Co. It originally housed James Fadden’s wholesale wine, liquor and cigar business, according to the Galveston Architecture Guidebook.
The port must abide by rules meant to protect historic downtown buildings and will maintain the property, Port of Galveston Director Michael Mierzwa said.
The legal dispute has greatly delayed construction of the Downtown Intermodal Transportation Terminal, planned for the northeast corner of The Strand and 25th Street.
City and port officials celebrated the groundbreaking in January 2013; they expected the terminal to open in October. But work slowed in May last year and had completely stopped by August because of the litigation.
Port officials expect Turner to resume work on the terminal immediately after the settlement is final and the lawsuit is dismissed later this month, Mierzwa said. Crews are expected to complete the terminal by early next year.
The port in November 2011 agreed to partner with the city in building the transportation terminal after outbidding Mitchell Historic Properties for the neighboring Shearn Moody Garage, which the city owned.
The port also agreed to bring the Shearn Moody Garage up to code at a cost of about $1 million. The city will lease the transportation center from the port for 40 years.
The terminal, which will take up half a block in The Strand Historic District, will house an information center, 170-space parking garage, retail space, public restrooms and a city bus terminal. It will connect by ramp to Shearn Moody Plaza, 25th Street and Harborside Drive.
The $6 million project is financed by grants from the Federal Transit Administration.
The transportation terminal got off to a rocky start. New construction of that magnitude is rare in downtown, particularly in The Strand Historic District, defined by its 19th-century feel and carefully restored buildings occupied by galleries, restaurants, lofts, professional offices and shops.
Some terminal opponents argued the modern design didn’t blend well with the historic buildings downtown. After much debate and several revisions, Houston firm Powers Brown Architecture in July 2011 won approval for the controversial modern design of the center.