Frost Bank building

The Frost Bank Building at 2201 Market St. in Galveston.

An international businessman, who in 2013 paid cash for the United States National Bank Building in the island’s downtown, is divulging more details about plans for the historic property, 2201 Market St.

Hadar Goldman, with holdings in Tel Aviv, the United Kingdom and Chicago, plans to invest about $9.5 million to transform what locals refer to as the Frost Bank Building into a “high-tech place to live and work, with state-of-the-art amenities and technology, including a cooperative work space, a spa and wellness center and a yoga studio.”

The spa and yoga center will be at street level, Goldman said. Frost Bank will continue to lease two floors, while Kempner Capital Management will remain on the top floor of the 12-story building. Between the Frost Bank floors and Kempner Capital Management offices, Goldman plans to develop as many eight floors of apartments and spaces that allow people to live and work in the same building.

Goldman last year floated the idea of converting parts of the building to residential occupancy.

“Nationwide, we are seeing a shift away from traditional office spaces, and Galveston is no exception,” Goldman said. He cites the neighboring National Hotel Building Artists Loft, 2221 Market St., as an example. There, artists work and live.

“What they have done for artists, we hope to do for startups and small businesses — provide a place to live and work comfortably in the community,” Goldman said.

The University of Texas Medical Branch occupies some space in the building. The medical branch’s lease is about to expire, but officials are welcome to renew it, Goldman said.

Goldman envisions a “smart building,” he said. In such buildings, tenants can use their smartphones to control the heating, air conditioning, security and lighting, he said.

There’s a historic significance to the Kempner Capital Management continuing as a tenant, Goldman said.

“The Kempner family is woven into the fabric of the building and Galveston,” he said. “The Kempner family originally owned the controlling interest in United States National Bank.”

The bank merged with Cullen/Frost Bankers in 1982, but operated separately until 2000. It was the last bank in the country to use the “United States National Bank” title.

Island architect Michael Gaertner will participate in the renovation of the building, as will New York branding consultant Karim Rashid. The ITEX Group, which completed the historic renovation of the downtown island Jean Laffite Hotel in 2013, and is planning another apartment development downtown, also is involved in this project.

Look for work to begin early next year.

Laura Elder: 409-683-5248;

Managing Editor

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