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Application outlines plans for Rollover Pass fishing pier

The Texas General Land Office wants to build a 1,000-foot-long T-head pier into the Gulf of Mexico to replace Rollover Pass, the popular fishing spot on Bolivar Peninsula that was closed this fall.

The land office has submitted its plans for the pier to the U.S. Army Corps of Engineers. While officials have long promised to build a park and fishing pier to replace the pass, the application for a corps construction permit provides the most detailed information yet about the project.

While the pier was always promised, it was a relief to see official plans drawn up for the structure, Galveston County Commissioner Darrell Apffel said. Apffel’s precinct includes Bolivar Peninsula.

When the pass was closed to anglers in September, some critics of the project questioned whether plans for a pier were real because the Army Corps had not yet received an application for construction, he said.

“It’s always comforting for people to do what they say they’re going to do,” Apffel said. “It will be a place to fish, and it will be a lovely park for people to come and enjoy.”

The land office’s permit asks for permission to build a long pier that ends in a 70-foot wide T. The pier would be made of concrete with a wooden deck. It would be built west of the mouth of the pass, according to the application.

The permit also calls for amenities that would include a bait vendor’s stand, visitor center and restrooms, as well as parking and picnic areas.

“The purpose of the proposed project is to provide fishing and other recreational opportunities for the general public to replace those lost as a result of the closure of Rollover Pass,” the land office wrote in the application.

The land office needs the corps’ permission to build the pier because it will cause unavoidable and permanent impacts to U.S. waters, according to the application.

The land office considered other designs for the pier aside from the one it proposed to the corps, including a proposal to build a second pier that extended into Rollover Bay, on the north side of the peninsula. That was rejected because a pier into Rollover Bay would threaten a piping plover habitat, according to the application.

Another design called for a pier to be built perpendicular to the shoreline. That design was adjusted because the Surfrider Foundation, an environmental-advocacy and surfing activist group, requested the pier be angled in a different way to provide “better recreational activities” for surfers.

The land office’s proposed pier starts in one direction and then hitches to the south, according to the proposed designs.

The land office and Galveston County officially closed Rollover Pass in September. The agencies plan to fill in the manmade channel that connects the Gulf of Mexico to the Gulf Intracoastal Waterway.

The project to fill in the pass was proposed more than 10 years ago, but construction was delayed by lawsuits and other issues. The land office, which manages Texas coastlines, said filling in the pass is necessary to prevent erosion on Gulf beaches near the pass.

Some legal challenges to the project have continued even after the start of the construction.

The Gilchrist Community Association, a group that once leased the land around the pass, managed it and sold parking passes there, have filed multiple lawsuits to block the project.

The association’s latest motion was denied by Texas 14th Court of Appeals on Nov. 5, according to court records.

The application was submitted to corps on Nov. 1. It had not yet been approved by Friday.


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Port of Galveston plans to audit Gulf Copper, its largest land leaser

The Port of Galveston plans to launch a financial audit of Gulf Copper as it works to determine whether the company, which leases land on Pelican Island, is meeting terms of its lease and contributing enough to the landlord port’s bottom line.

Port Director Rodger Rees confirmed Friday he plans to hire a forensic auditor to review the port’s lease with Gulf Copper, which repairs offshore rigs and marine vessels on 107 acres, representing the most land leased by a port tenant. Gulf Copper has operated on Pelican Island since 2005.

Rees called the audit a normal exercise permissible under the port’s lease agreement with Gulf Copper. The audit is explicitly tied to questions about the oil rigs that are kept at the Gulf Copper facility on Pelican Island. The port wants to determine whether the company is following the terms of its lease, which require the company to be actively working on the rigs stored there.

“We have the responsibility, the way we look at it, to audit them,” Rees said.

As of Friday, Gulf Copper’s Executive Vice President Jonathan Hale said he hadn’t heard anything from the port about an audit but called the issue a “non-story.”

“Under the lease developed by the port, audits of our revenues are allowed and have been undertaken in the past,” Hale said. “There have never been any anomalies, and we would not expect there to be in any future audits.”

The company believes it’s in full compliance with its lease, Hale said.

But members of the wharves board, which governs the port, have questioned whether Gulf Copper is competing with the public docks for lay dockage, an increasingly significant revenue source for the port. The port generally imposes lay dockage fees on vessels using its berths for lay up or maintenance.

“When I got here, I got questions about the size of the land and the revenue it was generating,” Rees said. “After reviewing their lease, I had questions about where’s the activity. You’ve got rigs that are sitting here stationary, have been for a long time.”

Before the wharves board met on Sept. 27, Chairman Albert Shannon, who asked for the Gulf Copper lease to be placed on the board’s agenda, said he had questions about the rigs at Gulf Copper and whether their presence in the port complied with the port’s lease.

The port’s lease with Gulf Copper prevents the port from collecting dockage fees from any vessel berthed at the shipyard as long as it has had work performed on it within a 72-hour period, or unless the company can say in “good faith” that it was performing work on the vessels.

“The lease says that they must be doing work on the rigs that are there,” Rees said. “The rigs are outside my window. I’m just wondering if in fact a lot of work is being done. I’m not trying to ruffle feathers with anybody.”

The audit might also be an indicator of a larger discussion port leaders are having about the future of leased space at the port and what kind of land-use decision it plans to make in the future.

The port’s new 20-year master plan, which was published last week and is set to be put to a board vote in December, includes a large section on land use — and how the port will change its use of land over time. The plan notes that, under its current agreements, 42.6 percent of the port’s 719 acres is under lease today.

But the port’s long-term lease agreements are set to drastically drop off in coming years. By 2025, the amount of committed land is reduced to 28.5 percent. By 2040, at the extreme end of the master plan’s outlook, the amount of leased land is reduced to 14.1 percent.

The master plan indicates that Gulf Copper’s current lease will expire between 2030 and 2040.

The plan also offers a lukewarm assessment of the value of Gulf Copper’s current lease with the port.

Gulf Copper’s business is dependent on the price of oil, the report states, and to be cost-effective, the value of a barrel of oil needs to be around $70. That’s a mark that’s rarely been reached since 2014, when global oil prices crashed.

A general trend toward higher prices could bring more rigs back online, and bring more work back to Gulf Copper, the report states.

“The port should monitor the market potential of Gulf Copper as it currently is underperforming in terms of revenue given the lease structure,” according to the master plan.

Hale took exception to that characterization in a statement to The Daily News.

“We believe that the port has experienced superior performance from the shipyard when compared to almost all other lines of business, since its purchase in the early 1990s,” he said. “We also believe, with the support of the port, that the shipyard will continue to provide superior returns far into the future.”

Gulf Copper came to the Port of Galveston in 2005, when it took over the land owned by First Wave Marine, which was formerly known as Newpark Shipbuilding. Before First Wave, the property was best known as the home of Todd Shipyard, which closed in 1987.

Todd Shipyard was once an anchor of the island’s economy but went bankrupt in 1987. The property sat unused for 10 years and was taken over by First Wave in 1997. That company closed its doors in 2004, laying off 80 people in the process.

For its part, Gulf Copper claims to have paid the port more than $23.5 million in lease payments since it came to Galveston, in addition to $7 million in land improvements and $2 million in property taxes.

Gulf Copper has made $16 million in supplemental payments to the port during busy times with high offshore drilling activity, Hale said.

Port financial records demonstrate the company’s contributions to the port’s overall operating revenues have fluctuated over its nearly 15 years in Galveston.

In 2007, Gulf Copper generated $4.1 million in revenue for the port, making up 19 percent of the port’s total revenues. In 2016, when global oil prices crashed, the company generated $607,566 for the port, amounting to 2 percent of the port’s revenues.

The company does not plan to leave the port, Hale said. Rees expected the company to remain in Galveston for a long time, he said.

Still, Hale said he was frustrated by a lack of communication between the wharves board, the port administration and the company.

In October, Hale appeared before the board and invited each member to visit Gulf Copper and tour the facility. None of the board members took him up on the offer, he said.

Wharves board trustees reached by The Daily News said they had little information about the port’s plan to audit Gulf Copper, though were generally supportive of the idea of reviewing all of the port’s current leases, they said.

Shannon said it was the port’s duty to ensure the public is getting the return it deserves from port tenants. But it doesn’t mean the port’s trying to chase a tenant out, he said.

“We’d love to see them busy,” Shannon said.

Wharves Board Trustee Ted O’Rourke said he supported auditing all of the port’s tenants to ensure positive returns for the port. The port regularly monitors its tenants and their rent payments, but the size and complexity of Gulf Copper’s financials made it more prudent to hire an outside auditor, Rees said.

The wharves board is scheduled to meet in a regular meeting on Tuesday.


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Galveston hotel tax, beach admission revenues decline

GALVESTON

Galveston for the past decade has enjoyed robust and steady growth in beach park admissions and in hotel occupancy tax collections, but in the 2019 budget year, both measurements were less than what tourism officials predicted.

The Galveston Park Board of Trustees, which manages island beaches and promotes tourism, blames the decline on several factors, including the need for increased investment in park improvements.

In 2019, the park board collected $8.04 million in hotel occupancy taxes, about $160,000 less than the $8.2 million it expected to collect and $260,000 less than the $8.3 million in brought in last year, according to the park board.

Admissions fees generated from the parks were also about 10.5 percent less than park board expected, $4.5 million compared with $5 million, and slightly less than the $4.6 million collected last year, according to the park board.

Both revenue sources are reliant on visitation, which is influenced by the weather and by the state of park facilities, park board Executive Director Kelly de Schaun said.

“The facilities need investment,” de Schaun said. “At Seawolf Park, where we have invested significantly in fishing infrastructure, playground and improvements to historic vessels, the park has tripled revenues over the last eight years.”

The federal government shutdown earlier this year and the cancellation of some Carnival cruises caused by mechanical problems, might also have hurt visitor numbers, park board Chairman Spencer Priest said.

But Priest agrees the island’s parks need to be made more attractive, he said.

“The trustees are also encouraging staff to establish better forecasting tools to make more accurate projections,” Priest said.

In the 2020 budget year, the park board expects to collect in total $18.46 million, $380,000 more than the $18.08 million it collected in total in the 2019 fiscal year, de Schaun said.

Hotel tax collections have been on the rise since 2009, when the park board collected only about $7.9 million in hotel taxes, according to park board record.

Visitation has increased over the past decade as well, with 7.2 million tourists visiting Galveston last year compared with 4.5 million in 2009, according to the park board.

“For the last several years, demand has outpaced supply, but it is now starting to balance,” de Schaun said.

While revenues were down from what was projected in the park board’s budget, all the parks generated excess revenues, de Schaun said.

“Year-over-year growth has been phenomenal,” de Schaun said. “It was expected that we would see some type of general slowdown.”

The decline in hotel tax revenues isn’t a situation unique to Galveston, said Michael Woody, chief tourism officer for the Galveston Island Convention & Visitors Bureau.

“In markets across the country, future booking rates are down for 2020 and 2021,” Woody said.

Tourism officials will often see uncertainty around national elections, Woody said.

“We are optimistic that the anomalies that caused us to fall slightly short in meeting our projections last year won’t occur again this year, and we’ll be able to meet our goals,” Woody said.


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$500,000 Moody Foundation grant to pay for public plaza in Galveston

GALVESTON

The city of Galveston plans to build a public plaza on the site of the old fire station with a $500,000 grant from the Moody Foundation.

It’s a project city officials have eyed as part of a larger plan to enhance the space north of Broadway and west of 25th Street in hopes of driving more private investment to the area.

The plaza will be built on the site of what is now the old annex building behind city hall, 823 25th St.

Crews plan to start demolishing the 20,000-square-foot annex this month, a process that started after the city in August opened its new $9.6 million Fire Station No. 1, 823 26th St.

The Galveston Fire Department had been using the annex building as the fire station since 1965, officials said.

The cost of demolishing the annex is included in the fire station budget, money that came from federal disaster relief funding, according to the city.

But the post-Hurricane Ike money wouldn’t pay for any improvements to the site once the annex is torn down, and the city wanted something more aesthetically pleasing on the land, City Manager Brian Maxwell said.

The plaza will have landscaping, benches, brick pavers, trees and a decorative screen to block the view of utilities at the back of city hall, city spokeswoman Marissa Barnett said.

The city was originally looking at putting a park adjacent to Fire Station No. 1 at the corner of Broadway and 26th Street, but buying the property didn’t pan out, Barnett said.

The city reapplied for the grant this fall with the city hall plaza project in mind, Barnett said.

The city will hire a contractor for the work, Barnett said.

The project is consistent with the goals the Moody Foundation has for making Galveston more livable, said Allan Matthews, grants director for the Moody Foundation.

“Galveston certainly needs more green space and community areas to gather,” Matthews said.

Matthews hopes this project will be a model for other green spaces in the city, he said.

The project also is consistent with city efforts to revitalize and beautify much of the area north of Broadway, Matthews said.

Improving the area north of Broadway and west of 25th Street has been a goal of many city officials in the past few years, including Mayor Jim Yarbrough.

The city has repaired sidewalks on the streets west of 25th Street, hoping to encourage the investment of private dollars in the area.

Public investment could drive private investment, Maxwell said.

“It really drives improvement in those areas,” Maxwell said.

The plaza behind city hall, which can function as a space for some events, will play a role in that effort, Maxwell said.

“It’ll be a nice addition to the north side of Broadway,” Maxwell said.

The city is at the same time undergoing renovations to city hall.

The roughly $249,000 city-funded project is adding restrooms to city hall.

The city had planned a much more substantial rehabilitation, but the plans were put on hold after the city paid Hurricane Ike disaster recovery housing contractor CDM Smith $13.5 million. The company had sued after the city fired it in 2012, saying it hadn’t been paid for work done before its termination.

Demolition of the annex will be completed sometime after Thanksgiving, Maxwell said.

After demolition is complete, crews will begin construction of the plaza, according to the city.