A1 A1
News
'No ordinary transaction' Texas firm to buy Hotel Galvez, Tremont House in Galveston

GALVESTON

Mitchell Historic Properties has agreed to sell iconic, historic island properties Hotel Galvez & Spa and The Tremont House to a Texas-based hospitality, management and investment group, a transaction members of the George P. Mitchell family described as bittersweet but part of a larger plan to leverage commercial holdings for the city’s benefit.

Mitchell Historic Properties and SRH Hospitality Galveston Investments are expected to close the deal within the first quarter of the year and don’t plan to disclose financial terms of the sale of properties inextricably linked to the late George P. Mitchell and his wife, Cynthia. George Mitchell, an island-born developer, oilman and philanthropist, invested many millions of dollars to revitalize downtown and revive old island buildings.

Mitchell Historic Properties is owned by Mitchell’s estate, which plans to contribute most of the money from the sale to the Cynthia and George Mitchell Foundation, company officials said in a prepared statement.

“With the pending transition of the hotels to very capable hands, we will now be better positioned to prioritize community impact in our remaining holdings,” Grant Mitchell, president of Mitchell Historic Properties and chairman of the Cynthia and George Mitchell Foundation, said in the statement.

Mitchell Historic Properties owns the hotels, but they’re managed by Wyndham Grand Hotels, which, between the two properties, employs about 300 people. Employees were informed of the pending sale Thursday, Grant Mitchell said.

KEENLY AWARE

Grant Mitchell in a phone interview Thursday said he couldn’t speak for SRH Hospitality but thought officials of the Dallas-based company would be “shooting themselves in the foot” if they didn’t keep existing employees after the acquisition.

“Our hotels have outstanding management,” said Grant Mitchell, who is George Mitchell’s son.

Officials with SRH Hospitality couldn’t immediately be reached for comment, but the company released a statement Thursday:

“We’re keenly aware of Cynthia and George Mitchell’s legacy and the family’s importance to Galveston and the greater Galveston Island community,” said Paul Barham, CEO of Harrell Hospitality Group LLC, a partner in SRH Hospitality, whose company will operate the island hotels.

“We understand this is no ordinary transaction and one that was not taken lightly by the Mitchells. It will be our honor and privilege to serve as the new stewards of these iconic landmarks, and we are looking forward to investing not only in the continued success of these historic properties but just as importantly in the Galveston community.”

MAYBE MARRIOTT?

Some islanders have been speculating for days that the buyer would be a Marriott franchisee. Those insiders said the island properties would benefit from Marriott’s extensive reservation system. Marriott in 2016 closed a merger with Starwood, creating the world’s largest hotel company with more than 5,700 properties, 1.1 million rooms and a new portfolio of 30 brands. SRH has developed several properties under Marriott brands.

Speculation in recent days has been the 224-room, beachfront Hotel Galvez, 2024 Seawall Blvd., would fall under the Autograph Collection, which includes properties Marriott describes as “rich in craft and character, design, architecture and unexpected back-stories.”

It wasn’t immediately clear whether The Tremont House, 2300 Ship Mechanic Row in the island’s downtown, also would be included in the Autograph Collection.

Grant Mitchell said he would be surprised if the new owners changed the names of the well-known island properties.

STORIED HISTORIES

The Hotel Galvez traces its history to 1911, when the Galveston Hotel Co. announced plans for a new year-round beach hotel. Construction was launched the same year, helping restore the island as a tourist destination after the 1900 Storm. It has had various owners, including the Moody and Kempner families, over the years.

In 1988, The Galvez sold at auction after its owner declared bankruptcy. Aetna Life Insurance Co., the mortgage holder, took it over for $7.68 million. Mitchell Historic Properties acquired the hotel from Aetna in 1993 for $3 million and undertook a $20 million upgrade of it to restore its 1911 appearance.

There once were two Tremont Houses on the island — one built in 1839 and destroyed by a fire and another built in 1865, which deteriorated after the 1900 Storm and was condemned in 1928. In 1981, George and Cynthia Mitchell acquired the 1879 Leon & H. Blum Building, which formerly housed a dry goods store, and developed what would be the third Tremont House, which features 119 rooms.

Mitchell Historic Properties also owns hotel Harbor House on Pier 21, which isn’t part of the transaction.

NEW STRATEGY

George P. Mitchell, founder of Mitchell Energy & Development Corp, made his fortune wildcatting for oil and natural gas. He died in 2013.

Grant Mitchell attributed the decision to sell the properties to complex estate issues and a strategy to review Mitchell Historic Properties’ holdings to determine how they could best be leveraged to benefit the island and the foundation.

Since its incorporation in 1978, the foundation has distributed or pledged an estimated $750 million in grants to myriad causes, programs and institutions.

“The foundation’s Galveston Program’s long-term objective is to drive a gradual transformation to safer, more livable neighborhoods and green spaces, affordable housing, equitable access to health care, social services, quality education, healthier environments and greater employment opportunities on the island,” foundation officials said.

Islanders are attached to both hotels and associate them with George and Cynthia Mitchell, who shared an affinity for the eclectic seaside city and often looked for ways to contribute to its fragile economy, family members said. Mitchell Historic Properties has invested more than $150 million in commercial space, loft apartments and three hotels, mostly within The Strand National Historic Landmark District.

Grant Mitchell recalls walking The Tremont House during renovations in the 1980s, he said. In his mind, it will forever be linked to his parents, he said.

“I share that attachment,” he said. “It’s completely so tied to their history. It’s hard to let it go, but it’s the right thing for the properties and the city of Galveston in the long run.”


News
editor's pick centerpiece featured
UT System holds open forum on presidential search

Someone who will champion diversity by promoting equity and inclusion. A leader who understands the history and uniqueness of the University of Texas Medical Branch and the community of Galveston. Someone who appreciates equally the medical branch’s role as an academic institution, a globally important infectious disease research center and a clinical enterprise.

These were some of the qualities faculty and other employees of the medical branch identified at an open forum Thursday in Levin Hall, orchestrated by the University of Texas System to gather input as its search committee begins recruiting candidates for the medical branch’s top leadership position.

A 15-member committee made up of regents, medical branch faculty and others was announced by the system in October after former president Dr. David Callender left the medical branch for Houston’s Memorial Hermann Health System on Sept. 1. Dr. Ben Raimer has been serving as interim president since that time.

“This is the beginning of the search process and a very important part of it,” said Dr. John Zerwas, University of Texas System executive vice chancellor for health affairs. Joining him onstage was Dr. Kirk Calhoun, president of the University of Texas Health Science Center at Tyler. Zerwas and Calhoun are co-chairmen of the search committee.

People wanting to nominate specific candidates for the position or to express opinions privately were urged to communicate through email with Isaacson Miller, the executive search management team hired by the system to help conduct the search. They can be reached at utmbpresident@imsearch.com.

At the forum, which attracted around 200 people, a string of mostly faculty stood up to lay out the institution’s needs as they saw them.

“There are a couple of areas we’ve particularly excelled at in the past, strengths I think need to be encouraged,” said Dr. Clinton White, a professor in the infectious disease division of the Department of Internal Medicine.

Those areas were indigent care, including training medical personnel to work with underserved groups like prisoners, and basic science research, particularly research conducted at the Galveston National Laboratory on the medical branch campus.

“We need a president who understands both of them,” White said.

Dr. James LeDuc, director of the Galveston National Laboratory, also spoke, saying the lab is a national treasure in the areas of global health and national preparedness for emergencies. A president who understands the political context in which the lab is set, someone with a presence in Washington D.C., with an ability to influence Congress was essential to the lab’s continued progress, he said.

“I think the lab should have a greater role in setting national objectives around infectious disease in general, more aggressive engagement with congressional delegates, with the National Institutes of Health, with the Department of Defense and other agencies engaged in this,” LeDuc said.

Several faculty and staff expressed the desire to find a president who would come to the medical branch to stay, especially given frequent changes in leadership and other obstacles, like natural disasters, that the medical branch has endured over the past decade-plus.

Alfredo Torres, a professor of microbiology who identified himself as the chief diversity officer of the medical branch, pointed to the need for a president who appreciates the talent and diversity on campus.

Asked what he feared in a candidate that the selection committee might bring to the medical branch, Torres was clear.

“That’s an easy answer,” he said. “Somebody that kills morale. Somebody that doesn’t keep pushing us to be better. Somebody that just keeps growing revenue but doesn’t recognize the talent here.”

Growing revenue is great, but it’s not everything, others echoed — among them Dr. Philip Keiser of the Department of Internal Medicine. While the medical branch has expanded its footprint and grown revenues in the past decade, an unintended consequence has been a shift away from other core missions like public service and having a positive effect on the community, he said.


News
After law snafu, marijuana arrests plunge in Galveston County

GALVESTON

The number of people charged with misdemeanor marijuana crimes dramatically decreased in Galveston County during the last six months of 2019, after a state law change made it difficult for authorities to differentiate between illegal marijuana and legal hemp, according to the Galveston County District Attorney’s Office.

During the first half of the year, before the change took effect, an average of 81 people were charged with misdemeanor marijuana possession each month, according to statistics provided by the district attorney’s office.

Between July and December, when a total of only 64 charges were filed, the monthly average plummeted to only about 10, according to prosecutors.

Although the change has reduced the number of recent charges, the district attorney’s office still intends to prosecute at least some of the misdemeanor arrests made in the past six months, officials said.

“We vowed that we would continue to prosecute marijuana cases,” First Assistant Criminal District Attorney Kevin Petroff said.

In July, Galveston County District Attorney Jack Roady informed local police departments that his office would not be able to immediately prosecute marijuana cases because of a change in the state’s definition of marijuana.

THE 0.3 PERCENT QUESTION

The problem was created by a law the Texas Legislature passed last year that was intended to legalize some hemp-based products, such as CBD oils.

The new law created separate definitions for illegal marijuana products and legal hemp-based products. The difference was defined by the amount of tetrahydrocannabinol, or THC, in an item. Any product that contains more than 0.3 percent of THC is illegal.

The problem it created was that state labs are not equipped to test marijuana products for their level of THC, and a positive identification of a drug is a requirement for prosecution, officials said.

GETTING LOW

As a result of the change, the number of people being charged with misdemeanor possession of marijuana in Galveston County has cratered, according to the district attorney’s office.

Possession of 2 ounces or less of marijuana is a Class B misdemeanor in Texas. The crime is punishable by up to 180 days imprisonment and a fine of up to $2,000.

More than 550 people were charged in the county with misdemeanor marijuana possession charges in 2019, according to data provided by the district attorney’s office.

Of those, 481 of the charges — 88 percent — were filed between January and June.

In July, another 42 charges were filed. In August, there were 19. Between September and December, there were just four.

STATEWIDE TREND

The same trend is reflected in statewide statistics. Since the new state law went into effect on June 10, the number of misdemeanor marijuana cases decreased by two-thirds, according to the Texas Tribune.

The average number of monthly misdemeanor marijuana charges filed across Texas in 2019 decreased from more than 5,600 in the month before the law change to about 1,900 in November, according to the Tribune.

There’s no exact date for when prosecutors in Galveston County, or elsewhere, will begin again charging people for marijuana possession. A testing method that could differentiate between hemp and marijuana could be ready as soon as February, Petroff said.

When that happens, the district attorney’s office will ask local police departments to prioritize which cases to send out for testing first, Petroff said. The exact criteria each department will use to prioritize testing will be up to the departments, he said.

“The concern is if they send all the drugs they had seized over that period from every agency at once to the Houston DPS crime lab, we’re going to create a problem for ourselves,” Petroff said.

MEANWHILE ELSEWHERE

Galveston County’s decision to promise prosecution in arrests that were made during the testing moratorium stands in contrast to other counties in Texas, which have totally dropped misdemeanor prosecutions of marijuana while the situation exists.

Other counties have taken to hiring private laboratories to analyze marijuana and determine whether it’s legal or not. Over the past six months, the district attorney’s office has advised police agencies to send marijuana samples to private labs for felony cases, but not for misdemeanors, Petroff said.

Locally, police departments have been asked to keep seized materials from marijuana arrests in storage until testing can begin. Prosecutors have up to two years to decide to file a misdemeanor charge against a person, Petroff said.

MICRO PROBLEM

When the time comes to move forward with testing and prosecuting lingering cases, it will be up to the district attorney’s office to determine whether the cost and effort of playing catch-up is worth it, said Adam Banks Brown, a criminal defense attorney from League City.

“What’s the end game?,” Brown said. “What are you trying to do here? What are you trying to stop? We’re not talking about hardcore drugs here. We’re not talking about large amounts of marijuana. We’re talking about personal use, small, tiny amounts of marijuana.”

Brown wasn’t convinced the start of testing would mean a quick restart of prosecutions. Any new test like the kind being talked about has to pass scientific standards, and new tests are often the target of challenges by defense attorneys, he said.

“We are entering a whole new world,” Brown said. “What exactly is the standard they’re using to test this marijuana?”

SEA CHANGE

Beyond that, there is also a question about whether state leaders will be motivated to rework the law when they convene in 2021 in order to again change marijuana laws, said Edward Mallett, a Houston attorney and past member of the board of directors for NORML, the National Organization for the Reform of Marijuana Laws.

There’s at least a small chance lawmakers could use their unintentional reform as a pathway to making a real effort for decriminalization, Mallett said.

“I think society moves in generational intervals,” Mallett said. “Those that staked their political future on the harsh punishment of marijuana in 1970s, they’ve retired and moved on now. Now, we have a new generation who came up and understood this was a relatively innocuous drug.”


News
Shriners Hospitals Houston, Galveston facilities to merge

GALVESTON

World-class research and health facility Shriners Hospitals for Children will be merging its Houston hospital with its facility in Galveston, likely bringing more employees to the island.

Shriners officials confirmed the consolidation Thursday and expect it will be completed in 2021, said Mel Bower, chief communications and marketing officer for Shriners Hospitals for Children. The organization has hospitals across North America.

Operations from the Houston hospital, 6977 Main St., will move to the Galveston facility, 815 Market St., Bower said, adding the consolidation will make services more efficient.

“Combining all of our services under one roof will be a huge benefit to families that utilize multiple service lines,” he said.

Once consolidated, the hospital will supply four services that are now spread across the two facilities: burn care, cleft lip and palate disorders care, orthopedics care and spinal care, Bower said.

The boards of both hospitals voted in July to merge the facilities. The Galveston facility is big enough to contain all the services after the consolidation, Bower said.

Bower didn’t respond to questions about how many employees would move to Galveston.

Shriners began operating in Galveston in 1963, when it opened a burn unit in a University of Texas Medical Branch building, and began operating its own hospital in 1966. In the 1980s, the organization considered combining the two hospitals when both needed to be renovated, but it decided to keep both open.

Shriners also considered closing down the Galveston facility after it was damaged by Hurricane Ike in 2008, but ultimately reopened it. In addition to burn victims, the Galveston hospital served patients with cleft lip and palate issues, but after 2008 the lip and palate treatment was moved to Houston.

The Galveston hospital, though near the University of Texas Medical Branch, is not a medical branch facility.

The medical branch and Shriners once had a research partnership, but medical branch officials suspended all human-subject research involving burn patients at both facilities after whistleblower complaints spurred an investigation into possible compliance issues around burn research at the hospitals.