The planned retirement this year of the judge overseeing the Porretto Beach bankruptcy could lead to more delays in the potential sale of a rare private beach that has dragged on for years, those involved with the case say.
It’s been almost a year since the city council voted to sell its easements at Porretto Beach, which would pave the way for the sale, but the company that aims to buy the property still has several steps before it’s ready to close on the reported $6 million deal.
The council unanimously agreed to a $1.28 million sale price, but voted earlier in the year to abandon the easements in split decision.
Those involved in the process hope the buyer will have secured all the necessary regulatory approvals and permits to bring the case back before Judge Jeff Bohm this summer, before he retires later this year, said Stephen Schulz, a Galveston attorney representing the bankruptcy trustee.
Approval from the judge is necessary to move to closing, Schulz said.
Bohm declined to comment about the Porretto Beach case but confirmed he plans to retire this year.
When Bohm retires, all his cases will be reassigned, said Randy Williams, the trustee representing property owner Sonya Porretto’s Chapter 7 bankruptcy estate. Because Bohm knows the history of the case and has been working on it since 2009, Williams would rather Bohm saw the case to its end, he said.
“That’s going to make things more difficult because you’ll have to be explaining now 10 years of history of this case,” Williams said.
Selling the 9.75 acres of beach between Sixth and 10th streets — dubbed Porretto Beach Classic — has been a hot topic of discussion since 2009 when the bankruptcy case began, opening up potential development of the beach.
Porretto Beach had long been an unusual piece of property and subject of two decades of disputes between owners and Texas General Land Office, which oversees public beaches.
In July 2015, the Texas Supreme Court ruled the land office didn’t own the property, making it more attractive to potential buyers. Most of Galveston’s beaches are owned by the state and managed by the Park Board of Trustees.
The potential buyer, 4M Investments LLC, has proposed a retail and restaurant boardwalk concept.
The process to sell the property has been slow, Williams said.
“We’re still waiting for the buyer to get some approvals that they need,” Williams said.
The prospective buyer was able to move ahead with plans after the city council in July last year unanimously voted to sell its rights of way running through the property for $1.28 million. Abandoning those rights of way would be necessary for major development, but met with criticism from some residents who hoped to thwart a boardwalk development and from those who opposed the sale of the easements and the manner in which the value was assigned.
That transaction has a deadline of next summer, District 2 Councilman Craig Brown said.
Ted Miller, president of the 4M Investments, didn’t respond to requests for comment.
Brown doesn’t know when the company might close the deal but thinks there’s progress being made, he said.
“It is moving along,” Brown said.
But the company will need to get approval from the Army Corps of Engineers and Texas General Land Office, among other entities, Schulz said.
“They say that they are progressing as rapidly as they can, given the fact that you have multiple jurisdictions with some kind of say in the process,” Schulz said.
But Williams isn’t sure how much longer it will take the buyer to collect all the necessary approvals, he said.
“I’m fairly jaded,” Williams said. “I’ve been being told progress was being made, and we were close to getting some place literally for years. We’re still not there.”
It’s not very often buyers have a chance to purchase a private beach — at least not in Texas, where public access for the most part is protected by law.
The Porretto family has owned the beach since the 1950s. Sonya Porretto in 2009 filed for Chapter 11 bankruptcy, which allows companies to reorganize. Two years later, a judge ordered her case be changed to Chapter 7, so that her assets, including the beach land, could be liquidated and the proceeds used to pay creditors.