Real Estate Market Overview Galveston-Texas City

Home , College of the Mainland, Dickens on the Strand, Galveston College, Moody Gardens, Port of Texas City, Rebecca Sealy Hospital

RealReal EstateEstate MarketMarket OverviewOverview Galveston-TexasGalveston-Texas CityCity

Jennifer S. Cowley Assistant Research Scientist

Texas A&M University

Contents

2 Population 5 Employment 7 Job Market 8 Major Industries Business Climate

10 Education 11 Transportation and Infrastructure Issues 12 Public Facilities Urban Growth Patterns Map 1. Growth Areas

13 Housing 16 Multifamily 17 Manufactured Housing 18 Seniors Housing Retail Market

19 Map 2. Commercial Building Permits 20 Map 3. Retail and Office Building Permits Office Market

21 Industrial Market Conclusion RealReal EstateEstate MarketMarket OverviewOverview Galveston-TexasGalveston-Texas CityCity Jennifer S. Cowley Assistant Research Scientist

Kemah FM 518 League City Friendswood FM 646

Dickinson

I 45 Texas City FM 1764 Santa Fe SH 6 La Marque

Hitchcock

SH 87

Galveston

Area Cities and Towns County Land Area of Galveston- Algoa Kemah Galveston Texas City MSA Bacliff La Marque 403.57 square miles Dickinson League City Friendswood Texas City Population Density (2000) Galveston Santa Fe Hitchcock Seabrook 620 people per square mile

he Galveston-Texas City MSA is County, for which Galveston is the dollar tourism industry. Less than 50 on the Gulf of Mexico about 45 county seat. Galveston Island’s beach square miles of the county (about 12 T miles south-southeast of Hous- stretches 32 miles and provides the percent) are located off the mainland. ton. The MSA consists of Galveston backdrop for the area’s multimillion-

1 POPULATION Kelly Air Force Base, San Antonio Galveston-Texas City MSA Population Year Population 1990 218,246 1991 222,881 1992 227,336 1993 231,932 1994 234,275 1995 236,990 1996 239,739 1997 242,310 1998 244,993 1999 248,469 2000 250,158

Source: U.S. Census Bureau

Area Cities with 10,000 or More Residents Growth 1990–2000 City 1998 Population (in percent)

Galveston 57,247 –4.0 League City 45,444 52.0 Texas City 41,521 1.7 Friendswood 29,037 27.3 Dickinson 17,093 13.6 La Marque 13,682 –2.4 Source: U.S. Census Bureau

he Galveston-Texas City MSA’s majority of area growth is a result of Texas Water Development Board ex- 1990–2000 population growth natural growth (births minus deaths). pects a 1.9 percent growth rate per year T rate was approximately 1.5 per- The area is expected to grow 14 per- through 2020. Slightly less than 70 percent per year. The area is growing at a cent between 2000 and 2010, accord- cent of the Galveston-Texas City MSA rate slightly slower than the state. The ing to the Texas State Data Center. The population lives on the mainland.

2 Texas Metropolitan Area Population Change, 1990–2000 (in percent)

McAllen-Edinburg-Mission 48.5 Galveston-Texas City 15.1 Austin-San Marcos 48.2 Tyler 15.5 Laredo 44.9 El Paso 14.9 Dallas 31.5 Corpus Christi 14.3 Brownsville-Harlingen-San Benito 28.9 Victoria 13.1 Brazoria County 26.1 Waco 12.9 Houston 25.8 Texarkana 9.4 Fort Worth-Arlington 25.1 Lubbock 9.0 Bryan-College Station 25.1 Wichita Falls 7.8 Texas 22.8 Longview-Marshall 7.7 Killeen-Temple 22.6 Beaumont-Port Arthur 6.6 San Antonio 20.2 Abilene 5.8 Sherman-Denison 16.4 San Angelo 5.6 Amarillo 16.2 Odessa-Midland 5.1

Source: U.S. Census Bureau

Galveston-Texas City MSA Projected Population

Texas State Texas Water Year Data Center Development Board

2005 263,970 — 2010 279,620 300,009 2015 292,110 — 2020 303,718 349,260

Sources: Texas State Data Center and Texas Water Development Board

Projected Population Growth, 2000–2020 (in percent)

40 30 40.2 20 24.3 10

Galveston-Texas City MSA Texas

Source: Texas State Data Center

3 Household Composition Galveston MSA Texas

Median household size (1990) 2.75 2.73 Population younger than 18 (1999, in percent) 27.1 28.5 Population 65 and older (1999, in percent) 11.0 10.1

Source: U.S. Census Bureau

Ethnic Distribution (in percent) Galveston County MSA Texas Ethnicity 1990 2000 1990 2000

White 66.2 63.1 60.8 52.4 Hispanic 14.2 18.0 25.3 32.0 Black 17.5 15.3 11.7 12.2 Asian 1.7 2.1 0.3 3.2 American Indian 0.4 0.4 1.8 0.3 Other 0.1 0.1 0.2 Two or more races* — 1.1 — 1.1

*For the 2000 Census, the Census Bureau changed the “race” options, allowing people to report their race as “other” or as two or more races. Source: U.S. Census Bureau

he 1999 per capita income for Hispanic population, following the the Galveston-Texas City MSA statewide trend for this ethnic group. T was $25,296. The state average The average age of the population is was $26,834. The area has a growing slightly older than that for the state.

4 EMPLOYMENT

Galveston-Texas City MSA Employment

120,000 118,000 116,000 114,000 112,000 110,000 108,000 106,000 104,000 102,000 100,000 98,000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Source: U.S. Bureau of Labor Statistics

Galveston-Texas City MSA Unemployment Rate (in percent)

14 12 10 8 6 4 2 0 May May May May May May May Sept Sept Sept Sept Sept Sept January-95 January-96 January-97 January-98 January-99 January-00 January-01

Galveston Texas City League City

Source: U.S. Bureau of Labor Statistics

5 Top Ten Employers, Galveston Island Top Ten Private Employers, Mainland

University of Texas Medical Branch United Space Alliance Education Bergstrom Air Force Base,Aerospace Austin 12,765 employees 4,000 employees Clear Creek Independent School District NASA/Johnson Space Center Education Aerospace 3,356 employees 3,000 employees American National Insurance Company Lockheed Martin Engineering & Sciences Insurance Aerospace 1,612 employees 2,650 employees Galveston Independent School District BP-Amoco Texas City Refining Education Petrochemical 1,405 employees 2,100 employees Galveston County The Boeing Company Government Aerospace 1,200 employees 2,000 employees Moody Gardens Columbia/Clear Lake Regional Medical Center Hospitality Medical care 1,077 employees 1,268 employees City of Galveston Union Carbide Corp/DOW Chemical Government Petrochemical 755 employees 1,100 employees Landry’s Seafood Restaurants Memorial Hospital Southeast Restaurant Medical care 560 employees 1,050 employees Fertitta Hospitality Gulf Greyhound Park Hospitality Dog Racing 535 employees 890 employees First Wave - Newpark SPACEHAB Ship and rig building Engineering 450 employees 718 employees

Sources: Galveston and Texas City-LaMarque Chambers of Commerce, 2001

Employment Growth by Industry Galveston-Texas City MSA Texas

Employment growth, 2000 (in percent) –0.7 3.2 Unemployment rate (in percent) 5.9 4.2 New jobs in 2000 –600 288,900 Employment growth by sector (in percent) Services 0.0 4.7 Trade 1.0 3.1 Manufacturing –2.4 0.1 Mining 0.0 2.3 Finance, insurance and real estate –11.5 1.3 Construction –2.3 6.2 Government 0.8 1.7 Transportation, communications and public utilities 2.8 5.1

Sources: U.S. Bureau of Labor Statistics and Texas Workforce Commission

6 Texas Metropolitan Area Employment Change, 1990–2000 (in percent)

Austin-San Marcos 58.8 El Paso 15.4 Laredo 40.3 Waco 14.3 McAllen-Edinburg-Mission 35.8 Lubbock 14.0 Dallas 30.4 Sherman-Denison 12.5 Brownsville-Harlingen-San Benito 30.1 Longview-Marshall 12.2 Bryan-College Station 29.2 Abilene 11.4 Killeen-Temple 28.7 San Angelo 10.7 San Antonio 28.6 Corpus Christi 10.3 Fort Worth-Arlington 23.7 Galveston-Texas City 8.2 Texas 23.3 Wichita Falls 7.8 Tyler 22.9 Odessa-Midland 6.5 Victoria 22.4 Texarkana 4.5 Houston 22.1 Beaumont-Port Arthur 3.5 Amarillo 18.6 Brazoria County 2.3

Source: U.S. Bureau of Labor Statistics, February 2001

odest employment growth Education, government and health The MSA’s largest employers are has occurred in the MSA care are the major employers on aerospace and petrochemical compa- Msince 1990. Declines in con- Galveston Island; on the mainland, nies. The area’s economy is relatively struction, manufacturing and finance, aerospace, chemical and petrochemi- diversified. Texas City employment is insurance and real estate employment cal processing are the major employ- mostly industrial, based primarily on resulted in a decline in nonagricultural ers. Galveston and Texas City had simi- several large petrochemical and refin- employment in the MSA during 2000, lar unemployment rates, 7 and 6.3 ery operations. Major Galveston em- according to the Texas Workforce percent, respectively, for January 2001. ployment sectors are tourism, educa- Commission. The U.S. Bureau of Labor League City had a significantly lower tion, health care and ship repair. Statistics showed total civilian employ- rate of 2.4 percent for January 2001. ment in the MSA to be 114,039 for 2000, up 21 jobs from 1999.

JOB MARKET

alveston is a major vacation week to the island, boosting jobs in the doring Services of America and Ameri- destination, with more than retail and service sectors. Royal Carib- cana Ships will employ 1,200 when G 4,000 hotel rooms and condo- bean will begin offering cruises from construction is completed in 2004. miniums and numerous tourist attrac- the Port of Galveston starting in 2001. In League City, Apache Telecom tions. The city’s hospitality industry In Galveston, First Wave Newpark merged with Hi-Tech Communications generates more than $350 million an- Shipbuilding expanded its shipbuilding at the end of 2000. Apache added 40 nually and is responsible for a growing operation, adding 80 employees in employees in the deal. number of jobs. 2000. In Dickinson, Traffic Systems In Galveston, UTMB Health Care In fall 2000, Carnival Cruise Lines Construction expanded, adding ten jobs. Systems cut 150 jobs in July 2001. began making a regular weekly stop in In Texas City, a 400-acre container Galveston, bringing 1,700 tourists per terminal is under construction. Steve-

7 MAJOR INDUSTRIES

overnment, trade, services and care, business services and hotels and share of manufacturing jobs. Manufac- manufacturing are the main amusement services. Tourism and rec- turing employment lost 200 jobs in Gsectors of the MSA’s economy. reation draw millions of visitors to 2000. The transportation industry plays Galveston-Texas City has the highest Galveston County each year. The ser- a critical role in the area; large ports in percentage of government employees vices sector lost 100 jobs in 2000. Con- Galveston and Texas City serve ship- in the state because the largest employ- struction employment lost 100 jobs ping enterprises and international ers are a public medical school and the during 2000. trade. Transportation, communications area’s port. The government sector Refineries and petrochemical plants and public utilities added 100 jobs in added 200 jobs during 2000; the trade in Texas City account for the largest 2000. sector added 200. The bulk of the area’s services sector employment is centered around health

BUSINESS CLIMATE

Tax Rates, 2000 Tax Rate per Tax Rate per Taxing Entity $100 Valuation Taxing Entity $100 Valuation

City of Galveston $0.55 City of Texas City $0.33 Galveston Independent School District 1.52 Texas City Independent School District 1.61 Galveston College 0.20 College of the Mainland 0.22 Galveston County 0.53 Galveston County 0.53 Total $2.80 Total $2.69

Source: Galveston County Appraisal District

8 Galveston-Texas City MSA Retail Sales

Year Total Sales Sales per Capita

1990 $1,229,544,903 $5,631 1991 1,277,300,377 5,731 1992 1,423,360,696 6,261 1993 1,466,265,671 6,322 1994 1,556,752,519 6,645 1995 1,624,698,723 6,856 1996 1,677,288,487 6,996 1997 1,719,989,433 7,078 1998 1,781,892,642 7,273 1999 1,968,835,757 7,924 2000 2,160,379,552 8,636 State Average 2000 $12,612

Source: Texas Comptroller’s Office

alveston’s seven million visi- The Galveston Economic Develop- Recently, leaders from the ports in tors per year significantly influ- ment Partnership was created to ex- Galveston, Texas City and Houston Gence the MSA’s retail sales. pand Galveston Island’s employment discussed the possibility of consolidat- Mardi Gras, held on the Strand in and tax base. The Texas City and La ing their resources. Combining the Galveston, attracts the largest number Marque area also has established an Galveston and Houston ports could of visitors each year — an estimated economic development committee bring more jobs to Galveston. More 500,000. with industrial development and tour- than 850 acres designated as a foreign The hotel-motel tax in Galveston and ism as its focus. The Gulf Coast Eco- trade zone are available for develop- Texas City is 13 percent; in League nomic Development District, part of ment; more than 800 acres are adja- City, the rate is 12 percent. The sales the overall economic development cent to the Pelican Island Terminal and tax rate for the area varies from 7.75 program, was established in 1988 to the Port of Galveston. percent to 8.25 percent. Galveston and create jobs and increase the tax base of Texas City have sales tax rates of 8.25 the 13-county upper Texas Gulf Coast percent. Area.

9 EDUCATION

Educational Level, Persons Age 25 and Older (in percent) Level of Education Galveston County Texas

High school graduate 27.8 25.6 Some college, no degree 22.4 21.1 Associate’s degree 6.3 5.2 Bachelor’s degree 12.3 13.9 Graduate or professional degree 6.0 6.5

Source: U.S. Census Bureau, 1990

Local College and University Enrollment

Fall 2005 2010 School 2000 (estimated) (estimated)

College of the Mainland 3,175 3,375 3,536 Galveston College 2,255 2,399 2,543 University of Texas Medical Branch 2,505 n/a n/a Texas A&M University at Galveston 1,363 1,504 1,547

Sources: Educational institutions and the Texas Higher Education Coordinating Board, January 2001

he Galveston-Texas City area to TAMU at Galveston to expand and and is expected to be completed within has four colleges and universities: upgrade its ship simulator for use by three years. T College of the Mainland, Gal- cadets enrolled in the Texas Maritime UTMB, the oldest medical school in veston College, University of Texas Academy. The upgrades were com- the state, is planning a new $5 million Medical Branch (UTMB) and Texas pleted in January 2001. laboratory building; no construction A&M University at Galveston. The Col- In December 2000, the Texas A&M date has been set. The Keiller Building lege of the Mainland and Galveston University System Board of Regents ap- Laboratory will be expanded in 2001. College are two-year community proved a $2 million loan to purchase A $7 million renovation is planned at colleges. the Offatts Bayou campus in the Rebecca Sealy Hospital, but no Texas A&M University at Galveston Galveston. The sailing program and the construction date has been set. is a part of Texas A&M’s College of Center for Marine Training and Safety The Galveston Independent School Geosciences. Degrees are granted are on this campus. Two master's de- District is considering a bond issue for through Texas A&M. Texas A&M at grees and a doctor of philosophy in 17 projects costing more than $50 mil- Galveston was ranked the number two marine biology will be offered. A ma- lion. Only a portion of the projects are public liberal arts college in the West rine resources management master's expected to go up for a vote. for 1999 by U.S. News & World Re- degree will be offered in fall 2001, and The Santa Fe Independent School port. The Texas Higher Education Co- a maritime administration and logistics District has a proposal to build a new ordinating Board projects enrollment at master's degree in 2002. field house and a 900-seat auditorium Texas A&M at Galveston to remain A $250,000 Wetlands Study Center at the high school. The high school stable through 2010. Houston Endow- is being built on the Galveston campus opened in August 2000. ment, Inc., awarded a $250,000 grant

10 TRANSPORTATION AND INFRASTRUCTURE ISSUES

Galveston Port Activity 1997 1998 1999 2000

Total calls 702 980 1,194 927 Total tonnage (000) 6,080,568 6,113,772 8,194,824 6,899,059

Sources: Port of Galveston and Texas City

he Galveston-Texas City MSA is compared with 6.9 million in 2000. improvements that encourage job cre- served by I-45, which provides The main reason for the decline in ation and diversification of the local T access to the Houston area. cargo was a drop in bulk grain from 5.6 tax base. The economic development Burlington Northern, Galveston Rail- million short tons in 1999 to 4.3 mil- administration has a public works grant way, Santa Fe, Southern Pacific and lion in 2000. In 1999, the port had a program to facilitate utility improve- Union Pacific have daily schedules, 1,333 percent increase in incoming ments and expansion, roads, streets, each with one rail terminal. bulk cement shipments. In 2000, bulk bridges and other physical infrastruc- Scholes Field Airport in Galveston cement shipments were similar to ture barriers to business development. has two 6,000-foot, 150-foot-wide run- 1999; however, cotton bales increased Galveston officials plan improvements ways. The airport underwent $3.5 mil- dramatically from 1,158 short tons in over the next six years, with $160 million in runway and taxiway improve- 1999 to 82,178 in 2000. lion in construction on new roadways ments in 2000. A private developer The Port of Texas City is the largest and modifications to existing streets. added 25,000 square feet of hangar private petrochemical port in the The City of Houston provides water space. United States. The port is the eighth to most area cities. The City of Houston Hobby and George Bush In- largest in the country, and according to Galveston obtains water from the City tercontinental Airport both provide air the U.S. Census Bureau, the Port of of Houston and the Galveston County service to destinations throughout the Texas City was the ninth busiest port by Water Authority. The water source is United States and abroad. George Bush volume of foreign trade in 1997. the Gulf Coast Aquifer, according to Intercontinental is in north Houston The Port of Houston is ranked first in the Texas Water Development Board. near the Sam Houston Tollway; Hous- the United States for foreign tonnage Surface water sources will be used ton Hobby is in southeast Houston and second in total tonnage, handling more heavily in the future because land near I-45. Southwest, Airtran, Ameri- 169 million short tons in 1999. Top subsidence has resulted from aquifer can Continental, Delta and Northwest products exported included petroleum withdrawals. Airlines offer service to Houston Hobby. and petroleum products, organic Approximately 15 miles of the 170- Galveston Island is recognized as the chemicals, cereals, plastics and animal mile Grand Parkway, a proposed loop ideal base of operations for offshore and vegetable fats and oils. The top im- around the Greater Houston area, will gas and oil support. The Port of ported products include petroleum and run through Galveston County. The Galveston provides the main source of petroleum products, iron and steel, Grand Parkway Association is working water transportation, with a channel crude fertilizers and minerals, organic to convince local government entities width of 1,200 feet, a depth of 40 feet chemicals and sugars. to donate rights-of-way for the project, and a docking capacity of 29 ships. The Houston-Galveston Area while the state pays for construction. The port boasts a modern container ter- Council’s economic development staff Galveston County has begun the plan- minal, vast warehousing space and has prepared infrastructure financing ning process for its Grand Parkway four railroad companies. programs to assist local municipalities section. The Port of Galveston handled 8.19 with grants or loans for infrastructure million short tons of cargo in 1999,

11 PUBLIC FACILITIES

new $28 million convention public transportation hub. The terminal along Clear Creek. The second phase center is planned in Galveston, is part of the city’s plans to spruce up will include 1,500 homes. A but no construction date has downtown. League City is planning a $6 million been set. The project will be built adja- Galveston County plans to start con- community center and natatorium. cent to the San Luis Resort. In January struction in 2001 on a new $93.6 mil- La Marque has plans for a $24 mil- 2001, voters approved funding the lion justice center. The 1,200 bed facil- lion sports arena. The arena would seat project through an increase in the ho- ity will be completed by 2004. 5,000 to 6,500 and could accommo- tel-motel tax. Plans are under way for the League date hockey, basketball, indoor soccer In May 2001, an $18 million bond City River Market. The $700 million and arena football. The city is trying to package was passed with $5 million for project would include entertainment, determine how to fund the project. park improvements and $13.5 million dining, offices, hotels and cultural ar- In Dickinson, construction of a po- for street and traffic improvements. eas. The five-mile waterfront will in- lice station began in June 2000. The The City of Galveston and the clude I-45, Highway 3 and FM 270. $1.6 million project is at Liggio and Galveston Historical Foundation want Phase two is a mixed-use development Church streets. to turn part of the Panama Hotel into a

URBAN GROWTH PATTERNS

Multifamily

Single Family

Single Family Multifamily

I 45 SH 87 Map 1. Growth Areas Galveston, Texas Single Family Census Place Commercial Water Area County (High Res) Interstate Highway Highway Source: Real Estate Center at Texas A&M University Multifamily

ap 1 shows the major growth multifamily activity has been occurring family developments have occurred corridors within the Galveston- in the same area and in the island’s far- near the Texas City Mall. League City, MTexas City MSA. For Galveston, western portion. near Clear Lake, has recorded growth most of the single-family residential ac- Retail activity in Galveston has been in the retail, office and housing sectors. tivity has been taking place in the east- occurring along Seawall Boulevard and central portion of the island, while on Broadway. Some retail and single-

12 HOUSING

Housing Affordability – First Quarter 2001

Percent of Households THAI for That Can Afford First-time Median-priced Home THAI* Homebuyers

Galveston-Texas City MSA 43 0.85 0.66

*The THAI is the ratio of median household income to the income required to buy the median-priced home using currently available mortgage financing. Standard financing is a 30-year loan covering 80 percent of the cost of the home. A THAI of 1.00 indicates that the median household income is just enough to qualify for a loan sufficient to purchase the median-priced home. Source: Real Estate Center at Texas A&M University

Galveston-Texas City MSA Single-family Permits (in units)

2,500

2,000

1,500

1,000

500

0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Source: U.S. Census Bureau

13 Average Sales Price of Single-family Home, Galveston Area $140,000

$120,000

$100,000

$80,000

$60,000

$40,000

$20,000

$0 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999

Source: Real Estate Center at Texas A&M University

Single-family Home Sales Volume, Galveston Area

120 100 80 60 40 20 0 May July April June March August October January February November December September 1998 1999 2000

Source: Real Estate Center at Texas A&M University

14 Price Distribution of MLS Homes Sold (in percent)

Price Range 1997 1998 1999 2000

Less than $60,000 38.3 30.8 27.6 24.4 60,000 – 79,999 16.2 16.6 18.5 12.3 80,000 – 99,999 10.8 12.2 12.3 13.4 100,000 – 119,999 9.2 6.6 7.4 7.9 120,000 – 139,999 5.5 6.1 8.0 8.8 140,000 – 159,999 3.1 4.9 4.2 5.2 160,000 – 179,999 3.1 4.9 3.4 4.5 180,000 – 199,999 2.8 3.1 3.1 4.4 200,000 – 249,999 4.9 6.8 6.2 8.3 250,000 – 299,999 3.1 4.7 4.4 4.9 300,000 or more 3.0 3.1 4.7 5.9

Source: Real Estate Center at Texas A&M University

Galveston Lots Platted Number of Subdivision Location Lots Created

Avenue N½ and 73rd Street 40 Avenue F, Avenue H, 31st Street and 32nd Street 32 I-45 east of Palm Cove Townhomes 8 San Luis Pass 5 Galleon 5 Millies Road 3 Heards Lane 3

Source: City of Galveston Department of Community Development

n 2000, 2,219 single-family build- from $70,000 to $80,000. Barton are priced from $50,000 to $149,500. ing permits were issued, compared Square is a 40 home subdivision at 73rd The Landings is a planned 37-home Iwith 1,627 in 1999. The average Street and Avenue N½. Homes will be subdivision between Stewart Road and price for new homes in 2000 was priced less than $125,000. A new de- FM 3005. $137,500, while the average price in velopment project with more than 100 The Galveston Housing Authority is 1999 was $133,400. lots surrounding a golf course opened building 23 homes in Galveston Vil- Homes reported sold through the in 2000 in Pirate’s Beach. Lafitte’s lages that will be sold to low-to-moder- Galveston Multiple Listing Service Cove is a 14-home planned subdivi- ate income families for $40,000 each. (MLS) rose from 842 in 1999 to 864 in sion in Pirate’s Beach. The homes will Construction on the project began in 2000. During 2000, there was a 7.2- be custom built with prices starting at 2000. The Housing Authority is con- month inventory of homes for sale. The $300,000. structing phase two of Island Cottages, average price rose 12.4 percent to Another beach community develop- with nine lots. $130,200 in 2000. ment will be located six miles east of In Texas City, Todd and Sherman In Galveston, Majestic Homebuilders San Luis Pass. The project, Sandhill Land Development plans to build 600 plans to build 200 homes north of Shores, will have lots with 100 feet of to 700 new homes near the mall. The Broadway. The homes will be priced frontage on the Gulf of Mexico. Lots project will be part of a municipal util-

15 ity district. Homes will be priced from homes priced from $160,000 to 670 lots with homes priced from $90,000 to $125,000. $400,000. The subdivision will also in- $150,000 to more than $1 million. In League City, a number of new de- clude a 36-hole Scottish links golf East of Highway 3 are two planned velopments are planned or under con- course. Construction began in summer residential developments. Lakes of struction. Fifteen hundred homes are 2000. Westover Park has 1,348 lots Southshore Harbour will have 1,000 planned in the second phase of the with homes priced from $140,000 to lots priced from $160,000 to River Market project. Five new devel- $250,000. $350,000. Construction began in sum- opments are planned west of I-45. Ce- In the I-45 and Highway 3 area, four mer 2000. Pelican Ridge is a 600-acre dar Landing is a 375-lot development developments are planned. Wilshire planned development. with homes priced from $130,000 to Place is a 64-lot development with In Hitchcock a new subdivision has $200,000. Clear Creek Meadows has homes priced from $140,000 to been approved on the city’s west side. 120 lots with homes priced from $200,000. Center Point is a 390-lot de- Also in Hitchcock, Flamingo Isle, $165,000 to $275,000. Heritage Lakes velopment with homes priced from abandoned more than 20 years ago, is is an 85-lot development with homes $150,000 to $300,000. Leisure Lakes the site of new development. When priced from $160,000 to $240,000. will have 267 lots. Saddle Creek, a part completed, the project will have 539 Magnolia Creek has 1,200 lots with of the Victory Lakes project, with have homes and a 350-slip marina.

MULTIFAMILY

Galveston-Texas City MSA Multifamily Building Permits (in units)

3,000

2,500

2,000

1,500

1,000

500

0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Source: U.S. Census Bureau

16 Galveston Apartment Statistics, February 2001

Galveston Texas Metro Average

Average rent per square foot $0.77 $0.75 Average rent for units built since 1990 $0.94 $0.97 Average occupancy (in percent) 93.9 95.7 Average occupancy for units built since 1990 (in percent) 93.5 95.6

Source: Apartment MarketData Research

n 2000, permits for 526 multifamily converted to rental lofts. The 11-story In Texas City, HRA Village is plan- units were issued, compared with Medical Arts Building will be con- ning a second phase. The apartment I480 in 1999. For the first five verted to residential lofts on the upper complex is for disabled adults. In Texas months of 2001, 12 multifamily units floors with commercial space on the City, a 250-unit apartment complex is were permitted. Rents rose one cent ground floor. planned at Highway 3 and Emmett F. per square foot between January 2000 Four 20-story condominium towers Lowry Freeway. It is the first new apart- and February 2001; occupancy is up are planned at the East Beach. There ment complex in the city in more than 1.1 percentage points. Occupancy rose will be 97 units. Groundbreaking is ex- a decade. 2.1 percentage points in newer units. pected in the first quarter of 2002, with League City is the site of four new On Pelican Island, the first phase of a completion a year later. apartment projects. Victory Lakes will 140-unit apartment complex was com- The Galveston Housing Authority is have between 400 and 600 units. Peli- pleted in December 2000. The $7.5 applying for a grant that would allow a can Ridge has plans for 600 to 800 million project is a block away from new Palm Terrace apartment complex units. The Meadows at South Shore Texas A&M University at Galveston. to be built between 41st and 47th Harbour is a planned 500-unit apart- In Galveston, the Hendley Building streets. The cost to rehabilitate the ex- ment complex. The apartments at Bay was converted into eight rental lofts isting Palm Terrace would be higher Colony, west of I-45, has 248 units. and the Anaco Building into 87 apart- than that to build this new complex. ments. The E.X. Levy Building will be

MANUFACTURED HOUSING

Galveston-Texas City MSA Manufactured Home Sales Proportion of New Manufactured Single-family Homes Homes Sold (in percent)

1996 216 14.1 1997 196 15.0 1998 249 12.9 1999 235 12.8 2000* 177 9.4

*Through third quarter 2000 Source: Texas Manufactured Housing Association

anufactured housing repre- homes, largely because of the wind-re- sents a modest portion of the sistance requirements for manufac- Marea’s new single-family tured homes along the Gulf of Mexico.

17 SENIORS HOUSING

n 2000, the Jean Lafitte Hotel in downtown Galveston was con- I verted to seniors apartments and an assisted-living center with a restaurant and fitness center.

RETAIL MARKET

Largest Area Attractions Location Type of Attraction

Moody Gardens Galveston Rainforest pyramid, Imax theater, museum, beach, aquarium Gulf Greyhound Park La Marque Greyhound racing The Grand 1894 Opera House Galveston Performing arts theater Galveston County Historical Museum Galveston History museum Dickens on the Strand Galveston Holiday festival

Sources: Galveston and Texas City-La Marque Chambers of Commerce

Hotel Occupancy and Rental Rates

1999 2000* Galveston- Galveston- Texas City MSA Texas Texas City MSA Texas

Occupancy rate (in percent) 56.4 63.7 62.7 67.2 Average daily rental rate $98.67 $85.11 $97.20 $86.75

*Through November 2000 Source: PKF Consulting

ap 2 shows commercial Galveston has more than 4,000 hotel Beach. The hotel would also include a building permits on Galves- rooms. Hampton Inn & Suites built a golf course. The San Luis Resort is un- M ton Island, and Map 3 shows 120-room hotel in 2000. The seven- dergoing an $8 million renovation. permits in Texas City for 2000. Restau- story hotel is located near the Strand. A By 2005, an additional 100 rooms rant sales are expected to increase 10.8 three-story, 63-room Holiday Inn Ex- will be added to the existing Hilton Ho- percent during 2001 to $445 million, press Hotel & Suites was completed in tel on Seawall Boulevard in response to according to the Texas Restaurant As- 2000 along Seawall Boulevard. A 500- the convention center construction. In sociation. room hotel has been proposed on East Clear Lake Shores, a hotel is planned

18 on FM 204 at the border between Clear new water park entertainment center, In League City, a 20,000-square-foot Lake Shores and Kemah. The six-story, in La Marque. shopping center is under construction 90-room hotel is located near the In Clear Lake Shores, Target and at FM 2094 and Constellation Drive. Kemah Boardwalk. The hotel, expected Home Depot broke ground in August Baybrook Mall in Clear Lake has 1.1 to be a Comfort Suites, broke ground in 2000 on Hanson Street. Tinseltown million square feet of space. The mall April 2001. USA is under construction at I-45 at has the second highest sales per square In fall 2000, Carnival Cruise Lines NASA 1. Albertson’s had a store under foot of the greater Houston area’s 21 began offering four- and five-day west- construction in 2000 at FM 528 and malls. New retailers include Ann Tay- ern Caribbean cruises departing from Bay Area Boulevard. A Kroger Signa- lor, Warner Bros. Studio Store, Talbots, Galveston. ture store is under construction on El Williams-Sonoma and the Knowledge The Galvez Mall on I-45 has been Camino, as is a National Drug Store. A Store. demolished. In its place, a 320,000- 24 Hour Fitness center was completed In Kemah, a Super Wal-Mart is square-foot shopping center will be in 2000 on FM 528. planned as part of the Kemah Market built. New stores are expected to open Bank One opened at FM 528 and Place. In Hitchcock, Grand Sport in late 2002. Lowe’s Home Improve- Bay Area Boulevard. Dollar General Speedway is a planned $5 million race ment Warehouse is planning to locate completed a store in Nassau Bay. track. on the site. Eckerds opened at FM 518 and Bay In Texas City, McCoy’s Building Sup- A new $3 million Kroger Signature Area Boulevard. Forshey Piano opened ply Center closed in January 2001. store opened in September 2000. New on Clear Lake City Boulevard. Albertson’s on Palmer Highway in retail development is occurring on Jack In The Box constructed a new Texas City closed in 2000. Harborside at 73rd and 75th streets. restaurant at Highway 3 near Ellington In Galveston, Arlan’s Market closed Randall’s is building a $3.5 million Field. Other new restaurants opened in in fall 2000 at 69th Street. Weiner’s store on 61st Street. the Clear Lake area in 2000 include closed its Broadway store in fall 2000. In September 2000, Schlitterbahn of Ichibon’s, Tequila Willie’s, Crawdaddy’s New Braunfels opened Incredapark, a Bayou Grill, Misa Tortillas and Hot Wok.

I 45 SH 87

Map 2. Commercial Building Permits, 2000 Galveston, Texas Census Place Water Area Interstate Highway Highway Commercial Source: Galveston Building Permit Office

Map 3. Retail and Office Building Permits, 2000 Texas City, Texas Census Place Water Area Highway Interstate Highway Retail Office Source: Texas City Building Permit Office

OFFICE MARKET

Office Property Market Clear Lake, 2000

Class A Class B Class C

Occupancy rate (in percent) 93.7 95.3 78.5 Square Feet Available 466,382 162,855 327,659 Average rental rate $17.88 $14.73 $11.44

Source: Trione and Gordon

he League City area is experienc- $17.88 per square foot for Class A of- space. The first building, with two sto- ing more office development be fice space in mid-2000, according to ries and 84,000 square feet, broke T cause of the build-out in the Trione and Gordon. ground in March 2000. The first three Clear Lake development. The Clear Victory Ranch will contain one mil- buildings will total 288,000 square Lake area had an average rent of lion square feet of high-tech office

20 feet. The park will eventually have 16 opened on Royal Crest in February Uniplex Office Park opened in Feb- low-rise buildings in a campus setting. 2000. HealthSouth Diagnostic Center ruary 2000 on Friendswood Drive. A A five story, 120,000-square-foot of- opened in February 2000 on Medical real estate office opened in March fice building is planned on South Shore Center Boulevard. River Oaks Imaging 2000 on Friendswood Drive. A law of- Harbour Boulevard. and Diagnostic opened in February on fice is under construction on Friends- In Clear Lake, several office projects El Camino. Deke Slayton Cancer Cen- wood Drive. Another law office is un- opened in 2000. UTMB LASIK Eye ter opened on Medical Center Boule- der construction on Parkwood Drive. Center opened in January 2000 on vard in March 2000. Nassau Bay. Clear Lake Dental Group

INDUSTRIAL MARKET

he Texas Cruise Ship Terminal Texas City signed long-term leases at International Distribution Corpora- recently underwent a $10 million its Shoal Point property with Stevedor- tion is planning a 315,000-square-foot T renovation. Carnival Cruise ing Services of America and Americana chemical storage warehouse on Lines began sailing from the facility in Ships. The companies are spending Baypark in La Porte. Other new indus- September 2000. Royal Caribbean In- $300 million building a 400-acre con- trial development may occur on Peli- ternational will begin calls into tainer terminal on the island. Final con- can Island. Galveston in 2001. struction is scheduled for 2004.

CONCLUSION

he petrochemical processing and should boost tourism. The City of Victory Ranch will bring new office services sectors dominate the Kemah’s waterfront revitalizion is spur- construction into the area. Residential T private-sector economic land- ring other area cities to create master real estate should remain steady with scape of Galveston County. The ser- plans for waterfront development to new home construction in the Galves- vices industry continues to grow, with strengthen their local economies. ton, Texas City and League City areas. tourism playing an important role. Mil- Industrial development remains the Houston’s suburban development is lions of visitors come to the area year- area’s top priority, with petrochemicals continuing to encroach on the north- round for various events and the recre- continuing to be the major base of the west portion of Galveston County, ational atmosphere of the beaches and sector. Population and employment which will strengthen economic links waterfront. The recent addition of the continue to grow at modest rates. between the two areas. Moody Aquarium, restored waterfronts and the addition of the cruise line

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