Background and Long-Term Plan for Pier 19-22 Purchase

11/17/2011Mitchell Historic Properties
On behalf of Chief Executive Officer George Mitchell, Mitchell Historic Properties (MHP) has expressed interest to the City of Galveston on purchasing the Pier 19 Chanel front, piers and 20 through 22 to continue future development. MHP staff spoke at a City Council workshop on Nov. 14, 2011 on this issue. MHP currently has a long-term lease with the Port of Galveston which expires in 2065. George Mitchell began developing Piers 20 – 21 in the early 1990s and has invested over $12 million in this area. If the purchase is approved by voters, Mitchell has a future vision to invest another $25 million in additions and improvements toward the proposed visionary plan.  
 
Background History/Cruise Ship Support
One of the earliest proponents of an effort to attract cruise ships to Galveston, George Mitchell spearheaded and underwrote numerous initiatives  
  • A Galveston delegation to attend Sea Trade shows in Miami, which set the stage for a business relationship with Carnival Cruise Lines
  • Sponsored numerous receptions and business to business outreach to the cruise ship industry leadership
  • Initiated the rebuilding of the Mallory Building floor (Cruise ship terminal)
  • Raised $250,000 to support the advertising budget Carnival Cruises required to finalize the agreement with the Port. Mitchell contributed $100,000, with additional support of $50,000 each from the Park Board, Fertitta and Moody Interests 
 
Purchase of Piers 19-22
The Mitchell purchase of 16 acres of land between Piers 19-22, would include: 
  • Pier 19 purchase (which is now all submerged) includes the area to the north of existing Shrimpers wooden dock/Mosquito Fleet from the east end of Pier 21 to Offshore Rig Museum
  • Additionally, part of the purchase should include south of Del Monte next to the Mitchell Warehouse for additional parking to the Port owned parking lot.
 
Future Plans
All future plans will maintain the Port’s infrastructure as is, including the Port’s use of Lay Berthing, railroad operations and street ROW. In addition to the $12 million already invested by Mitchell in the development, $25 million will be committed to the proposed plan, including these additions and improvements. Mitchell is not interested in purchasing any part of Pier 19 which includes the Mosquito Fleet, charter fishing boats, retail fish and fresh seafood outlet or Joe’s Crab Shack.
Potential plans could include:  
  • Construction of a Boardwalk and two Marinas (50-55 slips) from Pier 19 to Pier 22. Pier 21 will remain available for continued approved use by the Port
  • Construction of Parking Garages with retail liner buildings and condominiums over existing parking lots  
  • Expand the Harbor House to include 60-80  more rooms and a swimming pool
  • Add at least 2 more major restaurants
Security
There will be no change to existing security. 
  • The Port will continue to patrol the Pier
  • Road and rail ROW will maintain the same free access as before
  • Piers 19-22 will remain accessible to the public as designated by Homeland Security.
Economic Impact of Development
The current development plan has only positive economic effects 
  • There will be no negative effect on existing or future ILA jobs
  • Pier 19 tenants, including the shrimpers, charter fishing boats, retail fish and fresh seafood outlets, and Joe’s Crab Shack will not be negatively impacted. In fact, the development will most likely create more business for retailers such as Joe’s
  • Port and City will receive a cash payment
  • More jobs will be created
  • The development will have a positive impact on the Downtown Strand Seaport area
  • The Port will consider designing a new way to have the Cruise Ship Terminal’s entry access off of Harborside at 23rd Street 
Current Financial Plan
In the present operation, Mitchell Historic Properties breaks even or loses money. The company pays 2.5% of gross revenue receipts from all Pier 21 income to the Port, which amounts to approximately $300,000 each year.
 
Potential Barriers to the Success of the Development Plan 
  • The in-progress new port garage from the TIGER 111 Federal Grant is under the present lease and would require a joint venture between the Port and Mitchell
  • City and Port have to agree to the plan
  • The Port and Mitchell will have to agree upon the boundary of land to be purchased
  • Port Bond holders have to agree and release
  • Citizens must vote on the plan
  • It requires a public sale
About Mitchell Historic Properties
Mitchell Historic Properties (MHP) oversees Galveston properties owned by developer, philanthropist and preservationist George Mitchell and the Mitchell family, including its commercial and residential properties located downtown as well as three hotels – Hotel Galvez & Spa, The Tremont House and Harbor House Hotel and Marina. MHP owns and preserves approximately one-fourth of the buildings in The Historic Strand Seaport Area. For leasing information, visit www.MitchellHistoricProperties.com or call (409) 763-5806.

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