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Galveston City Council unanimously agreed Thursday to two property tax incentive agreements with the developer of a project at the former Falstaff Brewery on 33rd Street who has plans for a 98-room boutique hotel, storage and event space at the building.

Work is underway on the building after asbestos was removed from it, Friendswood attorney and developer Jerome Karam said. The storage facility and event space is slated for completion later this year, he said. Karam is working with a hotel management rm to negotiate which brand will be the best t for the historic and industrial space, he said.

The facility had been “vacant and feral” for more than 35 years with no investment and little interest from developers in rehabilitating it, Mayor Jim Yarbrough said.

Initially when approached about developing the property three years ago, the city had said it wouldn’t help until it saw progress and results on the building, Yarbrough said.

But the developer had made major improvements to the facility and has contracts to buy the land around the development, too, he said.

“He’s the rst son of a gun in 35 years to spend a nickel on it,” Yarbrough said. “It’s not only getting in good shape, it looks great.”

The mayor cheered the project, calling it an anchor for development north of Broadway — and the westward expansion of downtown, he said.

“The whole area — its time has come — and going to get nothing but better, and this will be a nice anchor on this particular side of town,” Yarbrough said.

Under the arrangements, called 380 agreements, the city would refund up to 50 percent the cost of reconstruction or rehabilitation of the  development, City Manager Brian Maxwell said.

State law allows cities to create programs to promote economic development and commercial activity. The refunds are granted by freezing property tax values or waiving sales taxes due from the property for up to 20 years. The city estimated the reimbursement between $1.6 million and $1.9 million for the hotel, according to documents presented during a workshop meeting before the council vote. For the storage and event center, the city estimated the reimbursements between $580,000 and $715,000.

Because of the size and scope of the project, the incentives are needed to get it to completion, Karam said.

“It’s a very important project, it’s a very difcult, complicated project and it’s a very, very expensive project,” Karam said. “It takes a village to bring something like this off the ground.”

Maxwell on Thursday called Karam “Dr. Impossible,” citing other developments he’s taken on around the county that once seemed unlikely, such as the Mall of the Mainland in Texas City, which Karam has revitalized.

Karam in June 2015 bought the 313,000-square-foot brewery complex, which had been constructed in 1905 and had greatly deteriorated since closing in 1981. Under Karam’s ownership, the property has been divided into four plats. Along with the hotel, Karam is developing a climate-controlled storage facility at the Falstaff site and earlier this year announced plans to create an event center on the fifth floor of the storage facility, in what was the former site of the Falstaff Brewery tasting room.

The event venue, which he has yet to name, will accommodate 500 people and will be accessible from a walkway connected to the hotel, Karam said.

The two 380 agreements approved Thursday are the second and third such
agreements Galveston has entered, Maxwell said. In 2016, the city council approved a 380 agreement for the redevelopment of 2202 Strand, the former Col. Bubbie’s Strand Surplus Senter.

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