Mitchell estate sells landmark Galveston hotel properties

Cynthia and George Mitchell stroll in front of The Tremont House in Galveston, Texas. Mitchell Historic Properties reached an agreement to sell the landmark hotel, with a majority of proceeds to benefit the Cynthia and George Mitchell Foundation. 

Mitchell Historic Properties, the Galveston real estate arm of the late energy baron and developer George P. Mitchell and his wife Cynthia, is selling its two renowned Galveston hotels: the Hotel Galvez & Spa and The Tremont House, both historic properties and two of the most recognized landmarks on the island.

The buyer, an affiliate of Texas-based hospitality management and investment group SRH Hospitality Holdings is expected to close on the properties in the first quarter of the year. Terms were not disclosed.

Mitchell Properties, owned by the estate of Mitchell, a billionaire who died at 94 in 2013, plans to contribute the majority of the proceeds to the Cynthia and George Mitchell Foundation, which supports environmental protection, social equity and economic initiatives.

“It’s big news for Galveston and big news for us. There’s so much emotion tied up in those properties,” said Grant Mitchell, president of Mitchell Historic Properties, board chair of the family foundation and one of Mitchell’s 10 children.

Mitchell said the hotels hold many memories of his parents. The decision to sell them was a difficult one.

The properties are still held in the Mitchell estate, and with much of the couple’s wealth going to their foundation, continuing to own the hotels was not a viable long-term option, Mitchell said, adding that the siblings remain dedicated to continue their parent’s legacy of giving back and enhancing the community.

“We love the hotels. They’re successful and we have the privilege of being stewards of them,” he said.

SRH’s hospitality portfolio includes a half-dozen hotels throughout Texas, some of which are in development. The company is based in the Dallas area.

“We’re keenly aware of Cynthia and George Mitchell’s legacy and the family’s importance to Galveston and the greater Galveston Island community,” Paul Barham, CEO of Harrell Hospitality Group, a partner in SRH Hospitality, said in a press release released Thursday afternoon. “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.”

Galveston was George Mitchell’s hometown and he and his wife always considered it a second home.

Mitchell made a fortune in oil and gas and was a pioneer in the technology of hydraulic fracturing and horizontal drilling, using it to tap oil and gas in the Barnett Shale of North Texas years before it unlocked a revolution in U.S. energy. He also developed The Woodlands, now a thriving master-planned community north of Houston.

As civic leaders in Galveston, the couple looked for ways to improve the town’s economy and help restore its historic neighborhoods.

The Mitchells bought The Galvez, a 1911-era Spanish Mission-style structure, in 1993 and rehabilitated the property, restoring the main entrance and removing additions made between the 1950s and 1980s.

The 224-room property at 2024 Seawall Blvd. is a beachfront hotel with 13,000 square feet of meeting space, a spa, full-service restaurant and pool with a swim-up bar. It is appraised at $17.3 million, according to the Galveston Central Appraisal District.

The Tremont House on Mechanic Street between 23rd and 24th is in the former Leon & H. Blum Building, which the Mitchells bought in 1985, transforming the 1897 property into a high-end hotel. The 119-room hotel is appraised at $6.2 million.

Both properties are affiliated with Wyndham.

Apart from the hotels, Mitchell Historic Properties owns about 20 other Galveston properties, including Pier 21 on Galveston’s port and about 15 historic buildings in the downtown’s Strand District.

The Mitchells began buying properties in downtown Galveston in the 1970s, when the now-bustling Strand area was a blighted part of town.

“A lot of it was boarded up and abandoned,” Mitchell said. “They began to purchase and revitalize those buildings to light the spark of development.”

Mitchell said the family is still evaluating plans for the remaining properties. While nothing has been finalized, he said there could be ways to fill underutilized space in the downtown buildings, citing such ideas as incubators, coworking space and workforce housing.

“As a family, our intent is for these properties to be leveraged for the greatest social impact for the city,” he said. “We’re figuring how to get that done.”

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