Itex Plans Hotel for Galveston’s Medical Arts Building

A long-vacant office tower in downtown Galveston is finally poised for a comeback, with plans to reopen as a boutique hotel after sitting empty for decades.

Port Arthur-based Itex Group expects to kick off construction in February on the historic Medical Arts Building at 302 Moody Avenue, redeveloping the 11-story structure into a 120-room hotel dubbed The Quay, according to the Houston Business Journal. The project hinges on recently secured city permits and would mark the closest the property has come to redevelopment since the 1980s.

The hotel will join Hilton’s Tapestry Collection, a brand aimed at locally styled, independent properties, with Florida-based Driftwood Hospitality Management tapped to operate it, the outlet reported. Plans call for a mix of suites and rooms, along with a ground-floor restaurant and bar. Itex is targeting a January 2028 opening.

The building’s site is part of the bet. Sitting at the edge of The Strand district and within a few blocks of Galveston’s cruise terminals and Pier 21, the property is aimed to capture leisure travelers and event-driven demand, as well as business tied to nearby corporations and the University of Texas Medical Branch.

Itex bought the property in 2016 intending to convert it into apartments, an idea previously floated by former owner Andy Vickery, who also explored a timeshare concept, according to the Galveston County Daily News. The pandemic ultimately pushed Itex to abandon the residential plan in favor of hospitality, which CEO Chris Akbari said now pencils out better, given Galveston’s tourism and cruise traffic.

The Medical Arts Building dates to 1929 and was developed by William L. Moody Jr.’s American National Insurance Company as an annex to its nearby headquarters. Once home to medical offices, the tower has been vacant since the 1980s and has deteriorated significantly. Parts of the exterior have fallen away, windows are missing and the interior was fully gutted years ago.

Itex plans to tackle the exterior first before rebuilding the interior, balancing historic preservation with modern hotel layouts. Houston-based MCS Architects is designing the project, while a general contractor has yet to be selected.

The redevelopment would land amid a broader refresh of Galveston’s hotel stock. Several marquee properties have recently undergone renovations, including Tremont House and Grand Galvez, while Hotel Lucine reopened in 2023 after decades as a roadside motel, according to the publication. On the island’s East Beach, Dallas-based RREAF Holdings is pushing ahead with a $700 million Margaritaville resort and residential project.

— Eric Weilbacher