A vacant office tower in downtown Galveston is set for redevelopment as a boutique hotel after decades of inactivity. Itex Group, based in Port Arthur, plans to begin construction in February on the historic Medical Arts Building at 302 Moody Avenue. The 11-story structure will be transformed into a 120-room hotel called The Quay, according to the Houston Business Journal.
The project recently received city permits and represents the most significant progress toward redevelopment since the building was vacated in the 1980s. The new hotel will be part of Hilton’s Tapestry Collection, which focuses on locally styled, independent properties. Florida-based Driftwood Hospitality Management has been selected to operate the hotel. Plans include a mix of suites and rooms, along with a ground-floor restaurant and bar. Itex aims for a January 2028 opening.
Located near The Strand district and within walking distance of Galveston’s cruise terminals and Pier 21, the property is positioned to attract leisure travelers, event attendees, business visitors linked to nearby corporations, and those connected with the University of Texas Medical Branch.
Itex acquired the building in 2016 with initial plans to convert it into apartments. This idea had also been considered by previous owner Andy Vickery, who explored both residential and timeshare options. However, due to challenges brought by the pandemic, Itex shifted its focus from residential development to hospitality. CEO Chris Akbari explained that this decision made more sense financially given Galveston’s tourism industry and cruise traffic.
The Medical Arts Building was constructed in 1929 by William L. Moody Jr.’s American National Insurance Company as an annex to its headquarters nearby. It previously housed medical offices but has remained empty since the 1980s. Over time, parts of its exterior have deteriorated or fallen away; windows are missing and its interior was gutted years ago.
Itex intends to restore the exterior before rebuilding inside while balancing historic preservation with modern hotel design requirements. Houston-based MCS Architects is responsible for designing the project; a general contractor has not yet been chosen.
This redevelopment comes amid ongoing updates across Galveston’s hospitality sector. Other notable hotels such as Tremont House and Grand Galvez have recently undergone renovations, while Hotel Lucine reopened last year after serving as a roadside motel for decades. Additionally, Dallas-based RREAF Holdings is moving forward with a $700 million Margaritaville resort and residential development on East Beach.
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