International Bancshares Floats Tiki Island Marina

IBC acts as developer, brings in Yacht Clubs for $25 million project

Houston Business Journal, May 15, 2009
by Jennifer Dawson

International Bancshares Corp. is doing double duty as lender and developer to build a $25 million marina on Tiki Island, now that the project’s original developer is no longer on board.

IBC-Houston originally loaned money to Tiki Ventures Ltd. for construction of 90 residential condominiums and 150 boat slips on the tiny hamlet just outside of Galveston. But a sinking economy scuttled the deal and the bank took possession of the property late last year.
The site is now owned by an IBC subsidiary called Premier Tierra Holdings Inc.

The bank has brought in Yacht Clubs of the Americas to market 400 proposed marina slips as condominiums for boats. The Florida-based operator of upscale marinas launched a marketing effort last week in conjunction with Laredo-based IBC. The partners will not disclose the nature of their business arrangement.

“It’s the first time we’ve developed a project,” says Jay Rogers, chairman and CEO of IBC-Houston.

“It’s not our business to be in the real estate business but occasionally banks end up with real estate,” Rogers says. “Our goal is to add value to it and sell it when it’s appropriate.”

The appropriate time could be determined by federal banking regulators, according to Paul Stephens, an associate at Carson Medlin Co. investment bankers.

He says IBC may initiate development on the property, but banking officials tend to frown on banks that keep real estate on the books for much longer than a year.

“Regulators don’t like to see it,” Stephens says. “They’re going to eventually get on them to sell it.”

Rogers says IBC expects a lot of interest in the property, so the issue might be moot.

“It’s for sale today,” Rogers says. “It’s for sale tomorrow.”

Tiki Island is of special interest to Rogers, who grew up in nearby La Marque.

He recalls that, until recently, a marina has operated on Tiki Island since the 1960s, and notes that Tiki is the closest entry point to Galveston Bay for 5 million people in the area.

As part of the atypical development strategy, IBC hired Jennifer Hoff as vice president to oversee the Tiki Island project and work on other real estate properties in the bank’s portfolio.

Hoff also brings local color to the table. The real estate professional says she’s been involved in the marina business and grew up going to Tiki Island’s Teakwood Marina with her parents.

One of her first tasks upon taking the new job two months ago was to reel in Yacht Clubs of the Americas.

The Yacht Clubs concept will be a high-end marina comparable to a country club, Hoff says.

“It’s a lifestyle concept,” she says. “It will be the first in Texas.”

Wet and dry pricing

The Tiki Island Yacht Club would be the first property operated outside of Florida and The Bahamas by Yacht Clubs of the Americas.

Plans call for 250 dry slips for boats up to 45 feet long, as well as 150 wet slips that can accommodate vessels up to 100 feet in length. “Dry Rackominiums,” as they’re called by Yacht Clubs, range in price from $65,000 to $145,000. “Wet Dockominiums” cost between $148,000 and $514,800.

Maintenance fees have not been established yet, but will most likely range from $225 to $250 per month.