The mid-century Commodore on the Beach hotel in Galveston is scheduled for foreclosure auction on Tuesday after a $12 million loan default. The long-closed Seawall property has sat fenced off since 2023, with renovations unfinished and permits expired.
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The iconic mid-century hotel, Commodore On the Beach, is scheduled to undergo a foreclosure auction on Tuesday morning. The event highlights the ongoing challenges a stalled redevelopment initiative faces. The event underscores the persistent difficulties facing a redevelopment initiative that has remained stalled for more than a year.
Galveston County property records show that a substitute trustee's sale will auction off a 92-room establishment on Seawall Boulevard. The historic Galveston County Courthouse on 21st Street will host the upcoming event. A January 9 filing indicates that the hotel will be auctioned to the highest cash bidder, with the property sold in its existing condition, “AS IS.”
The property is currently owned by JMK5 Seawall, a holding company overseen by Jerome Karam, an attorney and developer located in Friendswood. County records indicate that the foreclosure is linked to a $12 million loan that was originally issued in September 2024 by Texas Dow Employees Credit Union. Lakeland West Capital 51, LLC officially took ownership of the debt in December.
Since early 2023, the Commodore has been undergoing renovations and remains closed to the public. Work crews have not been present at the site for several months, resulting in a chain-link fence surrounding the hotel. City records show that a renovation permit has officially expired as of July 2025.
The foreclosure occurs even after signs of a potential sale to Good Bull Investments, based in Woodlands, were evident last May. Karam told the Galveston County Daily News that the buyers have indicated they are willing to acquire the property as is, even though it requires repairs. He emphasized, “Given my extensive portfolio, it was the appropriate moment to sell.”
Good Bull's representative recently informed the Daily News that while most guest rooms have undergone renovations, significant upgrades are still unfinished. The hotel's swimming pool, known for its cascading waterfall, will undergo essential repairs and a new elevator installation as part of the planned upgrades.
Karam’s firm completed the acquisition of the hotel in 2021, purchasing it from the Galveston Restaurant Group. The Commodore, founded by the Druss family, first opened its doors in 1966. The establishment offered a distinctive local alternative before the emergence of national hotel chains on Seawall Boulevard.
The official website of JMK5 lists the property's classification as “In Development.” Representatives of Karam and Good Bull did not respond to requests for comment.
The impending foreclosure sale is poised to significantly influence the future of the long-closed beachfront landmark, with the potential to either breathe new life into the site or condemn it to remain yet another incomplete project along the Seawall.
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