Part 2 - United States National Bank Building

Reinvented: The Ultimate Urban Crisis

By Kimber Fountain
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Four names, 146 years, and counting. The United States National Bank of Galveston became an island institution after it was purchased and brought to prominence by local magnate Isaac H. Kempner in 1902. Founded in 1874, the Island City Savings Bank was first renamed Texas State Bank in 1903, followed by a second renaming in 1924 that coincided with the completion of its new, twelve-story headquarters at 2201 Market Street in the heart of downtown Galveston.

The storied financial institution remained in the Kempner family for nearly six more decades, well past the death of their 20th century patriarch in 1967. At last, on May 3, 1982, two-months shy of its eighty-year anniversary as a Kempner entity, USNB was purchased by Cullen/Frost, Inc.

San Antonio-based Frost Bank first merged with the Cullen Bank of Houston in 1977, which added to Frost’s assets the fortunes of both the Cullen namesake, famous wildcatter Hugh Roy Cullen, and that of the bank’s largest original shareholder, oil and real estate tycoon R.E. “Bob” Smith. Smith was also the majority owner of the professional Houston baseball team formed in 1962 that eventually became the Houston Astros.

With the addition of the Kempner trust via the acquisition of USNB, Cullen/Frost possessed much larger trust assets than was typical for a bank of their size. In 1992, for example, Kempner-backed holdings generated nearly $6 million which accounted for one quarter of Cullen/Frost’s net income that year.

This is a likely explanation for why the USNB retained its name and was operated separately from its Cullen/Frost mothership for nearly two decades, but as new financial legislation was passed that gave banks permission to offer a broader range of services to their customers, Cullen/Frost fully absorbed the USNB charter in 2000.

USNB Interior
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Since then, as Cullen/Frost has continued to grow through outside acquisitions and pursuantly made the list of the largest banks in the United States, the Galveston branch of Frost Bank has operated quietly out of the second floor of 2201 Market Street while the rest of the twelve-story structure has been mostly unused.

The building did enjoy a brief moment of fame when it was used as the setting of the music video for “Party UP,” the hit single off New York rapper DMX’s third and best-selling album, …And Then There Was X (1999). The video prominently features the Galveston Police and Fire Departments in a short-form saga about a man mistaken for a bank robber who becomes embroiled in a stand-off and executes a dramatic escape.

The USNB’s distinct corner entrance and exterior provided aesthetic fodder for wide-angled fisheye shots, and frequent displays of the gilded lobby, marble staircase, and magnificent chandeliers betray an interesting paradox—while the sterile, cookie-cutter output of most modern architecture and design may be the present norm, it will never be able to inherently (or artistically) symbolize wealth or prestige as well as the effortless, antique elegance of yesteryear.

This fundamental understanding is a driving force behind the development firm of Hadar Goldman. Headquartered in Israel, the firm specializes in bringing modern updates to historic properties around the world, often transforming the surrounding areas in the process.

With a pointed focus on sustainable innovation, technology, and creativity, Hadar Goldman has his sights on creating an urban paradise in downtown Galveston. The USNB Building at 22nd and Market, originally dedicated exclusively to the operation of banking and business, will soon provide residential housing for the very first time in the form of luxury apartments and a niche downtown community.

The bank will remain on the 2nd and 3rd floors where it has been since the beginning, but both the ground-floor retail space and the upper level office spaces on floors 4-11 have been transformed into residential units for a total of 63 one-and two-bedroom apartments. Tenants on the upper floors will enjoy spectacular, panoramic views of the island, and all residents will benefit from state-of-the-art amenities and technology, including smartphone-controlled heating, A/C, security, and lighting.

The original formation of the upper floors into office spaces of varying sizes and layouts has in turn created a diverse range of floorplans created by architect David Watson for the soon-to-be available apartments, and the arrangement of all units along the outside perimeter means no windowless rooms.

Created specifically for startups and small businesses, Goldman’s reinvention of the USNB building represents a shift from traditional office spaces into a combination live/workspace immediately surrounded by an active community with access to a cooperative workspace, a spa and wellness center, and a yoga studio. Additionally, the residential tower will be capped with a rooftop pool and gym, and some plans indicate that a rooftop bar may be added as well.

The apartment interiors were designed by renown international designer Karim Rashid, who has managed to brilliantly and seamlessly blend an historic setting with an ultra-modern vibe without compromising or detaching from the trademark warmth and charm of the island.

Geometric patterned flooring and state-of-the-art appliances including a washer and dryer, coupled with those magnificent windows and their unparalleled views, present a crisp, pristine living space. Concurrently, the iconic lobby has been untouched, and the original, square mosaic tile typical of 1920s design remains along the main hallways of each floor.

Combined with vintage-style wall sconces and a number of original, solid wood doors, these historic nuances infuse the common areas with an authentic feel that is adequately bolstered by a nearby bit of nostalgia—the Kempner Trust will retain its offices on the 12th floor of the building.

Leasing of the apartment units is being handled locally by Tom’s Galveston Real Estate, owned and operated by Galveston resident Tom Schwenk. A successful and self-made entrepreneur himself, Tom’s enthusiasm for both Galveston and the development of the USNB building hearkens to Ike Kempner’s “Spirit of Galveston,” a sentiment that Kempner coined to prioritize determination and creativity in the face of uncertainty after the 1900 Storm.

With a knack for business even as a child, Tom’s unstoppable ambition allowed him to retire at the age of 42. A sixth-generation New Yorker, Tom fell in love with Galveston on his very first visit and moved to the island with his husband in 2001.

Soon after, doctors discovered a defect in Tom’s heart and suggested that he find a way to stay active. He started in real estate as a leasing agent with Joe Tramonte Realty following Hurricane Ike, building a client base from people who needed temporary residences after the storm. “Well, two years later, they all needed to buy houses,” he says.

At the age of 61, he started his own real estate firm that has become island famous in just a few short years. In addition to generously supporting 43 different local charities and non-profit organizations, Tom sponsored the painting of crosswalks in tribute of the Coast Guard and Gay Pride last June, and his agency is the only one in Galveston that provides health insurance assistance.

“Be kind, give back, and ask how you can help,” Tom says. “That’s the way I have lived.”

A world class developer, brilliant designer, and a genuine, reputable agent—together they are producing and promoting an innovative reinvention of Galveston real estate that promises to diversify the meaning of “island living” while elevating the status of downtown.

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Even as it sat mostly empty for decades, the mere presence of the United States National Bank Building was a subtle but important reminder of a forgotten tale of Galveston’s history. Now as it nears its next incarnation, it stands as a beacon for Galveston’s future.

For more information on the luxury apartments at the USNB building at 2201 Market Street, to view floorplans, or to book an appointment to view the model unit, visit

A limited number of units will be available for move-in by July 1, with most or all units ready by mid-July. First-floor apartments are all 1BR, $1250/month. Both 1- and 2-BR apartments will be available on floors 4-11, ranging from $1305-$3225/mo.