Ghost of a Chance

The Balinese Room needs a gambler willing to bet the house - on its own future

Ghosts haunt the fabled Balinese Room in Galveston.

They aren't the ghosts of performers who've played the South Seas Ballroom there, like Frank Sinatra or Peggy Lee or Phil Harris. They're not even the ghosts of the gamblers who played in the most infamous illegal gaming room in Texas.

They're the ghosts of real estate investors who've come and gone, dazzled by the possibilities of restoring the famed site only to be humbled by the finances of doing so.

The big-dream boys have appeared regularly since the Balinese shut its doors in the late 1980s. October 1993, the Houston Business Journal: "Buyer Bids to Revive Fabled Balinese Room"; May 1996, the Houston Chronicle: "Preservation Group Hopes to Restore Balinese Room"; March 1998, the Chronicle: "A Revival of Galveston History: Legendary Balinese Room Expected to Reopen This Summer."

All those plans fell through, defeated either by the complexity of figuring out who owns the damn thing or by Mother Nature, which threw Tropical Storm Frances at the building in August 1998, ending the renovation project that looked like it had the best chance to succeed.

And now, in the spring of 2001, the guy who was beaten by that storm is desperately looking for a buyer, someone who can make needed repairs to the piers under the 400-foot covered walkway that goes from the seawall to the ballroom, before hurricane season comes and finishes what Frances started.


A tour of the Balinese today makes clear the daunting challenges and intriguing possibilities of the place. The covered walkway, famous for providing enough warning for the backroom gamblers that a raid was under way, sags noticeably just before it meets up with the main room.

When you reach it, you and your guide, Galveston realtor David Wallace, have to walk across the bowed section one at a time in order not to tempt fate.

But once past that shaky section, you walk by the coat-check room and enter the perfectly preserved South Seas Ballroom. Bamboo walls, parquet floors and a stage flanked by palm trees trimmed in black neon are all there in their swellegant glory, and you can't help but think back to the days when a night out meant "dining and dancing."

"It's amazing, isn't it?" Wallace says, and he's right.

He shows the tiny dressing room, where the stars perhaps wondered what the hell they were doing in Galveston, Texas, instead of the Copacabana. He then takes you through a door to the back room, where much of the Balinese legend resides.

From World War II to 1957, when officials finally decided they'd had enough, the Maceo brothers ran the most famous illegal gambling operation in the state here. Roulette and craps were the games of choice for the instant oil millionaires from Houston and Dallas who came to the island for some R and R.

When a desultory raid did occur, by the time the lawmen sprinted down the walkway and fought their way through the South Seas crowd (who were inconveniently standing by that time because the band would have struck up "The Eyes of Texas"), the chips would have been pocketed and the gaming tables flipped over or reattached to the wall. The Texas Rangers would find nothing but some elegantly dressed couples sipping drinks by a curved bar.

Nowadays, though, the back room is an empty storage space, not restored like the ballroom. At spots you can see through the floor to the gulf below.

But as you continue the tour, to the 4,000-square-foot kitchen with its cashier's room that served both diners and gamblers, the possibilities continually leap to mind.

Wallace is all too aware of that. "When someone comes in and takes a look around at all this, they just want to whip out their checkbook and buy it right then," he says. "But you better have some deep pockets once you buy it."


Bob Greig found out about the need for a bankroll when he bought the place in 1998. First, though, he solved one of the most complicated hurdles blocking redevelopment of the Balinese: whether the building was owned by the bankruptcy estate of the last guy who had it, or the state of Texas under the Open Beaches Act.

Thanks to years of steadily eroding beaches, almost all of the property is over the Gulf of Mexico, and the state claims any land that's under water at high tide. The bankruptcy estate of Johnny Mitchell, the man who ran a restaurant there until the late 1980s, also claimed ownership.

"If you did a deal with one, you were going to wind up in court being sued by the other," says Greig.

In a complicated settlement, Greig purchased the site from the Mitchell estate for $160,000, donated it to the state (for a nifty tax write-off) and then leased it for 60 years.

The Balinese is unique in that way, says John Kerr, a spokesman for the state's General Land Office. Texas has completely gotten out of the business of leasing any property for such boardwalk-over-the-water-type developments.

"The Open Beaches Act says you can't impede beach traffic with a development, and those things do, and we're looking instead to open the beaches up," he says.

The Balinese actually represents the last chance to build something new over a Texas state beach -- the lease allows for a 74,000-square-foot expansion, on existing piers that once supported a low-lying fishing pier that washed away generations ago.

Greig inked the deal in 1998 and set about the restoration process. He concentrated on the South Seas Ballroom.

"We spent two months just getting the pigeon shit out. It was six inches deep in there," he says. "There'd been hundreds of pigeons living in there for years."

But by August of that year, the ballroom was clean, tables and chairs were installed, restrooms were fixed, and air-conditioning was humming. A test party for 100 invited guests was a smash, he says.

A month later, Frances hit. Part of a small fishing pier came loose and smashed into the pilings supporting the walkway, knocking out three of them and putting too much strain on 20 others.

Greig is suing his insurance companies over what he considers laughably low settlement offers, and he says that has precluded him from repairing the problem. "I would jeopardize my position if I fixed it up," he says.

And so he's looking for someone to pay $25,000 to take over the lease.

"Tropical Storm Frances just knocked us back to ground zero," he says.


The Balinese didn't die with the 1957 raid that ended gambling; instead it suffered through a slow and drawn-out battle to keep its place in a world where no one "dined and danced" much anymore.

In the historical room of Galveston's Rosenberg Library, the file on the Balinese Room documents the demise. There's a color brochure from the '60s, with color drawings of a sleekly finned sedan at the front door of the building, which then featured a lighted pagoda on the roof. Men in white dinner jackets and women in evening gowns stroll along the seawall. In the back room, beehive hairdos scrape the ceiling near the curving bar, and the tables are circled by swirling bucket seats whose cushions are encased in white Naugahyde.

The file also has a news release announcing the beginning of "the 1971 season," which will feature late-night excitement via something called "The Night Watch."

"Here," the release says, "you can spend an evening in the 'mod world' of entertainment, enjoying the latest in discotheque music and dancing, and do come casual."

By the 1980s the end was near. A daily notebook from 1985, left on a dusty table in the offices behind the ballroom, tells the dismal tale: "Very slow today," notes one entry. "Slow today; no complaints," says another, dutifully noting "10 reservations, 39 walk-ins."

These days potential buyers aren't necessarily looking to hark back to the restaurant days. Wallace says if he had the chance he'd sublease portions of the building to souvenir and T-shirt shops, with a bed-and-breakfast in the back room. One group even talks of turning the former sin palace into a Christian youth center. At least one legitimate party does have some experience in restoring historic downtown Houston buildings, though.

Whoever takes over the lease will face an uphill climb. The lease itself isn't onerous -- it's fairly complicated, but you might have to pay the state $10,000 a year or so -- although the repair job will cost anywhere from $500,000 to $1.5 million.

Most pressing is the walkway. While the main building has survived countless heavy storms, one more solid hit will likely take out the sagging section of the walkway and dramatically increase the cost of repairing it.

"There's a lot that needs to be done, but there's a real nice base to start from," Wallace says.

Both Wallace and Greig expect to close a deal soon. Maybe that will mean the Balinese will once again thrive.

Or maybe that will mean yet another ghost will be added to its historic halls.

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