This was a city within Texas.
After having killed Walter, Emile LaRoux plans on taking his severed head back to Galveston so as to complete his job. Emile then receives a call from Virginia, being asked to take up the job of hunting down Morgan Jones.
Teddy reveals to Alicia his plan to use the sub's nuclear missiles, telling her that the sub washed up in Galveston. Grabbing Teddy's radio, Alicia passes on the warning and the location to Victor Strand.