The Venetians settled in this area in 1252 until the Turks took the town in 1645, so have had a large influence on the architecture of the town. Near the eastern harbour is the Kastelli quarter which they established and fortified. The pictures below show warehouse buildings from the latter part of the Venetian period, which were used to trade and store goods from the ships.
These buildings are called "Arsenalis", and were no doubt modelled on similar chambers carved out of cliff faces by the Romans, which can be seen elsewhere on the island. At the western end of the island, not far from here, these caves are now several metres above sea level, as Crete is still gradually tilting due to tectonic activity, and the western end is rising, and the eastern end sinking.
These Arsenalis would have been used for ship construction, but also to store gunpowder and cannonballs. More recently they might be used for chandlery, or be converted into something else entirely (like the arches in EastEnders?).
Latter photo taken from one of the outer "arms" of the harbour walls.