Long Beach takes control of Queen Mary in bankruptcy court • Long Beach Post News
The move means Long Beach will have full control of the vessel and will be responsible for deciding how much to invest in critical repairs to the aging vessel. An inspection report in April determined the ship would need at least $ 23 million in critical repairs to remain viable over the next two years.
Long Beach City Council will consider immediate approval of $ 500,000 in funds for Tidelands critical infrastructure on Tuesday to begin testing and design work for security projects. Officials said the city will work to identify other financing options to cover a minimum of $ 5 million in immediate repairs.
“We will be fully committed to the preservation of this historic monument and we are extremely grateful for this opportunity,” Mayor Robert Garcia said in a written statement.
The action comes as the current tenant filed a petition to dismiss the lease in bankruptcy court on Friday.
The Eagle Hospitality Trust vessel operator filed for Chapter 11 bankruptcy in January with a total debt of over $ 500 million. The ship’s lease was due to be auctioned off but received no bidders, while the city was locked in a legal battle with former operator Urban Commons over a litany of failed lease obligations.
Among the problems, the city said Urban Commons did not perform more than $ 40 million in critical repair work, causing “significant problems and damage” to the historic ship. The company also owes the city nearly $ 1 million in fees and unpaid rent.
Long Beach Assistant City Attorney Richard Anthony said on Friday that the waiver of the lease did not affect the city’s damages claims against the former operator and that the potential damages owed by the former operator in the city were still under consideration by the bankruptcy court judge.
Long Beach owns the Queen Mary, but for decades it has leased the ship to a series of operators who failed to make the ship profitable and went bankrupt.
A maritime survey released in 2017 found that the ship may need nearly $ 300 million in critical repairs to remain viable over the next few years. That year, the city issued $ 23 million in Tidelands bonds and funds to former operator Urban Commons to fix some of the most critical repairs listed in the maritime investigation, but funds ran out before the most repairs ended, and now the latest report says most of the urgent structural work hasn’t even started as the ship deteriorates further.
The report from a city-hired naval architecture and naval engineering firm called Elliott Bay Design Group, which inspected the ship on April 28, says the ship is vulnerable to flooding or possibly even capsizing if work reviews are not carried out.
While the advice at Tuesday will consider an emergency $ 500,000 in funds on city will need important funding to fix critical repairs including bulkhead repairs, removal of lifeboats, temporary bilge pumps and the installation of a back-up generator.
The ship will remain closed to the public until repairs are complete, officials said. The city council will organize at a later date a study session on options and other strategies for preserving the vessel.
As part of the transaction, Long Beach also regain control of the surroundings 40 acres of property, which officials say has great development potential.
“We know this is a big business and we are committed to doing good to our community which holds the Queen Mary in its heart,” said City Councilor Cindy Allen, whose District 2 includes the ship. , in a written statement.
The city will also consider a $ 2 million contract with Evolution Hospitality, a third-party entrepreneur who has managed the daily life of the ship operations over the past decade.
Long Beach last had control of the Queen Mary in 1978, while the Port of Long Beach owned it until 1993.
Long Beach is now maybe exploring change of control of Queen Mary and the surrounding land reverts to the City Port Commission, which oversees the Port of Long Beach.
The Queen Mary has served as a tourist attraction and hotel since arriving in Long Beach in 1967.