Long Beach has regained control of the Queen Mary from the ship’s operating company over concerns that the 87-year-old vessel has not been properly maintained, the city said on Friday.
“For the first time in decades, Long Beach has full control of the Queen Mary. 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 statement.
The old liner turned into a floating hotel has long been a challenge to operate, with a 2017 study recommending that up to $ 289 million in renovations and upgrades were needed to prevent parts of the ship from flooding. According to a mine of court documents and inspection reports released last month, the Queen Mary needs $ 23 million in immediate repairs to prevent her capsizing.
The company that held the lease to operate the ship, Eagle Hospitality Trust, filed for bankruptcy in January and agreed to waive its lease.
Long Beach, which owns the ship and the property surrounding it, said on Friday that Eagle Hospitality was in default of several provisions of the lease, including failure to maintain the aging ship.
Long Beach also announced Friday that the city is immediately entering into a $ 2 million contract with Evolution Hospitality to act as the ship’s custodian for the next six months. For the past 11 years, Evolution has been the third party subcontractor managing the day-to-day operations of the vessel.
Long Beach City Council is expected to meet on Tuesday to approve the contract with Evolution and consider authorizing $ 500,000 to “begin testing and design work for the most critical repairs recommended in recent inspections, including repairs. bulkheads, the removal of lifeboats and the installation of an emergency generator, temporary bilge pumps and water intrusion warning systems, ”the city statement read.
Eagle Hospitality’s bankruptcy proceeding is just the latest setback for the iconic ship Long Beach hoped to one day be the center of a thriving entertainment district.
Over the past 50 years, Long Beach has used several companies, including Walt Disney Co., to manage the ship and develop the adjacent beachfront property, with mixed results.
Disney tried in 1990 to fit the ship into a $ 3 billion ocean-themed amusement park. But the Burbank entertainment giant refused to renew its lease two years later and instead focused on building California Adventure Park next to Disneyland.
A tenant filed for bankruptcy in 2005, and an operator abruptly terminated his contract and walked away. For much of 2009, in the aftermath of the Great Recession, room occupancy rates on the ship fell to 50%, barely enough to cover expenses.
Eagle Hospitality was established in 2019 by Urban Commons, the real estate investment and development firm that held a 66-year lease to operate the Queen Mary and develop the 65 acres surrounding it. The lease was to last until 2082. The trust was listed on the Singapore Stock Exchange for the purpose of raising funds to finance hospitality-related businesses primarily in the United States, including a $ 250 million business development. around the ship called Queen Mary Island.
Urban Commons published a plan in 2017 for the $ 250 million Queen Mary Island project, saying the waterfront entertainment complex adjacent to the ship should help pay for desperately needed repairs to the ship.
Over the years, the ship has hosted music, food and holiday festivals, including Halloween celebrations and Friday the 13th-themed ‘haunted room’ offerings that took advantage of historic interiors and myths. of the floating hotel.
Many of the ship’s rooms and event spaces have been renovated, but the costliest structural upgrades have been postponed, according to inspection reports.
Eagle Hospitality, which owned 26 hotels, filed for bankruptcy as the COVID-19 pandemic devastated the travel and hospitality industries. The January bankruptcy filing said the company had liabilities of more than $ 500 million, the largest of which was a $ 89 million loan from Lodging USA Lendo.