Long Beach City Mgm't Says Fixing And Keeping Queen Mary Could Cost Less Than Estimated By A Previous City Hired Consultant; Other Options Also Costly Or Costlier
Upbeat Port Hired Consultant Says Queen Mary Could Last Another 100 Years
Pacific Merchant Shipping Ass'n And Multiple Business Goups Urge City Not To Transfer Ship Back To Port
Councilmembers Don't Question Inconsistency In Past vs.Current Cost Estimates, Don't Pursue Who At City Hall Let Ship Decay To Its Decrepit Condition
<,li>Plans For Adjacent Developable Property Remain Unclear
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(July 21, 2021, 1:05 p.m.) -- In a July 20 midafternoon study session, city staff cited estimates by a City hired consultant firm to preserve and maintain the ship that are considerably lower (and thus arguably more manageable) than figures made by a previous City-hired consulting firm (and represented by the City to a Bankruptcy Court dealing with the City’s former ship operator (Urban Commons.)
A Port hired consultant offered an upbeat assssment, with one of its hired consultants saying the Queen Mary could last another 100 years, while acknowledging preserving the ship would entail sunk repair costs now plus ongoing maitenance costs.
The Pacific Merchant Shipping Association (representing west cast maritime interests) and multiple business groups strongly opposed transferring the ship (with its accompanying costs) to the Port (see statement below.)
City staff acknowledged previous repair-costs by City hired consultants (including 2017 estimate (first revealed by a PressTelegram reporter, not city staff) of roughly $235 to $285 million for known conditions including the main structural work (e.g. hull structure, tank tops, double bottom, and structural frames) but sough to downplay them. City staff cited a more recent Queen Mary Trip Report (2021), conducted by the Elliott Bay Design Group for City hired consultant Moffatt & Nichol (6.5 hour visual inspection of critical repairs completed or unfinished by past operators). It estimates to preserve the ship in place would mean one-time up-front expenses of $25-$50 million plus $5 million in annual ongoing costs (totaling $150-$175 million spread over 25 years.
As another option, the consulting firm said drydocking the ship at a new site would cost $200-$500 million (one time) plus ongoing $5 million in annual maintenance. The City consultant said retiring and recycling the ship would cost (various options) $105-$190 million (one time.)
A City hired consultant says the City's options are basically now
Preserve the Queen Mary in place
Deconstruct the ship at its current location
Retire and recycle the ship .
Move the ship elsewhere or deconstruction.
Make sufficient repairs and environmental cleanup to enable Ship to be towed to recycling
facility overseas.
City staff's materials omitted any mention of city management's action (in late 2019) ending the City's contract with decades-long time Queen Mary inspector Ed Pribonic after he went increasingly public with needed repairs he reported monthly left unrepaired by the City's then-ship operator. (City staff never disputed the substance of any of Mr. Pribonic's cited repair items.)
In his 2020 State of the City message, Mayor Garcia gave a rousing endorsement of the Queen Mary and its then operator Urban Commons. In 2021, he made no mention of the ship in his annual speech...and the Urban Commons bankruptcy proceeded to unfold with the firm ultimately turning its leases back to the City..
No City Councilmember pursued the inconsistency of the City's past cost estimates versus its current figures, and no Councilmember pursued exactly who among current and/or former City Hall elected or non-elected officials (by name) let the ship decay under the City's then-contracted operator(s).
[Scroll down for further.]
City staff said some preservation costs could be offset by regaining tourism visits to the now-closed ship. A City hired-consultant's "Economic Impact" projection claimed of $93 million output based in part on $42 million in labor income. City staff said the Queen Mary and surrounding land had generated over $58 million from its last full year from its now shuttered hotel, cultural tourism, special events, entertainment, food and beverage revenue (special events/filming bringing in $20,000+ per month.)
City staff noted the ship was declared a "National Historic Landmark" by the National Park Service in 1993, and raised the possibility that it might be declared a National Monument (like the Statue of Liberty) by Congressional legislation or a Presidential designation (using "Antiquities Act.")
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The real big ticket item is adjacent developable property. In Council testimony, a firm proposing an aerial tramway to move people from downtown to the property urged the City to incorporate and advance its proposal in Queen Mary options.
In April 2021, the City Council voted to explore the feasibility of transferring the ship (and all of Pier H) back to LB's non-elected Harbor Commission (including decisions on the adjacent developable property.) Since then Mayor Robert Garcia (who appoints Harbor Commissioners) has signaled that he favors keeping the Queen Mary, not dismantling it.
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As part of the study session, an upbeat Port study (prepared by Aegir) offered a photo of Sir Winston Churchill with the quote "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty." and a section titled "Under the prism of Realistic Optimism, time to adjust the sails" includes the quote "The pessimist complains about the wind; The optimist expects it to change; The realists adjusts the sails.) Speaking from the Council podium, Port of LB Executive Director Mario Cordero introduced a consultant who said the ship could last 100 more years with acknowledged sunk costs for repairs and continuing preservation costs.
But in a bluntly worded July 20 letter to Harbor Commission President Frank Colonna (cc'd to all LB City Councilmembers, Mayor Garcia and other Port officialdom), the Pacific Merchant Shipping Association (representing west coast maritime interests) was joined by multiple busyness groups (African American Farmers of CA, CA Cotton Ginners and Growers Association, CA Fresh Fruit Association, CA Manufacturers & Technology Association, CA Retailers Association, CA Trucking Association, Harbor Trucking Association) in stating
...Transferring the ill-fated vessel and the equally unsafe [adjacent former Soviet] submarine will be a huge drain of port resources, threatening the Port’s ability to invest in infrastructure needed to meetclean air goals and maintain port competitiveness.
The current condition of the Queen Mary and lack of city oversight for decades is well documented in reports by the City Auditor and in documents filed in Federal Bankruptcy Court. The history of the Queen Mary is one of over forty years of failure, multiple bankruptcies, coupled with ongoing corrosion that threatens the structural integrity of the vessel/hotel...[D]espite the bleak history of the Queen Mary and its equally bleak future as a waterfront attraction and hotel, there is now a proposal to ignore the past and transfer this albatross to the Port of Long Beach.
If the city wants the Queen Mary to be resurrected, then the city should fund all the costs associated. The city could enter into a management agreement with the port and pay for any costs for services and repairs. The port can deduct any costs associated with the Queen Mary from the port’s Tideland’s transfer to the City.
Given the current challenges surrounding the surge in containers, the massive infrastructure changes that have been mandated by the state, and the tenuous nature of the Southern California supply chain, it is irresponsible to shift half a billion in costs to the Port for the restoration of the Queen Mary. It should not be the responsibility of the Port to fund the reconstruction of the Queen Mary especially given its unsafe condition, lack of success as a visitor attraction and history of mismanagement for the past forty years. To do so will burden the Port with a cost that will impact its future success and ability to meet their environmental goals and fund necessary infrastructure to remain competitive...
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City staff left open the possibility that it might -- again -- lease away the City's current rights to the ship and adjacent property to an outside operator. It described potential future "operating models" as:
City Owned: City or Port retain all responsibility for improvements, maintenance, and management of hotel, special events, and landside development. City or Port retains all net revenues generated onsite.
Master Lease: City or Port transfer all responsibility to private Lessee to manage hotel, maintenance, replacement, special events, management of subtenants, and funding improvements. Master Lessee accepts all liability but retains all revenues generated onsite and pays rent to the City.
Hybrid: City or Port retain ownership and all revenue generated on Queen Mary and surrounding land but execute operating agreements with various hotel, special events, and development partners.
To view city staff's Power Point slides (it provided no businesslike memo before or after the study sesion), click here.
For video of the Council study session, click here.
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