The City of Long Beach Queen Mary Updates
The Queen Mary arrived in Long Beach in September 1967 after having carried over 2 million passengers on more than 1,000 voyages across the North Atlantic during its historic sea-going career. It is important to note that when open and operating, the Queen Mary is a major economic generator for Long Beach residents and helps to generate tax revenues that pay for important services citywide. An economic impact study completed by Beacon Economics was released in May 2020 (Queen Mary Economic Impact Report), confirming the immense economic impact that the Queen Mary has on the Long Beach economy. Some key insights for Long Beach specifically:
- In Long Beach, spending associated with the Queen Mary supported 1,374 jobs;
- Contributed $42.7 million in labor income;
- Generated $93.7 million in economic output; and
- Of the 1,365 direct jobs supported in Long Beach, 329 were at the Queen Mary
City leadership has proactively documented the necessary repairs to the Queen Mary, beginning with the first-ever comprehensive inspection report shared with the public in 2017. The previous operator took responsibility for beginning implementation of these repairs in 2016 pursuant to the Lease. On September 18, 2018, the City Manager detailed these repairs in a public presentation to the City Council.
On September 23, 2019, the City Manager provided another written update to the City Council regarding the status of these projects. On October 1, 2019, the City of Long Beach sent a letter to the previous operator which is detailed and attached to a written memo to the City Council on November 4, 2019, indicating that the operator was falling short of its obligations under the terms of the Lease. For more information on the repairs and public reports, please see this latest update on May 20, 2021.
Beginning with the notifications in late 2019, the City has provided numerous formal notifications of default to the previous operator regarding various failures to comply with its obligations under the Lease. These included, among others, a failure to maintain the Ship in a first-class condition, timely rental payment, and failure to provide financial details requested by the City and City Auditor. On February 26, 2021, the previous operator formally provided a Notice of Chapter 11 Bankruptcy. The bankruptcy proceedings are ongoing.
On May 14, 2021, the City of Long Beach filed an Objection to Sale of Leases with the Court administering the Queen Mary bankruptcy. In May 2021, the City and its maritime engineering experts had the opportunity to inspect the Queen Mary and have determined that the approximate cost to cure all existing noticed defaults under the Lease have increased to between approximately $41 million and $58 million. City management, together with the City Attorney’s Office, will continue to take all appropriate actions in the debtor’s bankruptcy case to protect the City’s property and achieve an outcome that will best position the Ship for long-term success.
On May 28, 2021, the Office of the City Manager released an official statement about the Queen Mary.
On June 4, 2021, the previous operator surrendered its interests in the Lease, and responsibility for operating the Queen Mary Hotel and surrounding property returned to the City effective immediately.
To protect the safety and stability of the Queen Mary, on Tuesday, June 8, 2021, the Long Beach City Council approved a short-term caretaking agreement with the current on-Ship operator Evolution Hospitality. In addition to the Queen Mary, Evolution Hospitality operates a diverse portfolio of lifestyle hotels across North America.
The council action will ensure day-to-day maintenance of the Ship and associated properties prior to a more long-term solution. The action also provides funding to prepare a plan to address the most urgent repairs on the Ship.
The City continues to hold the previous operator responsible for Shipboard repairs through the bankruptcy process and will pursue every legal avenue available to ensure the protection of the asset and address any potential wrongdoing or Lease violations. The City has also released a Study Session Report on July 20, 2021, that has outlined short-term and long term next steps:
Short-term next steps:
- Work with Harbor Department staff to complete engineering assessment of alternatives for the long-term disposition of the Queen Mary (90 days est.) and return to the City Council with updated projected costs.
- Further, evaluate potential Pier H transfer to Port and return to the City Council for direction.
- Complete critical repairs identified by recent inspections and reopen the Queen Mary Hotel and tours to visitors in 2022.
- Work with the Harbor Department to jointly negotiate short-term agreements (1-3 years) for hotel and special event operations to reopen Queen Mary while developing long-term recommendations.
Long-term next steps:
- Work with Harbor Department to develop organizational and budget models including ongoing management of: hotel, special events, filming, and landside development.
- Initiate RFP processes for long-term hotel and special events operations.
- Re-establish a non-profit foundation to assist with donations and offers to assist with historic preservation, education, and art collection.
- Prepare a master plan for landside development including environmental due diligence, zoning, and RFP for long-term ground lease.
Finally, on September 14, 2021, a recommendation was made to the City Council to authorize the City Manager, or designee, to engage in negotiations with the Harbor Department for the transfer of the operation and control of “Pier H” from the City Council to the Harbor Department.
Related Documents Timeline
Official City of Long Beach Statement Regarding the Queen Mary
Queen Mary Inspection Report Update to City Council
Queen Mary Economic Impact Report
Update on Queen Mary Lease Management
Update on Queen Mary Projects and Long Beach Cruise Terminal Dome
Royal Treatment: How Urban Commons Is Restoring the Queen Mary
Queen Mary Update to City Council
The Future of the Queen Mary
Public Invited to Provide Input on Future Development of Queen Mary Area
City of Long Beach Welcomes New Master Lessee to the Queen Mary