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Monday, July 4, 2022

Council approves Queen Mary’s hospitality contract; filming for the October opening

The Long Beach City Council on June 21 approved a new contract with one of the nation’s leading hotel management companies to oversee the operations of the Queen Mary, finally paving the way for the ship to reopen after more than two years of inactivity.

“We are one step closer to the grand opening of our Queen Mary,” said City Councilwoman Mary Zendejas, in whose area the ship is located. “I hope we can bring our Queen Mary and what she brings to our city to life.”

The Queen Mary was originally closed to the public in 2020 due to the COVID-19 pandemic, but the World War II ship had already fallen into disrepair under the management of its previous operators, Urban Commons, causing the ship to continue operating. closure.

Urban Commons filed for bankruptcy and abandoned its lease for 66 years in 2021, returning Queen Mary to city control for the first time in 40 years. Years prior, the city had given Urban Commons $23 million to overhaul the ships, but a 2021 city inspection found that those repairs were never completed.

An earlier report prepared in 2017 suggested that all necessary repairs, including work on the ship’s hull and load-bearing frame, could cost between $235 million and $285 million.

In April, Long Beach removed 20 worn lifeboats from the Queen Mary that were degrading the ship’s structural integrity, overloading her with almost 100 tons of extra weight, a major milestone in a critical overhaul needed to open the ship to the public. city ​​press release from mid-May.

These improvements were needed by the city to prepare the ship for its reopening, which the city plans to hold in October.

Evolution, a hotel company, will operate the Queen Mary Hotel and oversee repairs costing approximately $1 million to ensure a safe reopening, including replacing the ship’s boilers, elevator and toilet, plumbing repairs, and parking upgrades.

Evolution will also be responsible for the ship’s general maintenance and Queen Mary-related activities for five years, according to a staff report presented at a council meeting on Tuesday.

However, Long Beach will continue to oversee the major overhauls needed to fully restore and preserve the Queen Mary. The city will also handle programming at the nearby Harry Bridges Special Events Park.

This, as city manager Tom Modica said at a June 21 council meeting, is the essence of what sets this latest Queen Mary contract apart from the city’s previous lease agreements.

“Over the past 40 years, we have really tried to manage this asset by shifting all the responsibilities and benefits to a private company,” Modica said. “Usually they had to pay for that right — so they had a lot of debt to do so.”

This long-term lease model, especially in the case of Urban Commons, has proven unsuccessful, Modica said, prompting the city to look for alternative, shorter contracts.

“What we are doing now is essentially eliminating this middle partner,” he added. “Now we have more responsibilities, but now we can also get some benefits.”

The staff report says it will cost about $2,870,500 to cover all pre-opening improvements and reopening costs. This money will come from the city’s Tidelands Area Fund Group.

Under the terms of the contract, Evolution will be subject to frequent financial audits and will be required to submit monthly financial statements. Evolution is also required to submit an annual budget by October 1 of each year, according to a staff report.

Evolution, the staff report says, suggests that revenues from Queen Mary’s operations will fully offset any city investment by 2023, with the city’s estimated profit approaching $1 million by then. In 2024 and beyond, net revenue is projected to exceed $7 million annually, according to a staff report.

“The $7 million forecast is conservative,” Vice Mayor Rex Richardson said during an overnight council meeting on Tuesday, noting that the estimate does not include revenue from other activities and events held off the ship but in close proximity to ” Queen Mary”.

A May 13 Long Beach press release said the next phase of the overhaul currently underway includes upgrades to the ship’s bulkheads and bilge pump system. These fixes will further strengthen the structure of the Queen Mary and help prevent damage in the event of a flood on board.

The contract, approved by the City Council, will go into effect July 1 for preparatory work. It will be extended for a five-year period after the opening of the ship on 1 October.

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