The Queen Mary will receive a $12 million face-lift after the city and Port of Long Beach (Port) announced an anticipated partnership Monday, April 24. The $12 million is being loaned to the city from the Port in order to fund the ship’s reopening operations, complete infrastructure repairs and undergo restoration projects.
The deal will allow the Port to use nearly 14 acres of land that’s currently being used for oil operations and lease it to customers. Revenue from the newly leased land will be split between the city and the Port, though the city will be using its half of the revenues to repay its loan for the foreseeable future.
Long Beach city council will have the final say on whether to approve or deny the proposed deal when it’s presented to the body next month. The Harbor Commission gave its approval on April 19.
“All cities have big challenges, but when we work together we can find solutions,” said Mayor Rex Richardson. “This creates more opportunities at the Port. When the Port does well, the city of Long Beach does well; it creates revenue streams to help offset oil revenues that are anticipated to decline and it helps inject much-needed resources in our Queen Mary. That’s a win-win.”
Once the loan is repaid, Richardson expressed interest in using the revenues to develop the rest of the land surrounding the Port—roughly 43 acres. City Manager Tom Modica said it will be “several more years” before that happens.
The 13.9 acres of land to the west of the ship will be taken from Long Beach Energy Resources and transferred to the Port for non-oil uses. Some of the operations will continue, but be shrunken down, Richardson explained, while most of it will be leased to Port customers.
“Certainly we have terminal operators who operate our terminal [as] options, but we also have a number of other logistical companies and we believe that this land will attract many many suitors in the years ahead,” said Noel Hacegaba, deputy executive director of administration and operations for the Port of Long Beach.
The city is hoping the repairs and revenue from land leases will help return the Queen Mary to a profitable tourist location rather than a financial squander. According to Modica, the ship was generating $68 million in the last year prior to closing. However, a 2017 marine survey identified up to $289 million in long-term needed repairs and it’s unclear where that money will come from.
Part of the problem for the last several decades has been the carousel of failed operators, two of which filed for bankruptcy and one of which defaulted on their loan and sapped $23 million in city funds. In June 2022, Long Beach agreed to take the Queen Mary back under city control, with Evolution Hospitality running operations.
Revenue from the operations mostly goes to the city, with Evolution Hospitality receiving a portion. In order to complete critical repairs and reopen to the public, the city funneled $3.6 million for installing an emergency generator, updating lighting fixtures and adding boilers to provide hot water.
“[This agreement] will be key to implementing strategies and policies that will facilitate our future and economic success by diversifying the local economy and establishing new revenues and growing targeted industry sectors,” said Vice Mayor Cindy Allen. “This will also be a focused effort in the city’s shift away from fossil fuels. The 13.9 acres are former oil-operating properties and will strengthen and grow transportation and logistics at the Port. And of course, new revenue streams will be created by private lease-holders.”
The Queen Mary opened its doors for limited tours in December of last year and there are plans to begin restaurant and hotel operations the week of May 12, Modica said.
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