Study Shows Card Club Is Best Bet for Queen Mary : Development: City and harbor officials will consider the option, but they say they may end up selling or scrapping the ship. The consultant says the casino option is the most likely to turn a profit.
A consultant’s recommendation to turn the Queen Mary ocean liner into an entertainment center featuring a card casino has drawn a guarded response from city officials.
Economics Research Associates of Los Angeles on Tuesday released its study of potential uses for the Queen Mary. The consultant said an entertainment center was the most likely option to make money--if it included a card casino. The entertainment complex also would have stores, restaurants and nightclubs.
Mayor Ernie Kell and David L. Hauser, president of the Board of Harbor Commissioners, said the gambling boat proposal deserved further consideration. But they said they probably will favor eventually selling or disposing of the Queen Mary to enable the city to develop its 55 acres of oceanfront property into a quaint shopping district or some other revenue-producing complex.
Another study, to be finished in October, will focus on ways to develop the Queen Mary site and the surrounding area with or without the Long Beach landmark. The options include using the site for a cruise ship terminal, or for a giant aquarium.
“I think the city can make more money and its citizens would use (the site) more if we redevelop the site,” Kell said.
Councilman Warren Harwood favors keeping the Queen Mary in Long Beach, but he also questioned whether a card casino--a small version of the Commerce Casino and Bicycle Club in Bell Gardens--would be good for Long Beach.
He said he would seek feedback from his constituents.
“A card club is really a radical departure.” Harwood said. “We were talking about a major theme park for families and children.”
Walt Disney Co., which operates the Queen Mary and Spruce Goose, proposed building an oceanside theme park in Long Beach. But the entertainment company earlier this year abandoned the proposal.
Disney also decided to stop managing the Queen Mary and related facilities at the end of September. Disney has been operating the attraction at an estimated loss of $7 million to $8 million a year. The city is negotiating with Disney to continue operating the Queen Mary until the end of the year.
City officials hope to have a new operator or buyer by that time. Long Beach officials recently sent out requests for proposals to prospective buyers or operators of the Queen Mary, said Dick Steinke, director of properties for the Port of Long Beach. The deadline for those proposals is Aug. 24.
The Spruce Goose will be moved to Oregon by fall to be a centerpiece of a new museum of historic planes.
The ERA report released Tuesday said the Queen Mary and Spruce Goose attractions, including the ship’s hotel, would continue to lose money if kept intact. Attendance at the tourist attractions has declined and would continue to drop, the study said. Operating losses would range from $3.4 million to $10 million a year during the next 10 years. The projection does not take into account the loss of the Spruce Goose, which boosted attendance when it was installed next to the Queen Mary.
The consultant also ruled out the following uses as unprofitable or too risky:
* An entertainment center without a card club.
* A time-share resort.
* A maritime museum.
The $4.8-million annual cost of maintaining the Queen Mary makes it difficult to turn a profit, the consultant said.
But if the Queen Mary were turned into an entertainment center with a card club, it would generate net operating income ranging from $10.5 million to $22 million during each of the first 10 years of operation, the ERA study said. It also would provide an estimated 841 full-time jobs. The Queen Mary facility now employs about 1,100 full- and part-time workers, the equivalent of about 650 full-time positions, ERA said.
But there is a significant barrier to turning the Queen Mary into a gambling ship: It would need $27 million in repairs and maintenance, including the removal of asbestos and the repair of corroded metal, the ERA report said. The consultant recommended that $6 million of that work be done as soon as possible, and the remainder be performed in the next three to five years.
The report also estimated the costs of other options: selling the Queen Mary, mothballing the ship and keeping it in the port as a city icon, and scrapping or sinking the vessel.
The ERA report estimated the city could sell the Queen Mary for $3.8 million to $4.5 million. But it would cost about $4 million to remove the ship from the breakwater that surrounds the ship, and to remove some asbestos-containing material from the ship.
Mothballing the ship would cost $1.4 million with annual maintenance costs estimated at $1 million to $2 million.
Sinking the vessel and making it into an artificial reef would cost about $4.7 million. The biggest expense would be removing the ship from the breakwater.
Scrapping the Queen Mary would cost between $7 million and $10 million, the report said. The steel, brass and copper scrap would sell for about $884,000.
