Queen Mary Requires $27-Million Face Lift : Recreation: Disney agrees to operate the attraction through the end of the year. But the expense of the needed repairs and maintenance could sink Long Beach’s chances of keeping the ship.

The historic Queen Mary ocean liner has gotten a reprieve until the end of the year, but it needs $27 million in repairs and maintenance, an expense that could doom the ship’s future in Long Beach, officials said.

On Monday, city officials reached an agreement with Walt Disney Co., the operator, to run the ship until the end of the year, although the 365-room hotel and banquet service will be closed.

The city hopes to find a new operator or buyer by the end of the year, but a consultant has determined that the expense of repairing the ship would make that task difficult.

Parts of the Queen Mary are badly rusted and deck portions are buckling. Pipes in the city-owned ship’s firefighting system leak, and potentially hazardous asbestos is present in some areas of the ship, according to a recently released study by Economics Research Associates of Los Angeles.

“The lack of a definitive maintenance schedule caused the general deterioration of the vessel,” the consultant’s report said. About $6 million in repairs need to be made immediately, and the remainder within the next five years, the report said.

The problems of the ship, which was launched in 1934 as one of the world’s most luxurious ocean liners, present no immediate danger, said Robert G. Rados, the marine engineer who oversaw the physical assessment.

But one council member contends that the needed repairs and maintenance virtually assure that the Long Beach landmark will not stay in the city. Though owned by the city, the vessel has been maintained by the city’s Harbor Department since 1980.

“They’ve let the thing rust and corrode and deteriorate,” council member Warren Harwood said. “We really are in a hole.”

The study concluded that because of the needed repairs, the ship would be profitable only if it were turned into an entertainment center featuring a high-grossing card casino. The casino would be a small version of the Bicycle Club in Bell Gardens.

“It’s difficult for any project to support such high up-front capital costs,” said John W. Robinett of Economics Research Associates.

Aside from a casino, the only other economically feasible options are to sell, scrap or sink the landmark, the consultant said.

Harwood, a proponent of keeping the Queen Mary in Long Beach, said local residents may not want a casino. He said he plans to investigate whether city officials allowed operators to avoid costly maintenance and repairs over the years. “It’s the worst kind of mismanagement because it’s an asset belonging to the public,” Harwood said.

Proponents of keeping the Queen Mary in Long Beach note that the ship and its related attractions, including the Spruce Goose exhibit, provide 1,100 jobs. The city is scheduled to lose the legendary Spruce Goose airplane, which sits in a dome next to the Queen Mary. Its owners are negotiating to move the plane to a museum in Oregon by the end of September.

About 40% of the 1,100 employees at the attractions will lose their jobs once the hotel is closed and the Spruce Goose is moved, a union representative said Monday. David L. Hauser, president of the Board of Harbor Commissioners, acknowledged that the ship could have been better maintained. But he said neither the city nor the ship’s operators could be blamed for not wanting to pour more money into the vessel.

“If it’s a losing proposition year after year, you have a hard time getting anyone to dig into their pocket and put up considerable money,” Hauser said.

The attraction has lost money in all but one of the last 10 years, according to the consultant’s report. Disney, which has operated the ship under a lease since 1988, lost as much as $10.8 million a year, the report said. Nevertheless, harbor officials persuaded Disney to pay for some maintenance, mostly painting.

Richard K. Steinke, the Harbor Department’s director of properties, said he did not know how much of the $27 million in repairs and maintenance would remain to be done once Disney finished. But Steinke said Disney and past operators had paid their fair share and he did not intend to pursue the matter.

The ship was built in Scotland and launched by Cunard Steamship Co. Ltd. in 1934. It was converted to a troop transport during World War II, and moved 800,000 Allied soldiers. The ship resumed its life as an ocean liner after the war.

Long Beach purchased the Queen Mary for $3.45 million in 1967, and then spent $66 million over the next four years to refurbish it. The ship includes restaurants, shops and exhibits as well as the hotel and banquet center.

Some repairs and overdue maintenance date back to when the ship was converted into a tourist attraction.

Most of the ship’s bulkheads were removed more than 20 years ago during the conversion. Bulkheads are watertight compartments in the hull of the ship that are designed to keep it from sinking if a leak develops.

Those bulkheads must be replaced to keep the moored ship from sinking in 11 feet of water if a significant leak develops at high tide, the consultant’s report said.

Other problems have developed over the years, including the leaks in the ship’s firefighting system and the deteriorating asbestos.

Rados, the marine engineer, said the leaks would not significantly affect the ability to fight fires aboard the ship. But he said the leaks need to be repaired and the system replaced within five years.

Rados also said potentially dangerous asbestos insulation needs to be removed from some of the ship’s empty boiler rooms. Disney spokeswoman Jennifer Blazey said the company samples the air in the rooms four times a year to ensure that the asbestos does not present a health hazard to visitors or workers.

The South Coast Air Quality Management District sent an inspector to the boiler rooms last year but he found no problems, a spokeswoman said.

Long Beach Mayor Ernie Kell said he wants to see the property developed into a quaint marketplace or some other development that would bring more jobs and tax revenue to the city.

The Board of Harbor Commissioners is expected to decide the fate of the Queen Mary in the next few months. “We can do much better with that property than we do today,” Kell said. “The mismanagement would come in trying to save the ship.”