Floating a New Deal : Long Beach Council Will Take Control of Queen Mary

The Long Beach City Council voted Tuesday to take control of the Queen Mary and lease it to a new operator, ending months of uncertainty and haggling over the future of the landmark.

The action, approved on an 8-1 vote, calls for transfer of the ship at the end of the year to the city from the independently governed Harbor Department, which wanted to sell the vessel to a Hong Kong firm for $20 million.

Under terms of the agreement, the Harbor Department is to give the city $6.5 million to repair the money-losing attraction. It also is to transfer to the city 85 acres of land near the Queen Mary containing restaurants and other businesses that generate about $840,000 in annual lease revenue.

Council proponents say the ship is key to the city’s tourism industry, helping to bring conventions and millions of tourist dollars to Long Beach.

“It’s the only attraction we have in the community that has a national reputation,” said Councilman Tom Clark.

Councilman Jeffrey Kellogg cast the lone vote against the transfer. His position was backed by Mayor Ernie Kell who does not have a vote.

“I think it’s high risk for the citizens of this city,” Kell said.

The council approved a five-year operating lease with Queen Mary Partners Ltd., a group headed by Joseph F. Prevratil who oversaw the ship’s operation in the mid-1980s. He is now a city consultant overseeing the expansion of Long Beach’s convention center, and is co-owner of a Riverside hotel.

Queen Mary Partners will pay the city $165,000 the first year, and $240,000 a year thereafter, along with a percentage of food and beverage revenues.

The current operator, the Walt Disney Co., paid $106,014 on its lease last year, officials said.

City officials are pinning their hopes on Prevratil to change the fortunes of the money-losing tourist attraction. He ran the Queen Mary for the Wrather Corp. until Disney bought the firm in 1988.

Prevratil plans to draw more people and dollars to the Queen Mary by eliminating the $8 admission price, installing low-cost children’s rides and staging concerts and other events in the Spruce Goose dome.

Disney decided not to renew its lease after reportedly losing as much as $10.8 million a year on the ship.

Disney has trimmed its Queen Mary operation in recent months, closing the ship’s hotel and banquet services. About 900 of 1,200 full-time and part-time employees have lost their jobs.

Prevratil, who intends to reopen the Queen Mary Hotel within 60 days, said his plan will create at least as many jobs as were lost in the last several months.

If Prevratil fails, the cash-strapped city could end up having to pick up at least part of the tab. But the city could sell the ship to recoup any losses, officials said.

The fate of the ocean liner was thrown into question last March when Disney announced that it was leaving town.

Soon after, the Harbor Department commissioned a study that indicated the rusting ship needed nearly $6 million in immediate repairs to make it safe, and $21 million in additional work within five years. After that, the ship would need about $5 million in annual maintenance.

Harbor officials then solicited and received 18 bids from prospective buyers.

The majority of the Board of Harbor Commissioners was prepared to sell the Queen Mary last September, saying the high repair and maintenance costs would make it too difficult for an operator to turn a profit.