Geraldine Knatz was the Port of Long Beach’s planning director in the early 1990s when she first stepped into the depths of the Queen Mary with a team of engineers to assess the aging ocean liner’s condition.

What she found was shocking.

A blanket of rust caked the inner hull, while a “corrosive soup” of metal and discarded debris mixed in standing water. At one point, Knatz said, she leaned her arm on a metal slab and a large chunk cracked off and fell into the iron abyss below.

After the grim tour, they reached the same conclusion that marine engineers would confirm years later—the ship was rotting from the inside.

“I couldn’t wait to get out of there,” Knatz recalled.

At the time, the Walt Disney Co. was leasing the Queen Mary from the port and was unhappy with the ship’s condition, Knatz said. So, like earlier lease operators, Disney bailed, leaving the port with a deteriorating vessel needing millions of dollars in repairs.

Hoping to be rid of the ship, the port solicited offers from several prospective buyers, the best being a $20-million proposal from a business in Hong Kong to move the Queen Mary there. Knatz said her boss at the time, former port Director Steve Dillenbeck, even flew overseas to negotiate.

Although Knatz said there were concerns the ship might not survive the trip across the Pacific, port officials remained hopeful a deal could be struck.

“We felt this was the best option financially for the port and city because it could generate some revenue and it would be somebody else’s problem to deal with,” she said.

But port officials had underestimated city sentiment about the Queen Mary. Long Beach at the time was losing its historic naval station and aircraft industry, and many residents weren’t ready to let go of a longtime landmark.

After days of debate, the City Council voted in 1992 to “save the queen” and transfer financial responsibility from the port back to the city for the first time since 1978.
As part of the deal, the port agreed to pay $6 million for repairs and throw in the surrounding land, known as Pier H, for future development.

If polled today, those sentimental Long Beach residents might have a different take on the matter.

Three decades and numerous operators later, the Queen Mary is in worse shape than ever. City officials are once again trying to figure out what to do next as they confront huge sums in critical repairs after the financial collapse of the ship’s most recent leaseholder, Urban Commons.

City Hall’s latest plan—with no apparent backup—is to transfer financial control of the Queen Mary back to the port, which would oversee the development of Pier H in the hopes of generating revenue for the ship’s repairs. But that scenario, which is being pushed by Mayor Robert Garcia, is fraught with assumptions and uncertainties.

The only sure thing is this: keeping the Queen Mary viable is going to take a lot of public money and a lot of years.

“It’s history repeating itself,” Knatz said of the plan to return the Queen Mary to the port. “We’ve come full circle and it’s like we’re kicking this can back and forth across the bay.”

No matter who runs the 81,000-ton vessel, whether it’s the city, the port or a private operator, critics fear the future will look just like the past—promises that have gone unfulfilled.

“Ultimately, I just don’t see a path to success, whether the city is operating the ship or the port,” said John McLaurin, president of the Pacific Merchant Shipping Association. “It’s going to require hundreds of millions of dollars in investments and its future is still uncertain even after that.”

A bumpy bureaucratic voyage ahead

Long Beach has owned the Queen Mary as a hotel and tourist attraction since its arrival from Southampton, England, in 1967. For decades, the city has leased the ship to operators who have struggled to make a profit and, in some cases, failed to properly maintain the vessel.

Today, following the demise of Urban Commons, the city does not have a Queen Mary leaseholder for the first time in 40 years. As a result, it is fully on the hook for the ship’s mounting costs.

A report from marine engineering firm Elliott Bay Design Group, which inspected the ship in April, says the Queen Mary would need $23 million in urgent safety repairs to stay “viable” over the next two years alone.

Mayor Garcia and other city officials believe the port is best positioned to operate the ship and develop the Pier H property because of its experience handling leases and capital projects on coastal land. Since the mayor appoints all five members of the Harbor Commission, which oversees the port, his approach has a good chance at success.

Behind the scenes, however, multiple sources have said port officials are not eager to assume responsibility for what’s been described as a “floating money pit.”

“They don’t want it, for crying out loud. Their plate is full,” former port executive Knatz said of the Harbor Commissioners, who already have approved $1 billion in port improvements over the next decade. “But they really don’t have a choice, considering they’re appointed by the mayor and it’s their job to serve the mayor.”

The State Lands Commission, in a June letter to the city, raised concerns that the port might not be able to meet its other financial obligations if it’s saddled with Queen Mary costs.

Although the agency doesn’t have the power to stop any city transactions, it could take legal action if it believes Tidelands funds are not being used for public benefit. That pot of public money is earmarked for maintenance and development of beaches, waterways and capital improvement projects in coastal areas.

“We want to make sure the city is doing a thorough analysis of the costs,” said Reid Boggiano, a lands program manager for the agency, which is charged with protecting resources on public land.

Sources have said that, as a condition of taking over the Queen Mary, the port might push the city to pay for some of the repairs—most likely using Tidelands funds. At this point, the city insists no money will come from the general fund, which pays for city services, including public safety.

A major question clouding the Queen Mary’s future is exactly how much the ship’s rehab would cost. A marine survey in 2016 found that the Queen Mary would need up to $289 million in repairs in the next five to 10 years. But at the start of 2022, few of the recommended structural issues have been fixed and their cost would likely be higher because of the ship’s continuing deterioration.

This month, city and port officials were negotiating to hire maritime industry giant Lloyd’s Register to perform a comprehensive structural assessment of the ship—the first since the 2016 survey. It’s unclear when the project would get underway.

Harbor Commission President Steve Neal said the port wants to do its due diligence before voting on whether to take financial control of the Queen Mary. “It’s hard to speculate on what the possibilities could be for the ship at this point,” he said, “because we don’t know what we’re dealing with.”

Agreed Commissioner Bonnie Lowenthal: “I look forward to a further understanding of the Queen Mary prior to any agreement.”

A vote is expected next year.

In the meantime, millions of dollars in Tidelands funds will now be used for repairs, some of which city leaders had hoped would be completed by this month but only recently secured the funding for them.

Earlier this month, the State Lands Commission approved a city proposal to spend $5 million in Tidelands funds for three projects. That will cover $2.5 million the City Council approved in June for them, and the city will need to approve an additional $2.5 million next year.

The projects, now estimated to be completed by next spring, include removing 22 dangerously corroded lifeboats, two of which are originals that will be kept in storage for historical assessment. The city also will install 11 bilge pumps and an alarm system to prevent flooding. Five bulkheads that were cut and modified to accommodate visitors will be rebuilt.

So far, no date has been set to reopen the ship, which will likely remain closed until at least next summer if repairs are completed on schedule—an open question based on earlier missed timelines.

Every month, the city is spending hundreds of thousands dollars just to keep the Queen Mary operational during its shutdown. The ship is generating about $20,000 a month as a TV and film location but otherwise is not bringing in any money to offset costs. Before its closure, the Queen Mary was generating about $6 million a year in revenue, officials said.

In addition to $1.4 million in annual insurance payments and a $2.4 million bond payment this year, the city is spending nearly $300,000 a month in a contract with Evolution Hospitality, a company that for years has provided day-to-day security and management of the ship.

The monthly costs include a $20,000 caretaker fee, $11,630 in landscaping and $7,500 for “historic resources consulting” by longtime Queen Mary consultant John Thomas.

Councilwoman Suzie Price, whose 3rd District includes parts of the city’s waterfront, said she’s concerned that the ongoing monthly costs for the Queen Mary could drain Tidelands funds, cutting into lifeguard staffing and beach maintenance.

“I won’t support any item that undercuts public safety and beach resources,” she said in a council meeting earlier this year.

But Price, like the city’s eight other council members, said she does support the transfer of the Queen Mary to the Harbor Commission if it means finally developing the city’s Pier H waterfront.

Officials are hopeful Pier H development could generate enough revenue to pay for ship repairs. But that prospect is likely years away, meaning the city would have to find other funding sources, including using public money or possibly finding a new operator willing to take on the repairs.

Dreaming of development—again

Nestled on 43 acres with a view of the Long Beach cityscape, Pier H is one of the last underdeveloped waterfronts of its kind in Southern California.

For decades, city leaders have dreamed of transforming Pier H into a premier entertainment and tourist destination. But so far, no Queen Mary operator, including Urban Commons, which proposed a $250 million development called Queen Mary Island, has been able to pull it off.

The city is hopeful that the port, with its experience in waterfront capital projects, can change all that. Call it a Hail Mary for the Queen Mary.

The area has a $77 million market value for the 43 acres of land and an annual rental value of $5 million, which could provide revenue to help restore the Queen Mary, officials have said.

The city is hoping to partner with Carnival Cruise Line, which would also like to see a premier waterfront destination to complement its new Panorama ship at the Long Beach terminal.

“There’s a great opportunity to develop Pier H,” said Harbor Commissioner Sharon Weissman. “Depending on what happens, there’s a huge amount of potential revenue.”

While leaders are eager to tout the revenue possibilities of Pier H, they’ve been less forthright about the development challenges and past misfires.

A 2013 assessment from Garrison Investment Group, a former Queen Mary leaseholder, found that developing the land would be difficult because of its isolated location and the construction approvals required from the California Coastal Commission.

Even if the port managed to clear those obstacles, the revenue eventually generated by retail and entertainment construction might not cover the Queen Mary’s massive repair bills because the region is saturated with such developments, said architect Vaughan Davies, who worked on Long Beach’s Rainbow Harbor and the redevelopment of Ports O’ Call Village in San Pedro.

What’s more, Davies predicted that Pier H’s development could draw dollars away from Long Beach’s Downtown Pine Avenue area, which has long struggled to keep businesses.

“There’s the question of should you really be building at the Queen Mary when Downtown retail and entertainment needs help,” he said. “You’d be sucking the life out of Downtown again.”

Davies said a better option would be to develop housing on the property on a separate track from the Queen Mary repairs, although state zoning laws would need to be changed.

“If you want to have a great community,” Davies said, “the ship should not be seen as the baggage that comes with the land development.”

Second District Councilwoman Cindy Allen, who originally proposed transferring the Queen Mary to the port, said she remains optimistic that Long Beach can preserve its icon and revitalize Pier H.

“We’ve had some bad partnerships in the past,” she acknowledged, “but the city and the port are well positioned and I believe we can see that this is developed.”

In an interview, Allen suggested that perhaps the ship could be turned into a casino. But that idea, proposed by past council members, has never gained much traction.

Allen said it would be “inappropriate to speculate” on what could happen to the Queen Mary beyond the city’s current plans to transfer the ship to the port.

(Port of Long Beach Director Mario Cordero canceled a scheduled interview for this report, saying through a spokesman he was too busy to reschedule.)

Doug Drummond, a former Long Beach harbor commissioner and former city councilman who voted against saving the ship in 1992, said the Queen Mary has always held back the development of the land because of the ship’s astronomical maintenance costs.

“One thing that really astounds me is that people do not recognize the incredible costs of trying to keep that ship going,” he said. “I’ve been in the bowels in an orange outfit with a flashlight and a helmet, and I’ve gone to every nook and cranny and I’m telling you she is all used up. There isn’t anyone wealthy enough in the world to restore that.”

During a July City Council meeting to explore possibilities for the Queen Mary, consultant Franc Pigna, who specializes in real estate development for port complexes, acknowledged that tough decisions are ahead for city leaders.

“There really is no cheap option, just the least expensive of several expensive options,” said Pigna, who was hired by the port.

Although the city, led by the mayor, has said it is determined to keep the ship in Long Beach, other options have been floated, ranging from spending $105 million to scrap it to spending $500 million to move it into a new dry dock.

The city also is exploring whether the Queen Mary could be designated by Congress and the President as a national monument, thus bringing in federal dollars for its preservation. But that amount would likely account for only a fraction of what’s needed.

Keeping the Queen Mary as a hotel and museum, Pigna said, would require a combination of revenue from Pier H development and cruise ship passenger fees. Should that development fail to materialize or take years to get off the ground, then the city could face the prospect of having to spend its own funds to finance the ship’s critical repairs.

Wyn Davies, an English maritime historian and naval architect who worked on the city’s 2016 marine survey, said Long Beach has no good escape hatch, especially given the Queen Mary’s rusted hull and other structural issues.

In his view, the Queen Mary will remain a troubling fact of civic life here because “she really can’t be moved ever again without carrying out most of the structural repairs and even then, where would she go?

“Long Beach has to realize,” he said, “they are stuck with a major international icon, which is going to be almost as expensive to dispose of as it is to bring up to scratch.”