Los Angeles Real Estate Firm Takes Over Queen Mary Lease

File photo. 

In a unanimous vote last night, the Long Beach City Council approved a new 66-year lease for The Queen Mary and designated a new successor lessee to the Garrison Investment Group, which has served as the operator of the ship for almost a decade.

Urban Commons, LLC will take over the historic landmark, which has had a rocky history with ownership of late. Garrison took over operations of the ship when Save the Queen, LLC defaulted and was bought out by Garrison. Since then, the group has made nearly $13 million in capital investments to the ship, including renovations to the restaurants on board and aesthetic improvements to the paint and decks of The Queen.

“Since 2009 the status of The Queen Mary can only be described as a success,” said Director of Economic and Property Development Michael Conway during a presentation Tuesday night. “City staff believe that Garrison has done an extraordinary job of maintaining and improving its unique and world renowned icon, and with Evolution as its operator, has significantly enhanced the reputation of The Queen Mary and consequently, the city of Long Beach.”

However, Garrison never intended to be the long-term operator of the ship when it assumed ownership in 2009 and thus embarked on an “exhaustive” search for a successor lessee. The Los Angeles-based Urban Commons, a real estate and investment development firm which has holdings across the country, was identified as that successor.

Mayor Robert Garcia said that the new lease represents a chance to build something “spectacular” for a part of downtown that has remained dormant and often empty. Discussions on what those plans might entail will include meetings with the recently-formed Queen Mary Task Force in the coming months. Garcia praised Garrison for its efforts to improve the ship under its watch but said now the focus needs to be on the future and how to continue to develop it in was that is appropriate and respectful of the ship’s history.

“When you think about the value that that ship has you can’t really put a price on the cultural icon that it really is,” Garcia said. “To finally get to a point where we’re going to look at the land surrounding the ship and develop it in a way that’s appropriate, that’s community oriented, that maximizes the space but also brings more people into the ship while reinvesting back into the ship and to the dome is critical.”

The new lease includes provisions for a heritage fund to be created to support historic preservation of artifacts on the ship and leasing the Spruce Goose dome outright to Carnival Cruise for its desired expansion of operations. A minimum rent of $300,000 monthly and a percentage rent of 10 percent of operating revenue from the ship are written into the lease, however, that sum is only payable after Urban Commons receives a 9 percent annual return on its initial investment. Most of the money generated is set to go back into the ship and surrounding properties in the form of capital improvements. 

This, along with the agenda item not including any mention of The Queen Mary led former deputy city attorney Jim McCabe to question the legality of the listing for what he characterized as a “sweet deal” for Urban.

“The agenda item doesn’t even mention The Queen Mary. If you’re familiar with operations agreement 22697, that’s fine,” McCabe said, referring to the lease number for The Queen Mary listed on the agenda. “But the general public is not familiar with that. This is a clear violation of the Brown Act and I think it should be of concern to all of you. If it’s found to be not sufficient, what you do here tonight will be null and void.”

McCabe’s comment about the Brown Act, a state law that guarantees the public’s right to attend and participate in meetings, was quickly dismissed by current city attorney Charles Parkin. Parkin pointed out that the government code mandates a general brief description of items to be discussed or acted on be provided in the agenda in advance of the meeting.

“Clearly, the item being discussed is the amended and restated lease and it provides the exact lease number,” Parkin said.

The new lease calls for land development and upkeep for the currently underutilized areas around The Queen Mary. Vice Mayor Suja Lowenthal, who represents the district that the ship calls home, said that the area has always had the potential to be so much more, and with all the attention given to revitalizing the downtown area, it’s now time to pay the same respect to one of the city’s biggest cultural icons.

“This is the best thing that I have seen for The Queen Mary in the entire time that we have discussed this,” Lowenthal said. “To bring her back to her glory, she is nearly back, and I have to thank Garrison for that. They’ve done a good job of stepping into a management role for The Queen Mary and surrounding properties even though it was not their original role or mission.”

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Jason Ruiz covers City Hall and politics for the Long Beach Post.