Port might not be able to meet financial obligations with control of Queen Mary, state commission says

A state agency charged with protecting resources on public land is urging Long Beach to consider the impact to the Port of Long Beach as the city weighs a controversial plan to transfer control of the Queen Mary land to the Harbor Commission.

The Long Beach City Council in April voted unanimously to explore possibly transferring control of Pier H, which includes the historic Queen Mary, the Long Beach Cruise Terminal, Hotel Maya and other businesses, to the Harbor Department that oversees the Port of Long Beach.

The deteriorating Queen Mary, however, needs millions of dollars in critical safety repairs and the plan to transfer the ship to the Harbor Department is facing pushback from union groups and other stakeholders concerned about the impact to the Port’s budget.

Now, the California State Lands Commission says it is also concerned about possible impacts to operations if the Port of Long Beach is faced with a massive Queen Mary repair bill.

In a letter addressed to Long Beach City Manager Tom Modica on Tuesday, Reid Boggiano, a lands program manager for the agency, said the city should do a thorough fiscal review before considering the transfer.

“The Port has made significant progress, guided by its Green Port Policy, in reducing harmful air emissions, improving water quality, and implementing environmentally sustainable practices throughout the Port,” Boggiano wrote. “Without a thorough review and analysis of the impact of the Queen Mary transfer to the Harbor Department, it is unclear whether the Port will be able to meet its stated goals, including helping the region and state in its economic recovery and continuing to invest in its strategy to reduce the negative impacts of Port operations in an aggressive and comprehensive manner.”

The city in a statement Wednesday said it is reviewing the State Lands Commission letter to “identify any role that they will play in a potential transfer” and will report back to the City Council  in July.

“We agree that a detailed review is needed, which is exactly what the Port is engaged in per the City Council’s request,” said Modica in a statement.  “The Port has asked for some additional time to complete that analysis, an extra 30 to 45 days, which the city supports in order to take the time necessary to really review all the components of Pier H.”

It is unclear what action the commission could take if Long Beach were to move ahead with the plan. State Lands Commission spokesperson Sheri Pemberton on Wednesday said the agency does not have the authority to block the transfer.

But the commission in its letter said that it could exercise its authority “through various mechanisms, including through letter requests and collaboration with the trustee.”

The move to transfer the ship comes as the Queen Mary’s former operator chose to give up its lease last week in Delaware bankruptcy court, putting Long Beach in charge of the ship’s daily operations for the first time in more than 40 years. Long Beach owns the Queen Mary but for decades has leased the ship to various operators who have struggled financially.

The city is now faced with tough decisions as an inspection report in April determined the ship would need at least $23 million in repairs to remain viable in the next two years.

On Tuesday, the City Council unanimously approved $2.5 million for initial Queen Mary operations and repair work plans, but the ship will need a minimum of $5 million to cover immediate repairs. The city is working to identify funding sources and is expected to present plans to the council next month.

Meanwhile, city officials have said the Harbor Department is better equipped to handle the Queen Mary management and development of the surrounding land. The city is conducting a study to determine the feasibility of transferring the land and is expected to report back next month.

The process includes a multi-disciplinary team from the Harbor Department that will review the initial improvement, operational and staffing costs, according to a city memo.

The California State Lands Commission in its letter noted that the Port of Long Beach includes public trust lands and that the city is entrusted with managing those lands to the “benefit of all the people of California.”

“…the City has a fiduciary duty to balance competing public trust needs and priorities and demonstrate that the proposed transfer would not impair the Port’s management of the state’s public trust lands and resources that are under its jurisdiction,” according to the agency.

The Harbor Commission last month approved a $622.4 million budget for the Port of Long Beach, of which about half will go to ongoing capital improvement projects, including the modernization of terminals, rail, bridges and other infrastructure. Over the next 10 years, the port plans to invest nearly $1.6 billion in capital improvement projects.

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Kelly Puente is an award-winning general assignment and special projects reporter at the Long Beach Post. She has worked as a journalist in Long Beach since 2006, covering everything from education and crime to courts and breaking news. Kelly previously worked at the Long Beach Press-Telegram and the Orange County Register before joining the Post in 2018. She is currently pursuing a master’s degree in public policy and administration at Cal State Long Beach. Reach her at [email protected].
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