A bar and two restaurants on the Queen Mary will be open to serve the first returning hotel guests starting May 12, a formal “grand opening” event for the ship will be held in June, and weekend brunch will be back in July, city officials said yesterday.

Repair projects, hiring staff and other preparations for a broader reopening of the ship, which was closed for nearly three years, may cost the bulk of the $12 million the city will get from the Port of Long Beach through a deal that was finalized Tuesday by the City Council.

The deal entails the city giving control of nearly 14 acres of land to the port, which will lease the parcels out for harbor-related uses; in exchange, the city will get a $12 million advance, to be repaid from its 50% share of lease revenues.

The Harbor Commission blessed the arrangement last month, and the City Council unanimously approved it Tuesday night.

The Observation Bar, Promenade Cafe and Chelsea’s Chowder House will open as hotel stays resume, with a grand opening set for June 8 and brunch service starting July 2, the council heard Tuesday.

City staff will have more details on how the advance from the port would be spent in the 2024 budget, but, “We expect it to do things like help with the reopening budget,” City Manager Tom Modica told the council.

“We’re going to help grow tourism and hospitality. We’re going to look for things on the ship that generate revenue so we can use the revenue to create more revenue” that can be reinvested in the ship, he said.

In the past few years, the city has spent $5 million on maintenance including removing deteriorating lifeboats and fixing the bilge pump system, plus another $3 million for a nearly completed study of the hull and ballast tanks. But there’s a long list of work still to be done, and a staff report for Tuesday’s meeting indicated that the majority of the advance from the port, $7 million, would be used this fiscal year.

City leaders appear to be all in on trying to make the ship profitable and want to explore the potential for development of about 43 acres around it, something previous operators have repeatedly promised and failed to achieve, leaving the city on the hook for costly maintenance.

The $12 million oil property lease deal appears to lay to rest, at least for now, the suggestion that the city might shift control of the Queen Mary to the port, and Modica shot down the idea of spending more than $100 million to scrap the ship.

Residents sometimes ask, “Why don’t you just get rid of the Queen Mary — why put one more dollar into it,” he said. But a 2021 city-commissioned study found it could cost at least $105 million to remove the vessel, there’s currently no funding for that, and the process could take several years and would involve disposal of asbestos and other hazardous materials, so, “That really is not a choice,” Modica said.

The same study found it could cost between $150 million and $175 million to maintain the ship for the next 25 years. The costs of keeping the ship for the next 100 years could reach $500 million.

On Tuesday, city officials said the $12 million advance from the port will likely be spent in three years but could take the city more than a decade to repay.

A report to the council projected about $2 million a year in revenue from leasing the city parcels, which are mostly disused oil production land; the city’s half of the money would go to pay off the advance and the 5% interest it will carry.