Queen Mary Island project pushed back at least 2 years

Plans for Long Beach’s massive Queen Mary Island project have been pushed back by at least two years as operator Urban Commons works to secure permits and other approvals, the Post has learned.

Urban Commons signed a lease to run the city-owned ship in 2016 with the goal of developing the surrounding 65 acres into a $250 million entertainment destination known as Queen Mary Island.

The Los Angeles-based real estate investment and development firm had hoped to finalize the plans by 2020 so it could start construction, but a city letter obtained by the Post this week indicates that Urban Commons won’t have the plans ready for city approval for at least another two years.

In an Oct. 1 letter to Urban Commons, the city addresses the planned demolition of the Village and Marketplace buildings near the ship and notes that the company “does not intend to finalize the entitlements for the Queen Mary Island project within the next 24 months…”

Representatives for Urban Commons declined to comment.

In an interview this week, Long Beach Economic Development Director John Keisler said the project faces additional hurdles since it sits in the city’s Tidelands area and must be approved by the California Coastal Commission under the California Environmental Quality Act.

Keisler said Urban Commons has pushed back the timeline as it works to navigate the complicated regulatory process, but the company has been clear that it intends to move forward with the project.

“One of the challenges in the short term is they’ve realized how complicated and expensive the ship is and how complicated the development environment is,” he said. “But they’re indicating that they’re still all in, and now they’re looking at how they can make it work.”

He said the plans would likely go before City Council by 2022 or 2023, which is a “reasonable time” to obtain permits.

The delay for Queen Mary Island comes as the company faces ongoing challenges in renovating the 80-year-old vessel.

Last week, the city issued another letter to Urban Commons stating that the operator has not met its obligations to maintain and repair the historic ship, and could be in danger of defaulting on its lease agreement if it does not make critical repairs.

The city in 2016 issued $23 million in bonds for emergency repairs to the Queen Mary after significant structural and safety problems were discovered. Under the lease agreement, the money was to be used to fix immediate problems, and Urban Commons was to invest revenue from Carnival Cruise Line passenger fees and other income sources to fix problems.

Many of the projects, however, went significantly over budget and the $23 million was spent before other critical projects could be addressed.

Of particular concern is the ship’s corroded lifeboats that are at risk of falling from the ship or breaking apart, according to a city memo made public Sept. 23. The city is working with Urban Commons to find funding for project, which has an estimated cost of $2.3 million.

Keisler said the lifeboat project is complicated and costly since the boats must be removed by crane and properly disposed of under environmental laws since they likely contain lead paint. Two of 22 boats are original to the ship and must be renovated under historical preservation requirements. The other boats would be replaced with lighter, fiberglass boats.

One of 22 corroded lifeboats suspended on the Queen Mary. Photo by Kelly Puente

One of 22 corroded lifeboats suspended on the Queen Mary. Photo by Kelly Puente

Under the lease agreement, the city could help Urban Commons with finding additional funding for the lifeboats and other critical projects in the form of grants or additional bonds, Keisler said.

“They probably will need our help over time sharing resources, since they’re coming up to speed in a just a couple years on something that is 80 years old,” he said.

The money likely wouldn’t come from taxpayer dollars, he said, adding that the initial $23 million in bonds came from revenue that already would have gone to Urban Commons under the lease agreement since the company receives the passenger fees from the Carnival Cruise Line.

Since the ship is in a designated Tidelands area, any revenue generated must be invested back into the area through the city’s Tidelands Operations Fund, which is separate from the city’s General Fund, Keisler said. He said so far no taxpayer dollars have been used to renovate the ship.

Urban Commons also will have to find the funding for its $250 million Queen Mary Island Project. The company this year went public on the Singapore Stock Exchange in an effort to generate up to $566 million.

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Kelly Puente is a general assignment and special projects reporter at the Long Beach Post. Her prolific reporting has taken her all over Southern California—even to the small Catalina Island town of Two Harbors. She is a Tiki mug collector and 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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