Long Beach officials are in talks to convert the historic Queen Mary ocean liner into a medical facility to help with the wave of coronavirus patients expected to flood hospitals in the coming weeks, the Post has learned.
It is unclear exactly how the Queen Mary would be used. But multiple sources said the ship could be used as a type of convalescent facility for patients who no longer need intensive hospital care. The nearly 100-year-old ship, which is owned by the city, is currently a hotel with more than 300 rooms and a large parking lot.
The Queen Mary would join the U.S. Navy hospital ship Mercy in Los Angeles County’s coastal waters to provide relief for local hospitals as they scramble to create more beds for coronavirus cases. The Mercy, which arrived in the Port of Los Angeles last week, is treating patients who do not have the virus.
As of late Friday, the city had not responded to specific questions from the Post. Instead, officials released a general statement, saying: “The City is coordinating plans regarding care facilities and more to ensure that we remain prepared to serve the needs of our community. The Queen Mary remains in consideration, and we will have a plan to announce in the future.”
This would not be the first time the Queen Mary has been drafted to help in tough times. Launched in 1934, the ship was retrofitted during WWII and transported as many as 15,000 troops, playing a pivotal role in the allied forces’ victory.
Sources said the city is also considering asking other hotels to provide possible hospital space or contribute in other ways during the pandemic, as Gov. Gavin Newsom continues to stress the urgent need for more hospital beds statewide.
On Friday, the city announced that it will convert the Long Beach Convention & Entertainment Center into a 100-bed overflow hospital, similar to ones in Los Angeles and San Diego.
In another relief effort, Long Beach Community Hospital is working to reopen under special order from the governor’s office. The East Long Beach facility, which shuttered in 2018 due to seismic compliance issues, is expected to accept patients transferred from nearby hospitals.
But plans for the use of the Queen Mary could face some hurdles.
Among other things, the condition of the vessel has been in question, along with the operator’s ability to pay for urgent repairs.
Last year, a string of critical reports by the Queen Mary’s former inspector made waves for the city and raised concerns about whether the vessel is safe and structurally sound.
That former longtime inspector, Ed Pribonic, was fired in December following clashes with city staffers over his increasingly sharp critiques of the Queen Mary’s condition.
Tensions had also risen between the city and Urban Commons, a Los Angeles-based real estate investment and development firm that operates the ship under a lease agreement with the city and is responsible for making critical repairs.
In October, the city sent Urban Commons a letter stating that the company had failed to make several urgent repairs and could be in danger of defaulting on its lease agreement.
A top safety concern has been the ship’s 22 deteriorating lifeboats, which have yet to be repaired. The lifeboats pose “a serious threat to the ship’s structural integrity and the safety of guests and employees,” according to city documents.
The project is estimated to cost several million dollars.
The city’s potential use of the Queen Mary also comes at a time when Urban Commons is struggling financially, raising questions about the viability of the conversion plan moving forward.
Last month, Eagle Hospitality Trust, a real estate investment trust formed by Urban Commons, halted trading on the Singapore Stock exchange following a notice of default on a $341 million loan to Urban Commons from Bank of America. The company went public on the Singapore Exchange in May 2019 with the goal of generating up to $566 million for its portfolio.
That portfolio includes more than a dozen hotel properties it owns or manages across the country, including the Queen Mary. It relies on income from those properties to make rental payments to Eagle Hospital Trust.
In a March 19 announcement to shareholders, Eagle Hospital said Urban Commons has been falling short on its payments as the coronavirus pandemic has ravaged the hospitality market. Urban Commons is considering new business strategies, including possibly selling some of its assets.
Representatives for Urban Commons declined comment Friday.
Urban Commons signed a 66-year lease to operate the city-owned Queen Mary in 2016 and has listed the ship as a top money-maker in its portfolio.
But while coronavirus has significantly impacted the hotel industry, Urban Commons had been showing signs of financial struggles before the pandemic.
In October, shares plummeted in the wake of negative media reports on the Queen Mary’s inspections. In response, the company chose to temporarily halt trading as it attempted to assure wary investors that the vessel was safe and structurally sound.
And an independent audit report from 2018 warned that financial losses and other shortcomings for Urban Commons Queensway, which operates the Queen Mary, raised “substantial doubts about the Company’s ability to continue as a going concern.”
Meanwhile, Long Beach City Auditor Laura Doud is conducting her own investigation into Urban Commons’ financials to ensure that the city has “received all revenues owed.”
Before the coronavirus pandemic, Urban Commons has said it has made significant repairs to the ship and that the company was in better financial shape. The company said it was in the process of a “robust” 30-year plan to “preserve and improve” the ship.
The city issued $23 million in bonds for emergency repairs to the Queen Mary in 2016 after significant structural and safety problems were discovered.
According to 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, including the many music festivals held near the ship, to fix problems.
But some of that revenue has now been lost as Carnival in the coronavirus pandemic has halted cruises at all of its terminals, including its Long Beach terminal.