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City Gives Queen Mary a 3-Year Operating Guarantee

February 02, 1995|STEVE EAMES | SPECIAL TO THE TIMES

The nonprofit group that runs the Queen Mary had little trouble winning a three-year vote of confidence from the Long Beach City Council this week, but still has to persuade the city to make a long-term commitment to keep the historic ship, officials say.

The council assured the operator, RMS Foundation, that the waterfront attraction will stay open at least through the end of the group's five-year operating lease, which expires in 1998.

The council also directed City Manager James C. Hankla to negotiate a lease extension of up to 20 years, but some members said they have reservations about a lengthy extension.

The foundation, which replaced the Walt Disney Co. as the ship's operator in February, 1993, had requested the three-year guarantee and a 20-year extension to secure financing. The three-year guarantee, for example, will enable the foundation to borrow $3.5 million.

For the most part, the council recognizes the Queen Mary's importance to the local economy and is confident that the foundation's president, Joseph Prevratil, can steer the city-owned ship out of the red, Councilman Les Robbins said. The Queen Mary lost $4.2 million in 1993 and $500,000 last year, but is expected to turn a $1.1 million profit this year, Prevratil said.

The council's primary concern, according to Robbins, is whether RMS Foundation can keep the huge ocean liner in good condition. Prevratil "has deferred a lot of maintenance--as he is allowed to do under the lease--but he can't delay it much longer," Robbins said.

Under its lease, RMS is required to spend $3.5 million a year on routine maintenance and $2 million a year on major repairs and upkeep. Although the foundation has met its routine maintenance obligations, it has spent nothing on major repairs in the past two years, City Auditor Gary L. Burroughs said.

RMS plans to spend part of its $3.5-million loan on maintenance and has asked the city to release $2.5 million in harbor funds that have been set aside for major repairs of the Queen Mary.

Burroughs, who opposed the lease with RMS Foundation in 1993, contends the city can find a better use for the 55 acres of prime waterfront area taken up by the ship. The city gets $100,000 an acre a year for port space, but RMS pays only about $240,000, he said.

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