Queen Mary Transfer to POLB Could Affect Port Projects, Analysis States

The Port of Long Beach headquarters building. Photo via POLB.

The Port of Long Beach’s potential ownership of the Queen Mary and the land around the historic ship could affect port projects if a downturn were to happen, port officials told the Long Beach Harbor Commission this week.

During an informational presentation on Monday, May 2, Sam Joumblat, the port’s managing director of finance and administration, said that while the port would be able to absorb the financial impact of the area encompassing the iconic vessel and surrounding properties known as Pier H, the port would not be able to take on additional projects.

Should a recession or downturn occur, Joumblat said, the port could even see some capital projects, including some elements of the Pier B on-dock rail project, deferred based on the port’s resiliency plan, a tool that the engineering bureau prepares and updates throughout the year to identify what discretionary contracts could be delayed in the port’s capital program.

“We may need to do some reprioritization (of capital improvement projects),” port Executive Director Mario Cordero told commissioners. “However, I could indicate to you that Pier B is an endeavor that’s a priority and very important. But again, this discussion that we’re having right now is only for the purpose of giving the board … a briefing in terms of potential scenarios that may happen during this fiscal year.”

Joumblat said the estimates are not currently included in the port’s proposed fiscal year 2023 budget. He added that transferring Pier H to the port would require a formal request from the City Council and approval by harbor commissioners. If that happens, he said, then the budget would need to be amended.

The port estimates capital spending for Pier H would cost at least $236 million over the next three to five years, including about $25.5 million in non-personnel costs in the first year. About 13 full-time employees would need to be dedicated to the management of Pier H, an estimated $2 million.

Harbor commissioners said they want more discussions about Pier H to drill down the details of the transfer proposal.

“I’m not on the negative side of this, but I’m hoping that our council really understands that we have to be careful with what we get ourselves involved with and how do we financially make this work,” said Commissioner Frank Colonna.

Meanwhile, the Pacific Merchants Shipping Association called the financial analysis “bleak” and has been urging the port not to take ownership of the Queen Mary.

“Following the Queen Mary’s 50-year track record of failure as an attraction and hotel, the Long Beach Harbor Department analysis should be enough for the city to come to the conclusion that it is time to scrap the Queen Mary and allocate resources where they can provide public benefit,” PMSA Vice President Thomas Jelenić said.

The city, which has owned the Queen Mary since 1967, previously leased to operators whose job it was to maintain and repair the vessel. The city recently regained full control of the ship after the last operator filed for bankruptcy. In late February, the council voted to begin talks with the Harbor Department over possibly taking control of the Queen Mary.

By Karen Robes Meeks