TITLE
Recommendation to authorize City Manager, or designee, to execute a Memorandum of Understanding (MOU) between the City of Long Beach (City) and the Board of Harbor Commissioners of the City of Long Beach, Harbor Department (Harbor), which will include the terms for Harbor to advance the City an amount up to $12 million, take control of certain City oil properties, that can transition to non-oil uses, split the revenues derived from leasing of those properties with the City, and use the City’s share of revenues to pay down the advance of funds. (Districts 1,7)
DISCUSSION
On April 6, 2021, the City Council approved a recommendation to discuss a possible transfer of Pier H and the Queen Mary to the Harbor Department. During the extended period of negotiation, City and Harbor staff worked closely on an important hull study which is still ongoing, and the broader Hotel Management Agreement for the Queen Mary. The City and Harbor teams worked closely during the negotiation period and discussed various terms for a proposed agreement to transfer. In the end, the City’s experience with hotel, restaurant, parking, and passenger terminal leases and expertise related to special events and filming activity pointed to the City as the best steward for the Queen Mary and Pier H for the foreseeable future. Financials from the ship operations show that prior to COVID-19, the ship itself does have the ability to generate significant revenue, in upwards of $57M gross a year. Private operators in the past have obligations and interests the City does not have, including having to pay back investors and guarantee certain amounts of return on investment. Absent those commitments, if the Queen Mary is able to reopen and generate the same amount of gross revenue, significant dollars should be available to reinvest back into to ship restoration, maintenance, preservation, and the ultimate development of the additional land site which can help provide long-term funding for op...
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