Image: David McNew (Getty Images)
The ongoing saga of the legendary cruise liner the Queen Mary has taken another turn. The ship has reopened, but as the Long Beach Post reports, millions of dollars in funds meant to repair the luxury liner have likely been lost as the city has dropped its bankruptcy case against the ship’s former operator.
Urban Commons, the former operator of the Queen Mary, made big promises to the city of Long Beach about its future plans for the ship, including things like a whole entertainment venture. But as time went on it became more and more clear that Urban Commons was up to no good. Urban Commons sold Long Beach city officials on a $250 million plan to restore the ship. The city, in turn, agreed to issue Urban Commons $23 million in bonds for repairs on the ship.
Then Urban Commons went belly up and left a trail of unfilled promises in its wake and Long Beach took over as operator of the ship in 2021. The city sued Urban Commons to try and get the $23 million back but, as city attorney Rich Anthony pointed out, they couldn’t exactly figure out where the money went.
“We were trying to find out if Urban Commons … took the money and pocketed it. We didn’t find evidence of that,” Anthony told the Post.
Through subpoenas of Urban Common’s account ledgers, the city was able get a picture of what happened to some of the millions in repair funds:
That information showed most of the money the city paid out indeed matched Urban Commons’ invoices for work it subcontracted, but that doesn’t necessarily absolve the company or its principals of wrongdoing, City Attorney Dawn McIntosh wrote in a Tuesday memo to the City Council.
Anthony said it’s possible Urban Commons underestimated the amount of work needed or did a bad job finding appropriately low bids on the work. City Auditor Laura Doud, who raised red flags about the firm in 2019, said Wednesday that inflation—between a 2015 marine survey of the ship’s needs and several years later when the projects were bid—could have played a role.
But another factor, which Doud detailed in a 2021 audit, was undoubtedly what she called “excessive markups” and management fees for Urban Commons that caused costs for some of the ship repairs to balloon.
Urban Commons also alledgedly marked up the cost of repair materials 40 percent and charged $1 million for management fees. It was also found that, out of the 27 items marked as critical repairs needed for the ship, Urban Commons only completed seven of them. With the millions gone, the city is now seeing just $200,000. But the list of creditors Urban Commons owes is long, so the city may never see money.
And some, like City Auditor Laura Doud who mistrusted Urban Commons enough to raise red flags about them back in 2019, are disappointed in the outcome of the case. “I’m still uncomfortable with the fact that the city did not receive work that we were promised, that we paid for,” Doud told the Post.
Keyword: $24 Million In Public Funds Meant To Save The Queen Mary Disappear In Bankruptcy Court