Operator of Queen Mary in Long Beach front documents for bankruptcy

The genuine estate investment decision trust that operates the Queen Mary in Lengthy Seashore and owns 26 other resorts submitted for individual bankruptcy security this week, signaling what could be the begin of a wave of bankruptcies in the hospitality industry.

The 85-yr-aged previous ocean liner-turned-floating lodge has been suffering, like the rest of the nation’s hotel industry, from a spectacular fall in need owing to the COVID-19 pandemic. Eagle Hospitality Trust’s Chapter 11 filing signifies the latest setback for the legendary vessel that Very long Seashore had hoped would be the crown jewel in an inevitably thriving leisure district.

The town of Extended Beach front, which owns the ship, issued a statement stating it will try out to identify what Eagle Hospitality’s instant programs are for the Queen Mary. The vacationer attraction has been shut because Could simply because of the pandemic.

Eagle Hospitality Rely on was established in 2019 by Urban Commons, the authentic estate investment and advancement organization that owns a 66-yr lease to function the Queen Mary and develop the 65 acres all over it. The lease extends until eventually 2082. The have faith in was stated on the Singapore Inventory Trade with the intention of boosting cash to finance hospitality-connected ventures generally in the U.S., together with a $250-million commercial growth close to the ship called Queen Mary Island.

The individual bankruptcy submitting suggests Eagle Hospitality has much more than $500 million in liabilities, the largest of which is an $89-million loan from Lodging Usa Lendo. A phone to a contact amount stated in the personal bankruptcy filing was not returned. A spokesperson for City Commons could not be arrived at for remark Wednesday.

The individual bankruptcy arrives as the resort market faces its worst crisis in a long time.

“The resort marketplace has been completely devastated by the COVID pandemic, and 2020 will go down as the worst-doing year ever for the U.S. hotel industry,” reported Alan X. Reay, founder of Atlas Hospitality Team.

But Reay said couple of lodges have submitted for personal bankruptcy as a result of the pandemic because creditors have agreed to defer mortgage payments to allow time to get well.

“Eagle Hospitality may possibly be an early indicator of what is to occur in 2021 as certain loan providers determine to pull back again from deferring payments or in which they are anxious that supplying additional time will only erode values further more,” he said.

The Queen Mary has extensive been a obstacle to function, with a 2017 examine recommending that as a lot as $289 million worthy of of renovations and updates had been required to maintain parts of the ship from flooding. The ship has 314 rooms and 3 places to eat, some of which have been through renovations in the final several decades.

City Commons produced a plan in 2017 for the $250-million Queen Mary Island venture, stating the amusement intricate on the waterfront adjacent to the historic ship was envisioned to enable shell out for the ship’s desperately necessary repairs.

The Queen Mary created $205.3 million in economic output a yr, with $93.7 million used in Lengthy Seashore, according to estimates in an economic affect examine that City Commons launched very last 12 months. The ship also supported 2,224 work in Los Angeles County, with 1,374 of all those in Extensive Seashore, in accordance to the review.

About the final 50 many years, Prolonged Seashore has introduced in a number of companies — including Walt Disney Co. — to deal with the ship and create the adjacent oceanfront house, with mixed benefits.

Disney tried in 1990 to incorporate the ship into a $3-billion sea-themed amusement park. But the Burbank enjoyment big declined to renew its lease two years later and instead turned its consideration to making the California Experience amusement park up coming to Disneyland.

One particular leaseholder filed for personal bankruptcy in 2005, and an operator abruptly ended its deal and walked away. For substantially of 2009, in the aftermath of the Excellent Recession, occupancy prices for the ship’s rooms dropped to 50% — hardly enough to include expenditures.

Desperate to generate much more income, in 2018 the Queen Mary finished renovating and increasing stateroom B340, which has been highlighted on television exhibits these types of as “Ghost Hunters” and “Most Haunted” for its historical past of bizarre noises and unexplained nighttime happenings. It reopened the area, charging $499 a night time.

Extensive Beach stated in its statement that it “is concerned” about the Eagle Hospitality bankruptcy, “as the enterprise has a lengthy-phrase obligation to make sure the maintenance and procedure of the city’s asset.”

The town manager programs to explore the Queen Mary with the Metropolis Council upcoming thirty day period, the assertion said.