Long Beach Acts to Keep Queen Mary : Landmark: City Council to open talks on taking over vessel from Harbor Department.

Acting to stave off the sale of the Queen Mary, the Long Beach City Council voted Tuesday to begin negotiations to take over the historic ocean liner from the city’s Harbor Department.

The 7-2 vote, which followed six hours of sometimes heated debate and public testimony, virtually ensures that the ship will remain in Long Beach for the foreseeable future, city and harbor officials said.

The city’s Board of Harbor Commissioners, which wanted to sell the ship to a Hong Kong firm for $20 million, is expected to vote to approve the deal on Oct. 12, Commissioner Roy Hearrean said.

“We stuck our necks, politically, a mile out,� said Councilman Warren Harwood, who voted to keep the money-losing tourist attraction in Long Beach. “This was the last hope to save it.�

Vice Mayor Jeffrey A. Kellogg and Councilman Douglas S. Drummond cast the dissenting votes.

But Mayor Ernie Kell, who does not have a vote, forcefully opposed keeping the ship.

“There are extreme risks,� Kell said. “I think we’re unnecessarily saddling the Long Beach taxpayers with something that’s going to come back to haunt them.�

The council wrestled with the fact that the Queen Mary has lost money in all but one of the last 10 years, according to a recent study by Los Angeles-based consulting firm Economics Research Associates.

The Walt Disney Co., which has operated the ship under a lease with the city since 1988, lost as much as $10.8 million a year, the consulting firm said in its report.

The future of the Queen Mary was threatened earlier this year when Disney announced that it would not renew its lease to operate the tourist attraction.

The entertainment company is scheduled to close the ship’s hotel and banquet facilities today and lay off about 400 of ship’s 1,200 full-time and part-time employees.

Disney will continue to run the Queen Mary’s tours, restaurants and shops until the end of the year.

City officials said they did not know how long it would take to reopen the hotel.

Once Disney announced it was leaving the ship, the independently governed Harbor Department moved quickly to avoid financial loss.

Harbor officials began negotiating with five prospective buyers, who would move the ship out of Long Beach, and one potential operator of the ship in the city.

A majority of the Board of Harbor Commissioners made it clear that it would sell the ship to the unidentified Hong Kong group, the highest of five bidders.

But the commissioners on Monday decided to give the City Council a chance to take control of the ship and keep the Queen Mary in Long Beach.

After the council vote Tuesday, about the only item left to negotiate is how much money the Harbor Department will contribute to make repairs to the rusting vessel.

Another consultant’s report said the ship needs about $6 million in immediate work to make it safe, and another $21 million in repairs and maintenance in the next five years.

The Board of Harbor Commissioners has offered $4 million toward the repairs, but the City Council, led by Councilman Alan S. Lowenthal, voted to press for at least $6 million.

The city is expected to lease the ship to an investment group headed by Joseph F. Prevratil. He who once oversaw the operation of the ship for the Wrather Corp., which was purchased by Disney.

Prevratil maintains he can run the ship at a profit with some improvements, competitive pricing, good promotion. His proposal is to run the ship for three to five years until city leaders determine whether the ship fits into future development plans.

City officials on Tuesday went back and forth over whether the Queen Mary could be operated profitably. City Auditor Robert F. Fronke, noting the ship’s history of losing money and its need for expensive repairs, recommended that the ship be sold. Fronke said that the financially strapped city is in no condition to foot the cost of a money-losing operation.

“I think I’d take the money and run,� Fronke said.

But Assistant City Manager John F. Shirey told the council members that they could not afford to abandon a tourist draw at a time when the city is expanding its convention center at a cost of $95.5 million. The expansion is scheduled to be completed in July, 1994.