the QUEEN MARY saga continues...
| LONG BEACH A group headed by a Woodland Hills real estate developer and a music executive will hold the main lease on the Queen Mary if a reorganization plan filed Friday in a Los Angeles bankruptcy court is approved. Facing a Friday deadline, Joseph Prevratil, president and CEO of Queens Seaport Development Inc., filed a plan to emerge from bankruptcy by selling the master lease to Pacific Queen Holding LLC, owned by Michael Adler and David Arden, brother-in-law of rocker Ozzy Osbourne.
Adler said his company would be paying off the existing debt, although he would not go into details. He also said he couldn't be specific about development plans until after meeting with Long Beach city officials. He said he was excited to move forward.
"I know a lot of people have tried with not a lot of success," he said of past failures to develop the Queen Mary area. "I think the time is right for a project like this. I think we have the team to do that."
Although he hasn't submitted a development plan to the city, Adler reiterated interest in possibly adding a marina, retail space and possibly a second hotel. He also intended to explore talks about cruise line expansion. "There's a lot of things out there," Adler said. "In about three or four months, it will be a lot clearer."
Deputy City Attorney Charles Parkin said the city was hoping to see the reorganization plan Monday and has been contacted by Adler's group to set a meeting.
Five groups made proposals to assume debt and take over and develop the 55-acre parcel of land surrounding the historic luxury liner, which is owned by the city of Long Beach and leased.
Joseph Eisenberg, an attorney for Prevratil, said that of the suitors, Adler's group had the right mix of credibility and cash.
"There were offers made in excess of the one accepted, but those were diminished by a lack of credibility or available funds," Eisenberg said. Eisenberg added that the RMS Foundation, a nonprofit group that operates the Queen Mary, would be unaffected by the deal.
The plan also is likely to end Prevratil's long-running and often contentious relationship with Long Beach officials.
"It is not anticipated Mr. Prevratil will continue in his current position," Eisenberg said.
Prevratil said it was too early to say whether he would remain connected with the operation.
"My primary objective is to preserve the Queen Mary jobs, which is why RMS is not involved," Prevratil said.
QSDI, which has run the Queen Mary since 1995 under a 66-year lease, filed for Chapter 11 bankruptcy protection in March after the city declared the company in default of its lease.
QSDI executives say the credits were taken under a lease provision that allows a rent discount for money QSDI spends to develop the property. But city officials say the credits were for inappropriate work and have demanded the money.
U.S. Bankruptcy Judge Vincent Zurzolo will decide the issue.
QSDI also owes more than $24 million to Barney Ng, a Northern California investor who has loaned money to QSDI to help spark development around the ship.
Under a court-granted extension, QSDI had until Friday to submit a plan to reorganize and emerge from bankruptcy. If no plan had been filed, other parties would have been allowed to submit plans for the judge to consider. Adler's group emerged ahead of several competitors including Beverly Hills developer Edward Czuker and Bandero LLC, a minority shareholder of QSDI that has sought development at the site since 2003.
Adler has strong connections in Long Beach, including ownership of the International City Bank Building at 249 W. Ocean Blvd., and the building housing King's Fish House, 100 W. Broadway.
QSDI and Bandero have been at odds since the bankruptcy filing. In June, QSDI sued Bandero in bankruptcy court, claiming that a dispute over development rights around the ship was affecting QSDI's ability to find a suitor. Bandero officials claim they purchased "development rights" around the ship in 2003. In its lawsuit, QSDI claimed Bandero purchased the right to participate in waterfront development.
City officials maintain that they must approve the transfer of any development rights around the ship and have not done so. In a recent court filing, Bandero's attorneys suggested they would seek to submit a reorganization plan of their own if QSDI selected another suitor. Prevratil said he was relieved to have a plan in place and looked forward to resolving the remaining issues with the property. |
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