urban commons toast (copy)

WELCOME ABOARD. Mayor Robert Garcia toasts Urban Commons’ principals Taylor Woods and Howard Wu (far right) in 2017, when the firm took over operation of the Queen Mary. Second District Councilwoman Jeannine Pearce is behind Garcia.

Eagle Hospitality Trust, which oversees several corporations that operate the Queen Mary and own hotels in Pasadena, Anaheim and Palm Desert, filed a motion in federal court on Tuesday, March 9, to auction off several of its properties, including its lease for the legendary ship that makes its home in Long Beach.

The filing came as part of the Chapter 11 bankruptcy process, which kicked off in January when several affiliates of Eagle Hospitality Trust — including the corporations that run hotels across the Southland — notified the Delaware district of the U.S. Bankruptcy Court of their intent to restructure.

The bankruptcy court is scheduled to weigh in on the motion, and possibly approve it, on Tuesday, March 23.

Tuesday’s filing was first reported by the Long Beach Post.

The proposal from Eagle Hospitality Trust noted that the New York capital investment fund Monarch Alternative Capital has bid a total $470 million for the corporations that own or manage the Embassy Suites by Hilton Anaheim North, the Holiday Inn Hotel & Suites Anaheim, the Sheraton Pasadena and the Queen Mary, as well as 11 other hotels across the state and country.

If the motion is approved by the court, those companies would tentatively be listed for auction on May 20, with Monarch Alternative Capital’s bid being the minimum offer.

In a Tuesday statement, Long Beach — which owns the Queen Mary — emphasized that no matter what happens with the proposed auction, the city will remain the owner of the ship.

“Any potential future auction would be directly related to the lease and operation of the Queen Mary, the development of the land and the special events parks lease,” the statement said. “Regardless of changes in operator, the City continues as owner.”

Long Beach has been “actively” involved in the bankruptcy proceedings to this point, the statement said, and the city will have more information on what Tuesday’s filing means for the ship after the March 23 hearing.

Urban Commons, the corporation that manages the Queen Mary and owns the other Southern California hotels, did not immediately respond to a request for comment.

Tuesday’s filing, though, followed months of strain between Urban Commons and the cities in which the firm operates.

Pasadena, for example, sued Urban Commons and several of its associated businesses last year for failing to pay $840,000 in taxes and fees owed by the Sheraton Pasadena, which Urban Commons owns.

One of Urban Commons’ associated companies, EHT SPH LLC, settled with the city in September, agreeing to pay $209,561 every month from October 2020 to January this year, with an additional payment in February for any interest or penalties that accrued over the plan’s period.

But Pasadena city officials later had difficulty securing those payments.

The real estate firm has faced similar, though less extreme, troubles in Long Beach. In late 2019, city officials issued a notice to the company that it was in danger of defaulting on its Queen Mary lease because it hadn’t completed urgent repair work. Around the same time, Long Beach’s third-party inspector for the Queen Mary began speaking publicly about the lack of maintenance and repairs that he saw on the ship.

But early last year, the city ended its longstanding contract with the inspector.

Long Beach officials, though, have repeatedly stood by Urban Commons in the face of criticism.

“I can say without any reservations that the ship is far safer than it was three years ago, or the day before Urban Commons took over the contract,” Long Beach Economic Development Director John Keisler said in a 2019 interview, shortly after he advised the firm that it could default on its lease.

But in December 2019, City Auditor Laura Doud announced that she would look into the city’s Queen Mary lease agreement with Urban Commons. Doud has not yet released the results of that audit.

In a January statement, after Urban Commons and the other corporations filed for bankruptcy, the firm said the coronavirus pandemic has led to “unexpected and unprecedented challenges” for the company.

“We have done everything in our power to unite during these uncertain times,” the statement said, “and work together amicably to facilitate the best chance to survival and success.”

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