Eagle Hospitality Trust

[yeokiwi]

Why Mr. market don't trust a P.E. from a First World Country ?


'' The Queen Mary remains safe and structurally sound.  Shane Fitzgerald, SE, DBIA, partner at John A. Martin (“JAMA”) & Associates, Inc, the marine engineering company which UC had hired prior to Eagle’s IPO has reassured that “JAMA used a 3D finite element model (FEM) to accurately evaluate critical structural components of the ship which led to a nominal amount of steel plate reinforcements in the hull and tank tops, but overall and as a result of these structural upgrades, The Queen Mary remains in excellent structural condition.”.  "

http://www.johnmartin.com/about/people/shane-fitzgerald

Most ships are built with lots of margin in it.
It will take quite significant wearing to cause the ship to break up.

https://www.abc.net.au/news/2014-05-20/o...ea/5463080
Like the one below.. still around despite the horrendous state and corrosion.


Of course, whether the guests will be injured due to some roughen edges is another matter. But, that also applies to aged hotels.

[corydorus]

Ship Trusts end badly. So what so special for a liner in property reit that it won't ?

Ship has 20 to 30 years of commercial value whereas FH land has much longer value for sure .

One needle see blood statement.

[GreedandFear]

This is a 2017 article from the Long Beach Press Telegram.

It would really make a big difference if Urban Commons would release the details of the full report with their rebuttal points rather than just saying that they have not defaulted on the lease. The first few bullet points in the article make uncomfortable reading.

+++++++++++++++++++++++++++++++++++++++++++++++++++++
Years of neglect could imperil the Queen Mary’s future, experts say

A rusting Russian submarine, which is now closed, sits docked next to the Queen Mary in Long Beach on Feb. 23. Peeling paint, worn wooden railings and surface rust are the things visitors spot right away when visiting the Long Beach tourist icon. What can’t be seen by visitors is the more serious infrastructure problems that would cost nearly $300 million to repair. (Photo by Scott Varley, Press-Telegram/SCNG)
0 COMMENTS
By COURTNEY TOMPKINS |
PUBLISHED: March 13, 2017 at 12:28 am | UPDATED: September 1, 2017 at 12:10 pm
Long Beach purchased the Queen Mary half a century ago, predicting the ship would serve as an emblem welcoming tourists along the coast for at least 200 years.

But experts say that after years of neglect, the historic vessel could face some internal structural collapse within the next decade unless major action is taken soon, according to documents obtained by the Press-Telegram. Naval architects and marine engineers who compiled a marine survey on the ship’s condition warn that the structure is probably “approaching the point of no return.”

Among the problems cited:

• The ship’s hull is corroded so severely from the inside that certain areas, including the ship’s engine room, could be prone to flooding.



ADVERTISING

• If a breach did occur, there are no steel watertight doors that could be sealed, and no way to pump water out because the bilge system is inoperable; any major flooding could cause the ship to sink to the lagoon floor.

• The pillar supports for the raised false floor in the exhibition space (where events are held) are corroded throughout and could cause “immediate collapse” under the weight of just a few people.

• Photos: Queen Mary in need of repairs

The report estimates the total cost of ship repairs could range from $235 million to $289 million and predicts the work would take up to five years to complete. Roughly 75 percent of the repairs were deemed “urgent,” according to the study.

The condition of the ship has become so dire that politicians in Scotland, where the Queen Mary was built, have called for an international fundraising campaign to restore the former Cunard liner and urged Prime Minister Theresa May to put pressure on the U.S. government to step in and save their architectural treasure, according to a recent report in Scotland’s national newspaper.


Long Beach officials say the survey’s findings are being discussed with the ship’s current leaseholder, Urban Commons, and both are committed to preserving the historic asset and making sure it can safely remain open to the public. The city in November approved $23 million to address the ship’s most urgent repairs, and Urban Commons is working to secure additional funding.

“We have a timeline in which the engineers believe they can complete those immediate projects,” said John Keisler, economic and property development director. “These are major challenges we can only address over time; it can’t all be done at once.”

The ship, now a floating hotel with shops, restaurants and event space, attracts some 1.3 million visitors annually. And during the years the ship has been moored in the harbor, the Queen Mary has become synonymous with the city’s identity.

“She’s like our Lady Liberty,” said Mary Rohrer, who runs a nonprofit dedicated to restoring the ship.

A paragon, but pricey

The Queen Mary proved an expensive investment since it arrived on the West Coast in 1967.

The city spent $3.45 million to save it from the scrap yard, and by 1992 had invested approximately $100 million. The operators had also spent $64 million, most of it related to the ship’s conversion from a seafaring vessel to a floating hotel and tourist attraction.

• Graphic: Queen Mary in need of repair

But, according to the 396-page marine survey, the “poorly planned” and “poorly executed” conversion has exacerbated corrosion in the ship’s underbelly and jeopardized its structural integrity.

“In many cases, loose material had been discarded on the tank tops where it has continued to corrode without check,” which suggested a hurried and inexperienced job, the report notes.

Engineers who inspected the ship in October 2015 found the sewage system leaks constantly throughout the ship, and tanks storing the sewage are compromised and difficult to access. Storm drains were plugged, covered and abandoned, creating leaks within the walls and pooling. And the entire electrical system that would seal off doors in the event of an emergency was inoperable.

Fire inspectors also issued a list of about 1,000 items to correct last year, including a nonworking sprinkler system. Those fixes are about halfway done.

Similar findings are documented in years of inspection reports, also obtained by the Press-Telegram through the Public Records Act. Ed Pribonic, the city engineer who wrote the reports and has inspected the ship for 30 years, noted early last year that deterioration aboard the ship “accelerates uncontrolled” and that the Queen Mary had “never looked in such poor condition.”

“Many areas of the vessel are so severely deteriorated due to deferred maintenance, that they have been closed off from public view,” he wrote.

‘Tombstone in a cemetery’

The city owns the Queen Mary but hires operators to manage the ship and 45 acres of land around it.

Officials say financial troubles operators have faced over the years have prevented routine maintenance from being done.

“If you go all the way back, leaseholders have always struggled to make enough money to pay operations and keep up maintenance,” former property development director Kathryn McDermott said. “The condition of the ship is a result of deferred maintenance, and a lot of patchwork, … but I believe the operators did the best they could given what they had in terms of resources.”

• RELATED: One way to save Long Beach’s Queen Mary: A $250 million development called ‘Queen Mary Island’

Operators over five decades have struggled to come up with a successful development plan for the oceanfront property.

At one time, Walt Disney Co. executives talked of building a maritime theme park; other ideas included a football stadium or casino and card room. One official even recommended sinking the ship off the coast and turning it into a dive exhibit. For a decade — from 1982 to 1992 — the Queen Mary was paired as an attraction with Howard Hughes’ gigantic Spruce Goose, which was housed beneath the Long Beach Dome until it was shipped to Oregon.

After Disney quit the lease in 1992 and port officials reviewed a 1992 marine survey, which recommended $27 million in repairs, the Harbor Department opted to put the ship up for sale, calling it a constant drain on government funds.

Former Mayor Ernie Kell at the time called the ship a “tombstone in a cemetery no one wants to visit,” and said keeping it would saddle taxpayers with debt for decades.

The port received bids from several foreign buyers that year, but the City Council would not approve the sale and voted to transfer oversight from the port back to the city manager’s office.

The custodian after Disney was Joseph Prevratil, a former port executive who separately headed the 1990 convention center expansion. His company, Queens Seaport Development Inc., filed for bankruptcy in 2006 on the deadline of city demands for several million dollars in unpaid rent. Prevratil agreed to pay the city $4.9 million in a settlement reached the following year.

Prevratil declined to be interviewed for this article.

Former Councilman Doug Drummond, who thought the ship should have been sold to Japan, said in a recent interview that keeping it was a “big mistake.”

“I was on the vessel about a month ago, and it’s all the more awful,” he said. “I know the people who love the vessel have very strong feelings, and I respect that, but somewhere along the line there’s a moment in time that you say, ‘Public money and public policy demands that the ship be scrapped.’ ”

‘Reset button’

Current city leaders, however, believe a partnership with Urban Commons is the solution they’ve been searching for.

“With this new lease in place and a developer who is here for the long term, we feel we’ve been able to hit the reset button,” Keisler said.

Urban Commons last year pledged $15 million to renovate the ship’s 346 staterooms and nine suites; plans to develop the land around the ship are expected to be submitted to the city in the next month, McDermott said.

And, as part of the city’s new 66-year lease agreement approved in November, Long Beach agreed to pay $23 million for critical repairs that are underway, including structural fixes, upgrades to utility systems and repairs to storm drains and sewage systems, and renovations to teak wood decking throughout.

The ultimate goal, though, is for Urban Commons to create a development — using the Queen Mary as a centerpiece — that will generate enough future revenue to preserve the ship.

“Our team is already in full swing making critical structural renovations and repairs to ensure the Queen Mary is well-equipped for the next 80 years, and we will continue to identify and address the most pressing items using the marine survey as a road map,” Taylor Woods, principal at the real estate firm, said in a statement.

Woods said the firm is looking into a newly patented coating to address the structural corrosion. Plans to replace the side shell and bridge wings and repaint the ship are also slated to begin later this year.

Under its contract with the city, Urban Commons is solely responsible for the maintenance. Many, however, blame the city for not holding past leaseholders accountable for the work.

“What’s going on now we’ve known about for 25 years,” said Rohrer, a preservationist. “The city has literally been asleep at the wheel for so long.”

Pribonic, the city engineer, also expressed frustration in his reports with officials and operators who ignored critical problems aboard the ship.

“The continued lack of response regarding several issues raised in these reports needs to be brought up for discussion,” he wrote in one report. “Over the past months and years, I have asked that various maintenance items be completed, most of which are required to occur on a regular schedule, but have not been performed at all.”

A Facebook page dedicated to preserving the Queen Mary documents deterioration photographed over the past decade.

Former Councilwoman Gerrie Schipske said the lack of oversight even extended to the elected officials.

“The council was rarely made abreast about what was going on with the Queen Mary,” Schipske said. “I don’t think there’s ever been any deliberate management by the city. It’s just been there and handed off to operators, and it’s like we’ve never made any demands on anybody; it’s just turned into a hodgepodge of events and concerts.”

Dealings over the ship are overseen by the city manager’s office, which referred questions about the marine survey to McDermott, a former interim department head; Keisler, who took over for McDermott in January; and property services officer Johnny Vallejo.

The former economic and property development director, Mike Conway, handled all dealings between the city and its various operators. The Press-Telegram in October requested Conway’s email correspondence related to the Queen Mary, but officials said all communication was deleted one month after he retired in August. He was with the city for 14 years.

A rare artifact

The Queen Mary is not only important to Long Beach but to many around the globe. It was constructed in 1930 in Clydebank, Scotland, and departed on its maiden voyage from the port of Southampton, England, in 1936.

It carried Hollywood celebrities, such as Bob Hope and Elizabeth Taylor, royalty, such as the Duke and Duchess of Windsor, and dignitaries, such as Winston Churchill. It also spent several years ferrying 765,000 Allied troops during World War II, when it was nicknamed the Gray Ghost.

Martin Docherty-Hughes, a member of parliament in Scotland and native of Clydebank, called the ship’s state a “litany of disasters,” according to Scotland’s national newspaper.

“This isn’t just about a ship, but the men and women who built her,” he told the newspaper. “We will seek to hold to account the city of Long Beach, who took her in good faith, to maintain and restore that ship to the way she was handed to them.”

Long Beach Convention and Visitors Bureau spokesman Bob Maguglin, who gave historic tours aboard the ship in the 1970s and ’80s, said not preserving and maintaining the ship for future generations could spark “international outrage.”

“I don’t think people understand that the ship is not just beloved by some people here in Long Beach,” he said. “There are tens of thousands, if not millions, of people around the world who have memories of or have somehow been touched by the Queen Mary’s history.”

Keisler certainly agrees, saying, “We believe we have something here that you just cannot replicate anywhere in the world.”

[specuvestor]

QM valuation of US$159m / total portfolio of US$1,270m in IPO prospectus : 12.52%

IPO at 0.78 - today's closing 0.545 = 30.1 %

Market cap shrinked by more than 2 QMs .

This is a common misconception including banks during GFC. this is true if market cap = asset. But market cap = equity

[valueinvestor]

City of Long Beach
Update on Queen Mary Projects and Long Beach Cruise Terminal Dome

https://s3-ap-southeast-1.amazonaws.com/...1572015276

[cfa]

City of Long Beach
Update on Queen Mary Projects and Long Beach Cruise Terminal Dome

https://s3-ap-southeast-1.amazonaws.com/...1572015276

Looks like UC has been following the rules of the game since they were the operator of QM . 
Am I right in this interpretation ?

[cfa]

This is a 2017 article from the Long Beach Press Telegram.

It would really make a big difference if Urban Commons would release the details of the  full report with their rebuttal points  rather than just saying that they have not defaulted on the lease. The first few bullet points in the article make uncomfortable reading.

+++++++++++++++++++++++++++++++++++++++++++++++++++++

''''Under its contract with the city, Urban Commons is solely responsible for the maintenance. Many, however, blame the city for not holding past leaseholders accountable for the work.''''

The question is , if UC is solely responsible for the maintenance of QM , do UC need to fork out US$250 to 289 millions as mentioned in the report ?

[angtc11]

New announcements by EHT

https://links.sgx.com/1.0.0/corporate-an...47e798e734
https://links.sgx.com/1.0.0/corporate-announcements/AK0YLGX9CNMGAT9H/c8dd80dca80030672d62afa1bdc441fd480d3907ac4cb73a53ed532e6fd9ebf1

According to this article below, the REIT has the contractual right (obligation?) to perform the maintenance. This suggests that the REIT is on the hook to maintain the ship should UC/its subsidiary default
EHT can also terminate the lease with UC for non-performance. This begs the question on who will want to take over the lease of QM if UC deems it uneconomical.

https://shentonwire.net/2019/10/28/eagle...n-default/

The trust added that in the event of a default, the REIT has a contractual right to perform the maintenance obligations itself, with reserve mechanisms in the lease to provide funding.

“If UC fails to satisfy its repair and maintenance obligations under its sublease, the Eagle Queen Mary Subsidiary has the unequivocal right to
terminate the Queen Mary master lease and enter into a new master lease with another party,” the REIT said.

[GreedandFear]

So, which number is an investor to trust....the USD 7MM of capex over the next two years (plus the USD 23 MM of capex already paid for by the City) as per the above announcement or the USD 239 to 289MM in the prior report (which UC says is grossly exaggerated). We are talking about night and day numbers and that is what concerns me....

[Ray168]

The Story of One Sibei Old Ship

OCTOBER 29, 2019 BY KYITH

https://investmentmoats.com/money-manage...ueen-mary/