A New York investment firm took full control Wednesday of the Queen Mary after no bidders emerged to buy the stake of Save the Queen LLC, the financially troubled leaseholder of the Long Beach tourist attraction.
Garrison Investment Group, a silent partner that had loaned $33 million to Save the Queen in 2007 so it could acquire full control of the ship’s lease and development rights, bid just $25,000 to take over those rights at an auction held in New York City.
Save the Queen, an investment group led by a Newport Beach real estate developer, fell into financial trouble and defaulted on payments of the $33 million loan.
In a last-ditch effort to stop the sale, Save the Queen filed a lawsuit in New York state court on Monday, claiming that the sale of the company’s interest in the Queen Mary was not conducted properly. Save the Queen unsuccessfully argued that an extensive valuation of the property, a process that could take five to seven months, should be completed before the lease and developments rights could be put on the auction block.
New York attorney Kenneth Roberts, who represents Save the Queen, said the court denied his client’s request to stop the auction. It is unclear whether Save the Queen will appeal the ruling.
In August, Save the Queen announced plans to build a marina, an onshore amusement park, a hotel and an office building near the ship, which has 55 acres of developable land surrounding it at the port of Long Beach.
After taking over the lease for $43 million in November 2007, Save the Queen hired Chicago-based hotel management firm Hostmark Hospitality Group to run the day-to-day operations of the ship, and began renovation work that included new carpet, new paint and new cooling systems.
Representatives of Garrison and Save the Queen did not immediately return calls seeking comment.