August 6, 2007

4 will bid for Queen Mary

This on the presstelegram site about the long running QUEEN MARY saga...

"LONG BEACH - Just hours before Friday's 5 p.m. deadline to submit bids for the Queen Mary's lease, two developers and an off-beat artist emerged as potential buyers - paving the way for a bidding war over the historic ship and its surrounding acreage.
An auction is set for Aug. 14 in U.S. Bankruptcy Court, where the ship's current lessee, Queen's Seaport Development Inc., sought Chapter 11 protection two years ago following a years-long rent dispute with its landlord, the city of Long Beach.

A stalking-horse bid of $41 million already has been received by O&S Holdings in Santa Monica. But, after Friday, the current high bidder is KUD International, a subsidiary of Kajima USA, which has submitted a bid of $44 million.

The other two bids, both of them for $43 million, are Save The Queen LLC - a creation of Hix Rubenstein developer Jeffrey Klein - and sculptor Brett-Livingstone Strong of Strong Monuments.

All three new bids were submitted between 2 p.m. and 5 p.m. Friday, along with cashier's checks or wire transfers of nearly $1.3 million apiece, deposits ensuring that each is a committed bidder, said bankruptcy trustee Howard Ehrenberg. The deposit is returned to bidders who aren't chosen.

The last-minute nature of the bidding was strategic, Ehrenberg said.

"Sophisticated buyers in an auction-type setting don't want to reveal themselves any sooner than they have to," he said. "It gives the perception of an advantage to others if they make themselves known any sooner."

Ehrenberg said he was encouraged by the number of bidders, but cautioned that only O&S so far has been labeled financially qualified to take part in the auction.

He said he would meet today with city officials to discuss which of the bidders should be allowed to move forward. If there is a dispute, the matter will be brought before U.S. Bankruptcy Court Judge Vincent Zurzolo before the auction begins Aug. 14, he said.

A closed session is scheduled for Tuesday to brief the City Council.

"While I'm, of course, very pleased to have received three bids," he said, "they each do need to qualify."

Save the Queen LLC and KUD International LLC are the most likely bidders to stay in the race, sources have said.

KUD International, headed by Marvin Suomi, stands to capitalize on Kajima's longtime relationship with the city of Long Beach, having built the Aquarium of the Pacific and the World Trade Center downtown.

For the Queen Mary project, KUD has teamed with Christopher Damon, a Pacific Palisades developer who has been heavily involved in the acquisition of entertainment real estate - including live-performance venues, theaters and restaurants. Recently, he has partnered with CineSpace Supper Club & Lounge in Hollywood and Surfparks, a surf-based theme park set to open next year in Orlando, Florida.

Save the Queen consists of Newport Beach developer Jeffrey Klein and Hix Rubenstein, a developer of high-end golf resorts.

Previously, Klein and Hix Rubenstein had been linked to the Caryle Group, but that is no longer the case, Ehrenberg said. Although he declined to specify the names of Klein's new backers, he said they appeared to be "equally strong institutional financing sources."

The third, and most unlikely bidder, is an artist named Brett-Livingstone Strong, whose vision for the Queen Mary site includes building a statue of the late Princess Diana of Wales on a scale similar to the Statue of Liberty.

Deputy City Attorney Charles Parkin said the city had received a package with a few details of Strong's plan. He said the artist planned to renovate the ship and build a "Statue of Freedom" monument - a bronze statue of an angel with a 20-foot tall face modeled after Princess Diana. There would also be a portrait of the Virgin Mary, he said, modelled after Michelangelo's Pieta in the Vatican, and other tourist attractions.

Developers have been reluctant to share their visions for the Queen Mary and the surrounding 50 acres, but most appear to center on mixed-use projects - retail, restaurants and entertainment - as well as resorts and marinas. Any development must go through the usual city process of approval, which could take years."

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