Singapore-listed Eagle Hospitality Trust is set to auction its 61-year lease on the famous former ocean liner Queen Mary.

The grand old dame of the transatlantic liner trade was the biggest, fastest ship ever built when it made its debut for Cunard in 1936.

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For more than five decades, it has been moored in Long Beach, California as a floating hotel and tourist attraction. Even though it is still afloat, it is classed as a building, not a ship, so a real estate lease is being offered instead of a long-term bareboat charter.

Eagle Hospitality, which controls a portfolio of 18 hotels, is the latest of numerous operators that have tried and failed to make a go of the static ship that is officially owned by the City of Long Beach.

The trust, a spin-off of hospitality company Urban Commons, will offer its lease on the Queen Mary and the adjacent 45 acres of waterfront property to the highest bidder as part of its bankruptcy restructuring plan. The lease runs until 2082.

In an announcement on Tuesday, it said the surrounding land has “tremendous redevelopment opportunity”.

Grand plans

Eagle Hospitality Trust planned to redevelop the land surrounding the Queen Mary into a leisure, retail and hospitality zone. No work on the $250m project has taken place. Photo: Urban Commons

Urban Commons and Eagle Hospitality’s plans to redevelop the surrounding land into a retail, leisure and hotel zone were first announced in 2017. The $250m project has yet to proceed beyond the design stage.

Alan Tantleff of FTI Consulting, who was appointed as the trust’s chief restructuring officer, said the Queen Mary “is a world-renowned asset and we hope the next custodian can allow it to reach its full potential”.

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However, that next custodian may need deep pockets. A marine survey carried out in 2015 estimated that the ageing vessel would need up to $289m for urgent repairs over the next several years.

So far, only $23m has been spent on repairs.

Eagle Hospitality filed for bankruptcy in January due to financial problems that were exacerbated by the Covid-19 pandemic.

Leases for the Queen Mary and 14 of the other hotels in the trust’s portfolio will be sold at an auction tentatively set for 20 May.

Tantleff has the option of selling the lease for them separately or en bloc.