Recommendation to authorize City Manager, or designee, to execute any and all documents, including additional lease and capital funding provisions, necessary for an Amended and Restated Lease and Operations Agreement No. 22697 with Urban Commons, LLC, for the Queen Mary and adjacent properties; and Authorize City Manager to proceed with funding up to $23 million in infrastructure repairs to the Queen Mary by using up to $5.8 million in total reserves designated for the Queen Mary and borrowing approximately $17.2 million to be repaid from Queen Mary related revenues. (District 2)
Motion carries the the vote go up. Okay. Item number 18. Mr. West. Mayor council members. Tonight is a real epic evening regarding the Queen Mary property. As we know, it was picked up by a company called Garrison, a financial company when Save the Queen went bankrupt. We've been working for the past several years to attract a new company, to take the lease from Garrison, where we would develop the 45 acres and also manage the Queen Mary. This is a property that I know previous director of economic development Mike Conway, has been working with for the past couple of years, and he's been briefing us so long that we're finally down to the end of the wire here. We're going to hear the rest of the presentation by Katherine McDermott, the interim director of economic development of Property Management. But this basically transitions the lease to. Urban commons, a group that we've been working with for the past. Year to facilitate. What. The task force for the Queen Mary has been putting together for guiding principles to the city council and the community. So with. That, Catherine, let me see. Thank you. I'm sorry about that, Mr.. Mr.. West, you turn it over to Catherine. Catherine McDermott. Good evening, Mayor. Council people, city staff and members of the public. We're pleased to bring this item to the council tonight for approval. As Mr. West said, this is the culmination of several years of negotiation and planning by city leaders and staff and the urban Commons team. On November 17, 2015, the City Council approved the assignment of the existing amended and restated lease for the Queen Mary from Garrison Investment to Urban Commons LLC. The lease includes the operations of the Queen Mary, Carnival Cruise Lines and Catalina Express in the 42 acres of land surrounding the ship. The Council also approved the terms and conditions of a new amended and restated lease with urban commons, which will call the new lease. The new lease was expected to be signed in the following six months or by May of 2016. The negotiations were extended past May due to several new issues. The lease terms are in that are in front of you tonight concerning the physical condition of the Queen Mary and the need for urgent repairs. Proposed terms to facilitate the construction of a replacement passenger facility for Carnival to allow urban commons to retake use of the Dome in the future for special events. And lastly, a card check neutrality agreement. First, I want to discuss the issues related to the physical condition of the Queen Mary. Garrison investments in it and its successor, Urban Commons, commissioned a marine survey of the Queen Mary. The survey concluded that there is over 200 million and repairs required to to be made to the ship. The terms of the new lease would include a pass through of revenue from Carnival to the city, which would be used for capital repairs and renovation on the ship. Based on the recommendations of the Marine survey, there are urgent repairs that require immediate attention that exceed the expected annual pass through amount. And I'm sure these slides show you some of the repairs that need to be done. Based on the recommendation of the Marine survey, Urban Commons asks the city to create a more robust fund at the onset of the new lease to address some of the urgent issues. The city and urgent in urban Commons have each agreed to divert future and current revenues from Carnival to create a fund of approximately $23 million. First, I want to make it really clear that there are no new funds being used to accomplish the ship repairs. The city's contribution will come from a combination of tidelands in Queen Mary, cash reserves and from future revenues from Carnival and Urban Commons in the form of base rent and passenger fees totaling approx. Totaling approximately. Over the first seven years the least. Sorry. Urban Commons is also contributing their share of passenger fees rosier received from Carnival in years five through ten of the new lease. The city intends to issue bonds for 17.2 million to be repaid by these revenues over the first ten years of the new lease. Secondly, the new lease also required urban commons to turn over the entire dome to Carnival for their expanded cruise operations to accommodate larger vessels expected to begin to call in Long Beach in the future. This has been accomplished, as you may have read in Carnival's recent press release, Urban Commons believes the use of the dome for an event facility is integral to its development plans. In order for urban commons to utilize the dome. They will be required to construct a passenger terminal facility for Carnival. This added cost to the development will reduce the capital for development of the vacant land and for visitor serving uses. The city and urban Commons have agreed to amend the revenue sharing provision in the new lease to increase the passenger fees paid to urban commons. The additional revenue to urban commons will help defray the cost of construction of the replacement passenger facility and preserve capital for the commercial development of the land. The reduction in resident revenue is estimated at approximately 5.375 million in the first ten years of the lease, which is the length of the bond issue. As was mentioned, the city intends to issue revenue bonds for $17.2 million. The bond issue is expected to be sized at $19 million to provide about 17.2 million in contract construction proceeds and is to be completed within six months after the effective date of the lease. The bond issue would be backed by a pledge of tidelands revenue. The actual source of the debt payment is anticipated to be passenger fees and base rent from urban commons. Lastly, the city and urban Commons have agreed to add language to the newly stating that if urban commons constructs a hotel on the property, a new hotel, they will require the hotel operator or management company to participate in a card check neutrality agreement within three months of receipt of the site plan review. The city believes that these changes to the new lease approved by the Council last November are consistent with the city's priorities associated with this project, which include ensuring that Carnival has a facility that will handle or handle future expected larger ships and additional passengers to the Long Beach cruise terminal. Commercial development of the land surrounding the Queen Mary, which is integral to the long term viability of the city's historic asset. I'm happy to answer any questions that you may have. At this time, I'd also like to introduce members of the Urban Commons team, including Taylor Woods, Howard Wu and Dan Roney , who are in the in the audience. Sistematica. That concludes stats presentation were available for questions if needed. Okay, thank you. I'm going to turn over to the maker of the motion. Councilwoman Pierce. Thank you very much, staff. I want to thank you guys for not only your presentation today, but the very intensive, long days that led up to this to get us where we are today. I know that you've worked hard and that we are doing our best to preserve what is a city asset, which is the Queen, and trying to activate an area that has been particularly challenging to activate. And so, as I said last time this item came up around the Queen is I'm very excited about what we can do there. And I want to thank Urban Commons for thinking outside the box, for being innovative and really pushing ourselves to think about how we can preserve the ship, how we can support Carnival, which is one of the largest companies that we have here in the city. That is something we've been able to depend on over the years to make sure that we have revenue coming in and that we are expanding that opportunity here in the city. Over the last several months, I have seen even the Queen with you guys taking over. It activated in ways that it wasn't before. And so tonight's vote really being around ensuring that the city is not spending any additional money, but that we are investing in a ship to make sure that we're protecting our asset and that I feel confident in the bond that the city is issuing, that we're going to pay that off in seven years. I feel confident in that the sharing of the passenger fees is an appropriate share. And so I'm really excited to hopefully ask for my council support in making sure that this goes through tonight. And thank you, staff again. Appreciate it. Thank you, Councilmember Andrews. Okay. Well, you're on this. You're the second. Yeah, go ahead. I can only say that, you know, it's been a long time coming. And I really want to commend the individuals who have taken this over, because I think you see the pride that we're looking for. And I think with your support and help that we're going to get this ship to where it should be. And that's the dream that everyone has. And all the things that you guys have in your mind. Put it in action. And I'm telling you, Long Beach is going to be the way to Always Strong Beach. Thank you guys again for the work you've done. Thank you. Councilwoman Pryce. Thank you. I like the comments that I'm hearing from my colleagues, but I really would like to focus on the agenda item, which isn't really how wonderful the change in ownership has been, which I think is great, and how much we should try to invest in the Queen Mary, which is also great. But the agenda item is actually it's it's involving a debt that we're going to be issuing as a city. Right. So that's the that's the I'm talking about that this has nothing to do with the lease, correct? Actually, the issuance of the bond and the repayment from the revenues coming from Carnival are a part of the lease. Yes. Okay. And that's. Can I just ask, why is it that the city is undergoing this these expenditures at this time? Well, the city had always intended in the lease that was approved last year by the council. The city had always intended that the passenger fees from Carnival would go to the city and then into a historic preservation fund, and that urban commons would use that to preserve the ship. The difference that is being made is that that that amount of about $2 million a year just isn't enough to take care of some of these urgent repairs. And so what we're doing is front funding the money with the bond. And for the first seven years, we will end four, five years of urban commons. We will both put our fees from the passenger fees. We will put that toward the repayment of the debt. So, again, we're not using money in a different way. We're just we're using money as it was intended, which was for the historic preservation of the ship. And I understand that I did read the staff memo. My question is, and I guess this is something I didn't know until this item appeared on the agenda, which was frankly a little bit surprising that we're going to be using a pledge of tidelands revenues. There are some tailwinds. The Tidelands revenues is the pledge, but those revenues are the passenger fees we intend for those revenues that are going to repay the bond to be these passenger fees. So there aren't the. The idea is we are using the fees that come in from Carnival, which are Tidelands revenues to pay off the bond . And Councilmember, if I can jump in and help explain as well. Anything in that area has to do with Tidelands. So all the money that comes in and out of the Queen Mary that is also reserved for Queen Mary purposes is actually tidelands funds. So I think Catherine explained it very well. We expect no additional money to be needed that we are putting in money that comes from Carnival that used to go to urban commons under the new agreement comes to the city. We would then use that as a debt issuance and also as part of this $23 million urban commons is putting their own private money into the deal that the city will go to the bond market. So part of the reason that you see in the in the agenda item that it talks about Tidelands, is for us to get a very good interest rate and to have a low cost of borrowing. We're going to be pledging that tidelands revenues will will make up for it. Well, will be the backstop. But we're very certain that the money coming from Carnival will cover that. And if that doesn't happen, we do have emergency reserves that would be available. We do not expect to need those that we have all the money that we need from Carnival Lease to be able to pay for this seven year city commitment, plus the other three for urban commons. And these emergency reserves. I'm assuming those are out of Tidelands as well. First, we have money from Queen Mary, so we have Queen Mary Reserves. That would be as part of that. And then we have operating reserves from Tidelands as well. Yes. Okay. So this plan would not use as its insurance any projects that we've already committed to. Our constituents will be paid out of Tidelands. So, no, that is not envisioned, although we always plan for every and any risk in eventuality. So if in the very unlikely event, Carnival, one of the largest cruise corporations, would go bankrupt in the next 7 to 10 years, that whatever remaining would be first pledged from any Queen Mary Reserves, we would look to our operating reserves . And between those pots of money, we're already looking at almost $19 million, which is the debt that we would go to go to the bond market on. If for some reason that weren't enough, we would look to other tidelands, but we are not pledging any additional projects or anything as collateral as part of this. I know it's not part of the staff report, but I know that the city auditor's here and I wonder if it's possible for her to give us her thoughts on this, because I know this has been a subject of study and consideration in the past, and I'm just want to make sure that we're proceeding because to me , this is a pretty significant action by the city to take. And so I would feel more comfortable hearing from the city auditor and even John GROSS if he's prepared to make any comments about and thoughts on this moving forward. I don't mean to put you guys on the spot, but if either of you guys have you just happened to be sitting in the front row. So why don't we have missed out? And then, Mr. GROSS, maybe after you can make some comments as well, please sit down. Thank you. I believe this is a significant item. My last discussions regarding the Queen Mary were with the former director, Mike Conway, several months ago. And at that time, the city was not liable for assuming any risk for the new lease. And so there is a significant change happening today. I've reviewed this item and called a meeting with the city manager this morning to discuss it with him. He provided the documents I requested this afternoon, but I haven't had time to review them adequately. And any time we're using public funds to invest in something, I would always prefer time to review the details of the financing plan for the the Queen Mary. And thank you, Kathy, for your presentation that you just gave. I think that help clarify some things and and it does bring up more questions that I that I have. One of her first comments was the fact that the Queen Mary has over $200 million worth of infrastructure needs. And I think that's extremely significant. And how this $23 million investment fits into the long term plan for the Queen Mary. And who's responsible for those $200 million worth of investment infrastructure needs the Queen Mary has? It's an important question I think we need to ask as a city. I. I feel like I would prefer to have more time to review the the projections, to feel more comfortable with the risk that the city is assuming at this time. From the documents I've reviewed, it appears the city is the only one assuming risk at this time, and so we would like more time to review it before the council would vote on an item like this. And that would be my recommendation to allow us some time to review the documentation that was just provided to us today. What would be a reasonable amount of time? Like 30 days? Would that be enough? Mm hmm. Is that a possibility, Mr. City Manager. We've been stretching this for quite some time as we learn for a couple of years. We've been negotiating with urban commons really for the past three months intensely. We came up to the final negotiations recently. They are stretched. If we go any further. With interest rate changes, that could affect the interest rate on what. They're going to do. Additionally, their extent, they. Are perhaps this remote. Could talk to this as well that at some point in time. I don't know how quickly that's going to be. They could reverse our position with Garrison and actually lose our position with the Queen Mary and it would revert back to Garrison and potentially put urban commons in bankruptcy. Can I do I just want to make sure that the one question that Ms.. Doughty did bring up about the liability question, so why don't we have that answered as well? But before I do that, Mr. Price, are you did you want to continue everything else? Yes. And I appreciate that for for Mr. West. I appreciate that this has been going on, as you said, for two years. But I think I've tried to be really diligent on this. And before Mr. Conway left, I spoke with him frequently about this lease and this contract and my concerns. And this may be going on for two years, but until this appeared on the agenda, I did not realize that we were going to be pledging tidelands funds for this type of debt. So perhaps that's my negligence. Or perhaps there could have been a better job at a briefing that went on, because I did not know that this was going on for two years. And I, I do have an issue when items come before us and we're told that there's this imminent urgency that we have to make a decision that night that that to me is puts us in a very difficult place. Council Member I let's when we're prepared when Mr. out is concluded, I think that I. Think the discussion here is the amount of risk regarding the tidelands, which we think is. Fairly. Brief. And that's something that Mr. GROSS can talk about when we're ready. Mr.. Can you guys please. Mr.. MODICA You were going to say something. Yes. I wanted to respond a little bit to the and just clarify the the liability in the 200 million. And, of course, the city attorney can jump in any time. And if I say something that that needs to be clarified. So the the Queen Mary is a city asset that actually belongs to the city. So the way that we have managed our risk in the past is, rather than as a city, take on everything that's responsible to the Queen Mary, we enter into a long term lease with somebody who can make revenue on that site and able to create some revenue to put it back into the Tidelands, to pay for the maintenance for a city asset. That, frankly, is very expensive. It's been here since the 1960s. Anything in a marine environment is going to require a tremendous amount of maintenance. And so from time to time, the owner of the or we're the owner, but the the lessee over there does Marine surveys. We've done this in the past, and they normally show that there is a lot of maintenance that needs to be done. So this was conducted by Garrison before it transitioned to urban commons and looking at over $200 million worth of infrastructure repair. That's not unlike what we see in any facility that we have anywhere in the city. So every facility is going to have maintenance issues. And so that is the summary of the major issues, what you've seen in front of you today, those are the structural issues, the ones that are the most urgent. And the way we've done this agreement is urban commons. Ultimately, at the end of the day, per the lease is responsible for all of those investments. However, if at some point the city puts the full burden on them, they have the option of basically walking away and the city would it would revert back to the city and we would have that $200 million worth of infrastructure repair without really any revenue source to be able to pay for it. So we think that this agreement makes a lot of sense. We're using Tidelands reserved money for the Queen Mary to put into the deal, money that we're receiving from Carnival. So no additional tidelands dollars that aren't already going into the ship and then also having urban commons put their money into the deal in order to do that, $23 million with very little risk. So and then, of course, urban commons is also putting in $15 million of their own funds to put into the parts of the ship that people see, the part that really makes them want to come spend money like the hotel rooms and the lobbies, which is really the revenue generator. So under this deal, the city helps finance kind of the the structural bones, the utility systems, the plumbing, the things that the city, you know, that need make the ship go. And there will be investing more money into what makes money. And I appreciate that explanation. It makes a lot of sense to me. My my I guess my confusion lies in the fact that prior to even the last day that Mr. Conway was here, my understanding was that we hadn't reached an agreement yet. We didn't have a legal document. So all these terms that you're talking about in terms of this, if this were to happen, this would happen to urban commons of this. Where is that coming from? What, where, how? We're counsel to be made aware of those those conditions. That's what I don't understand. So there's two documents. One is the lease that they're currently in that has been the lease that we had with Garrison Urban Commons is actually our lessee. We have transferred the existing lease over to urban commons. And so they are our lessee. What we brought to you back in November 15th was really the the majority of the of the things that we're talking about today and all those lease conditions, all the things that transfer risk and responsibility over to urban comments. That is what the council saw in in pretty great detail on November 15th. Since that time, we've had those discussions with Carnival and with Urban Commons and with the city about really the Dome. And then also now this component about how to fund some of the maintenance. And this was a request, as we did back in November, was create that that pot of money, that $2.15 million that we would be able to invest every year. What is a little different in this is they're asking us to just front that money and do it in a short time frame, about seven years of money that we were going to put in the ship already that the council approved back in November and just do it quicker. So we have a larger pot of money that frankly, you can get more repairs done efficiently because you're going to have larger sums that you can invest all at once. So I'd like to hear from my colleagues on this, but I think that and I'd also like to hear from Mr. GROSS. But I think that our auditor saying that the benefit of 30 days would be very valuable to her and in terms of her comfort is very reasonable. And I understand that this is probably something that should have happened yesterday, but the reality is that it's coming to us today and giving us 30 days to feel comfortable with a decision that's this big is is very reasonable there. I think 30 days is is not much time at all. In light of I understand the urgency on the part of the negotiating parties, however, we have not been subject to those negotiations in those discussions. So I think 30 days is reasonable to give us some more time. I also feel incredibly uncomfortable pledging revenues that could potentially have been already committed to constituents through our Tidelands budget. Those are real constituents advocating for real needs. And I don't I know that while I understand the risk is low. I do think that we need to have some thorough and comprehensive and meaningful, genuine discussions before we we pledge that kind of money, because we've worked really hard to prioritize items. And, you know, it's the fact that that something could be set in a meeting that could cause somebody to want to undo years of of of commitment to a project is one thing. But meaningfully voting as a council to pledge that money long term is problematic to me. And I think the the the first risk that I just mentioned, you know, I can't control somebody may want to just pull money that's been committed to a project to make a point. But I can control us making long term decisions about our finances, knowing that we've already committed some funds to particular constituent groups. And so that's that's a problem that I have is is pledging money that we've already committed elsewhere. That's a problem for me. So I'd ask my colleagues to consider putting this over 30 days as the city auditor has suggested, and allow us some time to have the financial numbers so that we can all feel comfortable moving forward. Thank you. Okay. Let me go ahead and move on. I know we have a couple more speakers. Just as a reminder, we have another critical item that we have to get to after this. And I know that Councilman Ringa also has to go. So just I know as I know as we move forward to consider that councilman mongo. Thank you i to appreciate and respect. City official and auditor Laura dowd and I think that within the context of the information you have available to you, I can understand why you might think that some more time would be valuable. I, like Councilman Price had have had several meetings not only with Mr. Conaway, but also with Councilmember Pierce, and before that, several meetings with Councilmember Lowenthal. I've made the efforts to have meetings with members of urban commons, and I'm familiar. I will say that during discussions with Vice Mayor Lowenthal at the time, I realized that I had not experienced anything with Carnival Cruise Lines and had any personal opinions on their value to the city of Long Beach. So my fiancee and I, with our own personal funds, decided to take a weekend and experience Carnival. I am very excited that they're bringing another ship. I think this will be huge for economic development. And I think that in in the industry of economic development, one of the things that I've learned in traveling and meeting with brokers and individuals is that a lot of things can change in 30 days, time can kill deals, and this deal is a good deal for Long Beach. I worry that should we not find another partner like this in the future? I think we're in a great situation and the assessment and knowledge of what risks urban commons is taking on is, in my opinion, greater than the risks we as the city is taking on. And for that, I will be supportive of this item and I hope my colleagues will as well. This was not put on the supplemental agenda. This was not jammed down our throats at the last minute. I believe that over the last seven days, I've had the time necessary to follow up on any conversations I've had since November . And I feel very confident that this is the right direction. And I appreciate the work in filling me in and briefing me throughout the process, as I know many of my colleagues have as well. And so. I too, want to be mindful and timely in ensuring that we think things over carefully. And in looking at the the little matrix that the city manager gives us, I've known this was on the agenda for several weeks. And so for that, I appreciate you. Have a great day and I hope you'll all support me. I got some of them. I'll be very, very brief if we can bring up slide eight. I just had any clarification on one item there. Is that easy to do? Slide eight, please. And I'm just talking about years one through five versus years six through ten. I want to make sure I'm really clear on that. Okay. As soon as they load that. It's right here. So we can move on to the next speaker, if you like. I'd coming up. I. We're trying. You've got to load it back there. There, loading it now. Okay. So if you can just go over your your version of that. Urban commons, can you can you tell us the years one through five versus six? Yeah. So in years one through five, the city receives up to 2.15 million from Carnival's passenger revenue fees, plus 300,000 for base red that would go toward. For five years that share of the city's passenger fees. We'd go, okay. I think we have a type. I spotted a typo when it was up there. I believe it says went through seven spots. We went through five. I believe that's. It. No, it actually is one through seven. Is it. So the year six and seven, the amount goes down to 1.5 million. So the city is pledging seven years of its revenue. It's just in year six and seven. It goes down. Urban Commons is pledging year six through ten and that's estimated at about 800,000 $815,000 a year. So and just out of that, to be fiscally responsible, the city didn't want to pledge long term this money. We wanted to do it on a short term. So we wanted to put about seven years of hours in. So that's one through seven. Carnival Urban Commons doesn't really see any of that passenger facility until year five. So in part of our negotiations, we asked them to put money in. So their money, once it starts in year five, under the current agreement on the lease, they're putting their money in from years 5 to 10. We put money in from years 1 to 7. Okay. I think that clarifies it for me. Thank you. Thank you. Before I go back to Councilman Pearce, do might we go to public comment first and we'll come back any public comment on this issue? Please come forward. If there is, please quickly. Yes. Thank you. My name is Diane Roche. I reside in Los Alamitos, California, and I'm here tonight to ask mainly a couple of questions about this new lease. Mayor Garcia and members of the council in the 1990s, I chaired an organization called the Queen Mary Foundation, and that's the organization that is responsible for the ocean liners admittance to the to the National Register of Historic Places. And I had a couple of questions about the structural integrity. I know back in 1990 and again in 1992, Radio's International Marine Survey Organization did detailed surveys of the Queen Mary's Hall and superstructure. And there were some concerns at that time that were going to be addressed when Joseph still took over the lease of the ship in 1993 and the city engineer Edward Bionic drew up a base maintenance plan. That's Document HD 1605. And there were several concerns during the ship's conversion. There were some bulkheads removed, some load bearing members that have never been replaced since that time. And I noticed that when you flashed up on the screen, there were lists of the immediately needed maintenance and restoration concerns of the recent survey. I believe it's by Simpson, Gompertz and Hager. I'd like to request at this time, if I may, by Public Records Act, I would like to have a copy of that that Marine survey to compare it with the original reader's reports, because I know what to look for. I knew several of the ship's original designers and engineers. So I would really like to make that request. I also would like to share a little bit of the history on that document. 22697. That's the current lease that's being amended and restated. That was initially drawn up in 1993 and during Patel's lease it had been. Revised in order to accommodate his nonperformance and non conformance. So I was just wondering how robust that lease is. I really applaud you for holding off. Hopefully you'll hold off on making a decision because I think there are probably lots of things in the lease that have to be looked at in terms of the maintenance needs, in terms of the funding. I know that there was a thing called the Queen Mary Fund that was $6.5 million set aside. Thank you. Ma'am. Time's up. Okay. Could you look into that? We've made we made a note of that. We'll try to connect with you as well. Okay. Can you give the clerk your information, please? And we'll get that for you. Thank you very much. Next speaker, please. Thank you. Oh. $53 million went to the Aquarium of the Pacific. $53 million that they didn't need, but they wanted. For. Beautification of a project that is beautiful. And now we're discussing $23 million. To go to the Queen Mary boat. It sits vacant at night. I don't I'm speaking because my other non-profits who work for the for the homeless are not here. The committee commission newly installed is not here. So someone should be here every time the city council begins to discuss, to use money, expeditiously, implementable funds. But you still have the humans sleeping in the streets. Still. If the marijuana dispensaries were to open tomorrow, I believe I remember hearing someone to my right saying that they would have immediate $1,000,000 to throw into that project to fund the marijuana dispensaries. Now. God is the angels and. The host of heaven. Has assembled again tonight and is listening to this conversation, this meeting. And I worked for him. And when I'm not telling people about the Holy Spirit and Jesus and God and the mission, he's told me to argue, to defend, as if I were a police officer. The rights of the homeless. How can you. With a clear conscience. Continue to do this. How can you? The rains. Are here. You're hoping for more rain. You have a proposal that has been put on your desk as of January 2016. And your piece mealing that thing out. I want to congratulate you for the for the work that you are doing. But you're going to discuss spending $23 million again. And it would just take 1 million to clear your streets of the homeless. Martin Luther King said, I have a dream and we're living his dream tonight. Well, that plan that is on your desk. He gave it to me and he said, this is implementable. And he would ask you again, how can you discuss spending that kind of money when it would just take 1 million to get the homeless off the street? Thank you. Next speaker, please. Then this is our last speaker. The last two speakers kept out offering it back to the council. Thank you. Well, good evening. Diane Roche was trying to ask you about the Queen Mary Fund. That was $6.5 million in the budget previously for repairs. And I, too, would like to know, has that 6 million ever been spent or is this part of the 5 million that you're including in this? Money that you're going to give to add to the 23 million. How in the world have we allowed this ship to require $200 million worth of repair? Somebody has not been overseeing. The funds that were supposed to be spent on this in the past. And I can see. No. Reason to believe that this new lessee is going to do any better. Last year. He said he was going to do all these wonderful things for the Queen Mary if we just give them him the land. Then he gets an idea. He has a survey after his. I guess we haven't signed the lease, but. Urban Commons is now looked at it and said, Wow, I can't come up with $23 million to repair this ship. I would think if. He is made. If this company has made the obligation to get this lease. They should be responsible for the repairs. That was part of the lease. Now we're changing the lease. So that the city is responsible for these repairs. Another thing I had a question about last year was the inclusion of the park. Which is known as Queen Mary Events Park, but it's really Harry Bridges Park, which was mitigation for the park land taken from shoreline to build. The aquarium. This park last year was being included in the lease. I heard no mention tonight whether it was or not, and the public has never seen this lease. We've seen parts of it in the staff report. Have you seen the lease? Are you willing to have this lease be signed when you haven't even read it? I hope that you will at least put this over. If not 30 days. 15 days. So that somebody can. Thank you, Miss Cantrell. Reading the lease. Thank you. And our last speaker, please. Thank you. My name is Ramon. I'll be brief. I know that we got Iran. Got. He's got a quick fuze here. Um, I know. I don't mean like you're angry or anything. I mean, you got to get out of here. That's what I mean to say. Okay. I've been involved with government contracts for a long time, and this type of situation seems to be pretty normal for the city of Long Beach. And I'm not trying to criticize. I'm I'm in I've been involved with ambiguous situations quite often in my my job. And I understand sometimes things get out of hand. And I'd like to thank Councilwoman Mongo for making a great sacrifice and testing out some of the some of the facilities there. Getting her firsthand information. I'd like to. Congratulate Miss Price in in her concerns. I think it's it's pretty clear. One of the things that I'm worried about is that these people were evidently involved with the negotiations and they didn't involve the auditor. While they're doing that, there's something called concurrent, you know, working with people. And I get suspicious when people aren't working. They know the process. They're obviously there, but they're not getting all the people involved. And, um, we do know that we have a situation where we're going to be taking some of the revenue that we think that we're going to be making. And we're going to use it for the interest payments for the bonds that we're taking out. So you're actually I mean, all this stuff that you're doing, it costs money for it. So we're now losing more money to kind of front them. The, uh, the bonds that we're trying to do. And, you know, I understand this is a situation where here, but we also need to do some due diligence with $23 million, we can't just move forward. And the arguments that that my councilwoman in her great wisdom has made doesn't really hit you the root of the cause of why we can't do it. I don't know if if the subcontractor has actually given a date. Hey, look, we're going to suffer. We're going to die by if we don't do 30 days or if the auditor can actually work within a shorter timeframe. But something like that needs to be hopefully worked out. And I'm giving you 40 seconds there, Mr. York. That's it. Thank you. We're going to go to the last few speakers. We're going to get to get to a vote, please. Councilmember Pearce and Councilman Price. Yeah. I want to just one more time. Thank everybody for all your work on this and all the community comments. And I want to urge my council to go ahead and take a vote so we can move on. Councilman Price. Thank you. We do want to hear from Mr. GROSS because he took a seat over there and never got to be heard. So I would like to hear from him, but I also want to highlight that my comments have nothing to do with urban commons. I think we're headed in a great direction. I'm very much looking forward to the future. I am a little bit confused as to how we're there in this predicament where we're talking about the city having to be responsible for these repairs like tonight. Look at the vote has to happen tonight. It's just a discussion we've never had and certainly not something I was aware of. I think that any time your auditor expresses concerns, those with the fiduciary duty have to stop and ask themselves, you know, what, what they feel comfortable doing. And that's going to change with it. It's going to depend on each individual council member. So I appreciate that. But I would like to hear from Mr. GROSS on these financial plans that have been put before us. Mr. GROSS. Thank you. I think it is a I think it Councilwoman Price has raised a good issue that should always be raised when you issue bonds, what is what is the risk? And I'll try to try to address that. From our viewpoint, financial management's viewpoint. What we have is a situation where the lease provides for investment in a city asset, the Queen Mary, and repairs to the Queen Mary. Money flowing into that historic preservation fund. And the concept that we looked at was, okay, we have these urgent repairs and that money flowing over a number of years is not going to do those urgent repairs. Can we make a change? And what financial management did is it came up with using that stream of money. We can convert it to upfront cash of about $17 million. You add 5.8 million from the Queen Mary Reserves and you're at the $23 million to do those urgent repairs. And what is the risk and how did we do that? As as was said by both Mrs. McDermott and Mr. Modica, we are using a bond issue structure that pledges all tidelands funds. That's the typical way we do money to support land area projects. The aquarium is another example where we have pledged all tidelands monies, but we don't expect to use all Tidelands monies because there's rent being paid by the aquarium. In this case, we're moving the money from the H, from the historic preservation account to pay debt service. And that risk has been evaluated through the Economic Development Department and seems logical to be a very low risk that money will not be coming in. We, in addition, looked at the risk of, gee, what happens? We pledged $23 million, 17 of which comes from a bond issue. That's a $19 million bond issue. It yields about 17 million in cash. What's the risk of us having to pay urban commons and something goes wrong with the bond market temporarily? We would have to come up with cash at that time. We consider that risk to be so low as to not be a significant consideration. But we do have to say, if something goes wrong in that second type of risk, yes, we'd have to temporarily use reserves. And we believe that's not going to be an imposition, significant imposition on titans, because eventually, within whatever timeframe of the market stabilizes, six months, even a year, we would return the money to the fund and we don't think there'll be any significant damage overall. Yes, there is risk. We think the risk is either minute in the case of not being able to issue bonds timely or has been evaluated by economic development, financial management thinks that a valuation is reasonable. Evaluated by the department is a very low risk. I thank you for those comments, Mr. Ross. I wonder if that has any impact on the auditor or if there's anything further that the auditor would like to say. It would be nice if we were all on the same page moving forward, and if not, it would be nice if we took a pause to get on the same page. Yes. Thank you for all of the comments tonight. I think, you know, as the elected leader, I feel like I have a duty to express my concerns. My over arching concern is the to the over $200 million of infrastructure needs in the Queen Mary. And I don't think we should ignore the inevitable. It's a significant problem. I. I've been here with the city for over ten years. And these these are serious problems. The queen of this, Queen Mary, has a history with problems. And I feel like we need more than seven days to look at the documents that have been presented, to look at the analysis, to look at the risks, to look at the financing. To look and see how this $23 million investment fits into. A long term plan for the Queen Mary, its infrastructure needs and how it's going to be financed long term. I don't think we should ignore. Uh, the significance of the issues surrounding the ship. So. If the council would feel more comfortable with 14 days rather than 30, it would at least give us a little time, a little more time to to look at this. And we would work as quickly as possible and do as much due diligence as we could. But I really do think that in big picture long term strategy, we need to. Reconsider. Well, thank you for that. I do want to make a couple of comments in regards to Councilwoman Mangos. And, you know, anytime anyone raises an issue about something on the agenda, there's always someone who, you know, chimes in with this has been on the agenda. I don't know why anyone didn't prepare for it. You know, I read every staff report in my agenda and I read all ten pages of the staff report. And until I asked a few questions, I did not realize that committed Tidelands projects could be at risk. And that's where my concerns came. The ten pages here don't say anything about Tidelands projects that have already been committed being the source of a potential risk. So I did read the ten pages. I'm very mindful of when items come out on the agenda. I think I do a very good job of reading and preparing for my council meetings and I meet regularly with department heads. We have regular tidelands meetings. We have a briefing. We had a briefing that I wasn't able to be on today, but I meet with the city manager every week. I did not realize, and perhaps it's written in here and I missed it, although that's doubtful that Tidelands projects that are committed could be at risk. So I have a problem with that because like I mentioned a moment ago, unfortunately there is even though we work really hard to build collaborations and consensus, unfortunately there's an unnecessary. An inappropriate level of risk that already exists that I don't have control over in terms of projects that I've already committed to the constituents of the city. I can't I don't feel comfortable moving forward without and I understand the risk is low. But when the auditor is saying, you know, I need two weeks or a month to look at the numbers so that I can feel comfortable with it, I think that's very reasonable. And, you know, I'm asking my colleagues, I realize that this the tidelands revenue doesn't impact every district, but the the districts that it does impact involve people who work really hard on projects, just like projects in every other district. And just because we need to to have some sort of an insurance policy for a debt doesn't mean we start to put, you know, their projects that we've committed at risk of potentially if something were to happen that those projects are if we can guarantee right now that none of the projects that are impacted and I'm sure Councilwoman Pierce feels the same way, she doesn't want any of the projects that she's committed to her constituents to be attacked. And I would never, ever in a million years disrespect the people that have worked hard on those projects. So I think if we can have some sort of a commitment that those projects won't get impacted as part of this, and I'd feel a lot more comfortable with it. But either I completely missed it or we never discussed this being a potential risk when we approved all of the negotiations and the discussions that we as a council were privy to. So that's my concern is, yes, I do know when the agenda comes out and yes, I'm aware of the index. And yes, I did read the ten page report. It doesn't answer the questions. Thank you. Councilmember Turanga. Covered question. Okay. Questions been called. There is a motion on the floor by Councilmember Pearce and Councilmember Andrews. Please go and cast your vote. Motion carries. Okay. Thank you. Next item we're going to hear is item number. I think it was 18. No, I'm sorry. We just heard 18. 27. Thank you. As we're getting up to the urban common guys, we're back there. I just want to thank you all for your commitment to this project.