The iconic but financially struggling Queen Mary ocean liner, docked for decades as a hotel and tourist attraction in Long Beach, California, may be in danger of sinking.

The warning was included in filings by the city of Long Beach in a bankruptcy case involving the parent of the ship’s former operator, Urban Commons, which Long Beach officials claim owes the city more than $40 million for overdue repairs, rent and other unpaid fees under a lease agreement.

City officials said in bankruptcy court filings last month that the 87-year-old ship’s hull has structural and water-tightness integrity issues. The "current status of bulkheads and lack of a functioning bilge pump system and flood alarm system could lead to flooding throughout the ship, potential capsizing of the ship and life safety and environmental issues to the extent that flooding occurred,” documents state.

The current circumstances mark a stark turnaround in the fate of the ship, once known for mid-20th century celebrity glamour and opulence, that has been a fixture on the Southern California waterfront for decades and surrounded by events and crowds. Representatives of Urban Commons did not immediately respond to a request from CoStar News for a comment.

Among other structural issues, the city said the piping system has leaks, and sewage holding tanks are compromised and inaccessible under state safety guidelines. Components in need of replacement include the ship’s emergency power generator and boilers that provide heat and hot water throughout the property, according to the city’s consultant, Elliott Bay Design Group.

City-appointed engineers have been warning for the past two years about potential problems related to structural and other deterioration on the Queen Mary, which was built in Scotland in 1934 and is now located about 25 miles south of Los Angeles in Long Beach Harbor.

From its maiden voyage in 1936, the Queen Mary was known for trips taken by numerous celebrities and dignitaries. It docked in Long Beach after its 1967 retirement and opened to tourists in 1971 following an extensive renovation. The ship has 346 guest rooms, three restaurants and three bars, and is listed among the National Trust for Historic Preservation’s Historic Hotels of America.

Before the pandemic, the iconic ship was a popular location for public festivals, weddings and on-board tours. It generated more than $115 million in direct annual spending from visitors and event operators prior to the pandemic. That resulted in more than $6 million in tax revenue and $200 million in overall economic activity for the Los Angeles region, according to a May 2020 report by Beacon Economics commissioned by Urban Commons.

It has gone through several operators over the years and has been closed since May 2020 because of the pandemic.

Today, the Queen Mary is among several properties owned by Eagle Hospitality Trust, which in January filed for Chapter 11 protection in the Delaware bankruptcy court as it seeks to sell off its nationwide assets and restructure its finances.

The city in April claimed that Eagle’s Urban Commons unit owed Long Beach more than $21 million for needed repairs, rents and other unpaid fees, but the city has since revised that to at least $41 million after further inspections of the ship.

The sale of 14 Eagle Hospitality Trust properties is nearing conclusion pending bankruptcy court approval of successful bids, but the list does not include the Queen Mary.

City officials said a reopening date has not yet been set for the Queen Mary. It will not reopen until structural issues identified by its engineers have been addressed by the current or future operator of the property.

“The city will continue to work through the bankruptcy court to ensure the current or future Lessee is required to complete these repairs,” a statement from the city of Long Beach said.

Urban Commons has said publicly that the loss of revenue during the pandemic made preservation efforts difficult.

The city is investigating how Urban Commons spent $23 million in city funds allocated to the operator for repairs to the Queen Mary under a 2016 lease agreement. The city said in court documents that various repairs were not started, left incomplete, performed incorrectly or are in need of having to be redone. There are also issues related to unpaid county property taxes and city utilities payments.

Among other problems, city officials said in court filings a structure near the ship known as the “Spruce Goose” dome, once used by billionaire Howard Hughes to build and store planes, needs work to prevent structural integrity problems. Officials said cruise ship operator Carnival uses the dome, which was overseen by Urban Commons under its lease with the city, for passenger loading at its Long Beach Harbor terminal.