THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, February 17, 1995 TAG: 9502170511
SECTION: FRONT PAGE: A5 EDITION: FINAL
SOURCE: BY EARL SWIFT, STAFF WRITER
LENGTH: Medium: 66 lines
Owners of the aging superliner United States hope to steer the ship through familiar but rocky waters in a bid to keep the one-time queen of the Atlantic passenger trade from becoming razor blades.
New York shipping executive Fred Mayer said Thursday that his company may ask the federal government to back its renovation of the mammoth ship, a project he said would cost ``well in excess of $200 million.''
If the company goes through with the plan, it will become the second of the United States' owners to seek Washington's help in transforming the transatlantic liner into a cruise ship.
But winning that help is a long shot: A previous owner's request for backing was turned down by the U.S. Maritime Administration in 1986.
A MarAd source said privately that another try would stand only a ``one in three'' chance of success.
Its cabins demolished, its once-grand lounges stripped to bare metal, the largest and fastest passenger ship ever built in America now floats empty and powerless in the waters off Istanbul, Turkey, its part-time home since it left Hampton Roads under tow in June 1992.
Mayer's firm, Marmara Marine Inc., bought the long-idle liner at a Newport News auction earlier that year, intending to have it revamped at a Turkish shipyard and returned to steam under a flag of convenience.
Like so many plans for the famous ship, Marmara's hit snags, ranging from Greenpeace demonstrations over asbestos in the liner's innards to the collapse of the firm's original financing scheme.
``We thought at the time we would get all the financing from the Turkish government,'' Mayer said in a telephone interview.
``Unfortunately, the president who gave us that assurance, he passed away.''
That has left the company with a handful of financing options, among them seeking loan guarantees from MarAd to cover 87 1/2 percent of the refit.
MarAd oversees such loans as part of the leg-up Washington provides American shipping to help keep it competitive internationally.
If Marmara now pursues American tax dollars, it faces having the work performed at an American shipyard - and operating the vessel under the American ensign.
That would boost the ship's costs, though Mayer said he did not know by how much. He is beginning talks with American shipyards to get a handle on prices, he said. He refused to identify the yards.
Marmara's flirtation with a loan application comes nearly a decade after a bid for $152.3 million in guarantees by Richard Hadley, a Seattle real estate entrepreneur and the ship's last owner. Hadley wanted the money to ``completely renovate, update and alter the vessel'' but saw his bid rejected.
Asked what would make a Marmara venture more attractive, Mayer said only: ``Richard Hadley's time was not the right time. Now is a better time.''
Though the project faces long odds against winning government cash, a MarAd official said the absence of asbestos in the ship does make it a more practical investment than it was under Hadley's ownership.
``The hull is empty,'' he noted. ``And remember, the price of building a new ship has gone up in the last few years. Where it cost $200 to $230 million to build then, it costs $370 to $380 million to do it now. So if you can put together a proposal to refit this for $300 million, it doesn't look so bad, does it?'' by CNB