Gambling ship up for bids
Beset with problems since before its first official excursion, the ship will be auctioned off by its bankrupt cruise line in January.
By STEVE HUETTEL
Published December 29, 2005
[Times photo: Brian Cassella]
The Ocean Jewel is docked at Tampa Bay Shipbuilding & Repair Co. as Titan Cruise Lines searches for a buyer. Potential bidders will be required to put up a $100,000 deposit when the vessel is auctioned off on Jan. 9.
TAMPA - Bankrupt Titan Cruise Lines wants, quite literally, to give up the ship.
Titan will hold an auction next month to sell the Ocean Jewel, a 450-foot casino ship that St. Petersburg officials once hoped would revive the city's small port and become a downtown attraction.
Titan filed for bankruptcy protection on Aug. 1 and tried to find investors to bail out the company, said Greg McCoskey, a Titan attorney.
"But we couldn't find anyone to make a firm offer on the business as a going concern," he said. With bills for maintaining the Ocean Jewel at a Tampa shipyard piling up, McCoskey said, Titan had no choice but to sell the Ocean Jewel and its assets.
More than 200 creditors filed claims against Titan totaling nearly $69-million.
The city of St. Petersburg says the company owes $159,000 in unpaid dock rent and passenger fees. But the city is holding a $108,000 deposit from Titan that could help offset the loss, said Joe Zeoli, the city's managing director of development administration.
First American Bank in Illinois, which financed the startup company, is the largest creditor. The bank says Titan owes more than $30-million in loans secured by company assets.
Titan was plagued with problems soon after the day in December 2002 when company officials and Mayor Rick Baker announced the ship would make daily gambling cruises from the Port of St. Petersburg.
Within months, Titan lost a local representative who was serving as chief financial office r and the company was sold to four Chicago-area businessmen.
New homeland security regulations, U.S. Coast Guard screenings and four hurricanes last year delayed the ship's launch until October 2004. Then, its maiden voyage was marred when docking problems kept tired passengers waiting three hours to get off the ship at 5 a.m.
Titan eventually moved the Ocean Jewel into international waters and ferried passengers to the ship using high-speed catamarans from St. Petersburg and John's Pass in Treasure Island. The company stopped operating from St. Petersburg in July. Under pressure from vendors for unpaid bills, Titan filed for bankruptcy the next week.
The Ocean Jewel needed more than $1-million in repairs, money Titan didn't have. Barring a bailout from a new investor, the company told 415 employees they would be out of work when the ship's certification for insurance expired in mid October.
A financial adviser shopped the company around among gambling operators in Florida, Texas and Mississippi without success, Titan said in a bankruptcy court filing last week.
Keeping the ship in shape to run at Tampa Bay Shipbuilding & Repair Co. is costing in the hundreds of thousands of dollars per month, said McCoskey, the Titan attorney.
Titan will auction the Ocean Jewel, a catamaran and other assets on Jan. 9 to bidders who post a $100,000 deposit and information that establishes they can complete a sale.
The company asked bankruptcy Judge Alexander Paskay for a hearing Jan. 11 to approve a bidder selected by Titan. No minimum bid was set, and McCoskey wouldn't say how much Titan thought the ship was worth.
Proceeds should easily cover about $2-million in secured claims from creditors, such as St. Petersburg, which supplied maritime services to the vessel, he said. First American Bank, which would be next in line, could block the sale if it thinks the sale price is too low, McCoskey said.
In 10 months of operations, the Ocean Jewel brought 125,000 passengers to the Port of St. Petersburg, less than half the 350,000 the city projected for its first year, said Zeoli of the city.
Still, the city could end up as much as $300,000 in the black from Titan's time at the port, Zeoli said. If it doesn't get any of the bankruptcy claim, he said, St. Petersburg would make about $150,000.
Steve Huettel can be reached at email@example.com or 813 226-3384.
Ocean Jewel history
Oct. 22, 2004: The Ocean Jewel takes its first trip into international waters to begin gambling operations.
Dec. 5, 2004: A tram that carries passengers of the Ocean Jewel from the dock to the parking garage catches fire; no one is injured.
Jan. 13, 2005: High winds and rough seas keep the shuttles from operating, forcing the gambling ship itself to return to shore with more than 300 people aboard.
Jan. 25: The Ocean Jewel is detained at port when the Coast Guard finds numerous fire safety infractions. The gambling ship is back at sea two days later after complying with regulations.
April 9: The Friendship IV, an 80-foot catamaran ferrying passengers out to the Ocean Jewel, veers into a barrier at the base of John's Pass Bridge while avoiding a smaller boat, causing about $50,000 in damage.
April 23: 550 passengers on the Ocean Jewel are stranded overnight when the weather is too rough for the shuttles to make the trip.
April 22-23: The Coast Guard reports bad weather contributed to two accidents when the 149-passenger Friendship IV brushed against the northern bridge pilings, causing superficial damage to the bridge.
May 3: The Patriot, a catamaran in training for the Ocean Jewel, strikes the bridge barriers. The bridge is not damaged.
July 26: Titan Cruise Lines, owners of the Ocean Jewel, officially discontinues passenger operations at the St Petersburg port but continues to ferry passengers out of John's Pass in Treasure Island.
Aug. 1: The owners of the Ocean Jewel file for Chapter 11 bankruptcy protection.
Aug. 23: Nearly 100 gamblers are stuck for almost 26 hours aboard the Ocean Jewel after its shuttle breaks down.
Mid October: Needing more than $1-million in repairs, the Ocean Jewel stops sailing and docks at a ship yard in the Port of Tampa.
Dec. 22: Titan Cruise seeks permission in bankruptcy court to sell the Ocean Jewel at an auction in January, with proceeds paying off its creditors.
Compiled by Times researchers Caryn Baird and Angie Holan.
[Last modified December 29, 2005, 01:00:08]
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