$2.6 million bid wins SS United States International group plans renovation

NEWPORT NEWS, VA. — NEWPORT NEWS, Va. -- The SS United States, which had seemed bound for the scrap heap, got a reprieve yesterday when it was sold at public auction to a group of international investors who intend to send the vessel back to sea as a cruise ship.

"We're going to fix it," Fred Mayer, chief executive officer of Marmara Marine Inc., said after his group won the ship with a bid of $2.6 million.


Forty years ago, on its maiden voyage, the ship smashed the record for a trans-Atlantic crossing. Taken out of service 23 years ago, the ship now sits decaying at a Newport News coal pier. The paint on its nearly 1,000-foot-long hull is blistered and peeling, the metal at the waterline sloughing off in long rusty sheets.

Harold and Jane Larsen from McLean, Va., sailed on the ship from France soon after they were married in Europe in 1953, less than a year after the ship went into service. With memories of the ship in its glory days sharply etched in their minds, they were shocked to see the condition of the ship when they visited it yesterday morning. "A derelict, a bum," Mrs. Larsen said.


Mr. Mayer said his group intends to restore the ship to its past glory. "The vessel itself is a magnificent piece of engineering. It would be a shame to see it go to waste," he said.

Marmara Marine plans to tow the ship to Istanbul, Turkey, and spend about $150 million on its rehabilitation. That would be substantially less the $300 million it would cost to build a new ship, Mr. Mayer said. "How can you go wrong if you convert it for half the price," he said.

Marmara's successful bid came as a pleasant surprise to those who hope to see the ship go to sea again.

"Everyone thought the only real interest was going to be from scrap dealers," said Waverley L. Berkley III, a lawyer representing the interests of Skopbank, a Finnish bank that is holding a mortgage on the ship of more than $6 million.

Mr. Berkley was happy that he did not have to bid to protect the bank's interests, which might have happened if the bids had been too low. As it turned out, the bank welcomes the prospect of getting back roughly a third of its investment. "We liked the sound of $2.6 million in hard greenbacks," he said.

CSX Transportation Inc., which owns the pier where the ship is docked, had also pressed for the auction to recapture the $270,000 it is owed in back wharfage fees from the ship's owner, United States Cruises, a company controlled by Seattle developer Richard Hadley.

The bank was also pleased not to have been cast in the role of villain because of the part it played in pushing ahead with the sale.

Yesterday morning, a federal judge in Norfolk, Va., refused to postpone the sale when the bank objected to a delay. The sale, originally set for early February, was postponed then after United States Cruises filed for Chapter 11 bankruptcy protection.


"We hated to be the culprit that had it sold for scrap," Mr. Berkley said. "I think everyone would like to see the old lady go to sea again."

Mr. Mayer said his group is still trying to work out the financing. If the money cannot be raised, then Marmara will be forced to scrap the ship. "That's another route we might have to take if we're not successful in our endeavors," he said. But that's not what he wants to see happen. "I don't want to hear about that. That would be a last resort," he said.

There is a threat from another front that also could lead to scrapping. A group from the United States that also bid on the ship said it will challenge the sale to Marmara if the company tries to reconstruct the ship overseas and then operate it under a foreign flag.

The SS United States, which was designed so that it could be quickly converted to a troop ship, was constructed with the help of a large subsidy from the federal government. U.S. law prohibits sale of the ship to anyone who would operate it under a foreign flag, said Richard J. Jaross, who represented NR Vessel Corp. at the auction. His group intends to scrap the ship if they win control of it, he said, though the company would be willing to sell it to an American group with the means to save the ship.

"If he tries to transfer it foreign, I'm going to object," Mr. Jaross said.

Marmara, according to Mr. Mayer, is a closely held Delaware corporation created expressly to buy and refurbish the SS United States. He said some of the money would come from Marmara, whose main stockholder is Juliedi Sadikoglu of the Turkish shipping family, Reuters reported.


The American flag was still flying from the mast yesterday, raised by James Rindfleisch, custodian for the ship for the U.S. Marshal's Office. Flying just below the flag was a long blue pennant that represents the Blue Riband, the prize for the fastest time across the Atlantic -- 3 days, 10 hours and 40 minutes. Only a catamaran has done better.

"Only the world's fastest ship can fly that," Mr. Rindfleisch said. "It's entirely fitting that the queen of the American merchant marine should be showing her colors, what there are left of them."

Mighty ocean liner rusts at dock

Built: 1950-52, in Newport News, Va.

Cruising speed: 32 knots (37 m.p.h.)

Top speed: 38 knots (44 m.p.h.)


Avg. number of passengers: 1,700

( Crew and officers: 1,036

United States -- highlights:

* Maiden voyage: July 3-7, 1952, New York to Southhampton, England, and Le Havre, France

* Last voyage: Nov. 1-7, 1969, Bremerhaven, West Germany, to New York via Le Havre and Southampton

* Total Atlantic crossings: 400


* Total miles sailed: 2,772,840

* Transatlantic passengers carried: 1,002,936

* Total cruise passengers: 22,755

* Fastest Atlantic crossing for a conventional liner: 3 days, 10 hours, 40 minutes in 1952 on maiden voyage. (In 1986, the Virgin Atlantic Challenger -- a 65-foot power boat -- set the overall record in 3 days, 8 hours and 31 minutes.)