Arkansas Queen ceases cruises

Owners say NLR broke contract; boat to be sold in New Orleans

— Owners of the Arkansas Queen riverboat notified North Little Rock Mayor Joe Smith by letter Tuesday that the riverboat business ceased operation on the Arkansas River as of Sunday, claiming a breach of contract by the city.

The riverboat has been under a 10-year contract with the city to operate river tours from a portion of the city-owned Arkansas Inland Maritime Museum complex for almost seven years.

The 350 feet of riverbank the riverboat business leases from the city will be returned to city control by Feb. 28, the letter stated.

“We’re disappointed their business venture here in central Arkansas didn’t work out and we wish them well in any future endeavors,” Smith said in an interview Tuesday afternoon at City Hall.

Roger Odell, the riverboat’s general manager, said in an interview that it’s not yet known when the riverboat will pull out of North Little Rock, but that winter cruises for groups had been stopped. The riverboat also operates dinner and river tour cruises to the public between March and October.

The riverboat’s website, arkansasqueen.com, showed a message Tuesday that said operations had ceased as of “Jan. 6, 2013.” The notification wasn’t on the website Monday afternoon.

“We’re taking the boat to New Orleans to a shipyard where it will change ownership,” Odell said. “It’ll be up to them where it’s going.”

Ownership is under the Mississippi Riverboat Co. LLC, Odell’s letter said. The city’s contract that leases the riverbank and the city-owned tugboat Patriot for the riverboat’s operation is with Arkansas Queen LLC.

The Patriot is used as the riverboat’s business offices, galley and gift shop under the 10-year contract approved by the North Little Rock City Council on Jan. 12, 2005. Riverboat excursions started in April 2006.

The lease runs until January 2015, but there are no penalties associated with ending the contract early, city officials said.

However, Odell’s letter, dated Monday, said the city created “a substantial breach” of the lease when it didn’t replace the Salty Parrot barge used as an offshore restaurant next to the riverboat. The barge sank into the river in March 2009 and was later sold for scrap.

“We asked the city to replace it,” Odell said. “They had been looking for a barge, but that has never materialized. As a result, that basically was 25 percent of our revenue. When you take that amount away from you, that puts pressure on the other side.”

City Attorney Jason Carter responded Tuesday that he has been in previous conversations about the Salty Parrot issue with riverboat management and doesn’t agree with their opinion. The city’s lease doesn’t include any mention of the Salty Parrot, he added.

The city doesn’t have “any duty whatsoever to replace the Salty Parrot as stated” by the riverboat company, Carter said.

Under the lease the riverboat is contracted to pay rent to the city equal to 1.5 percent of its annual gross revenue when revenue reaches between $1.5 million and $2 million, with higher percentages for amounts exceeding those figures. The city never received any rent payments, according to city records.

The Arkansas Queen paid the city’s Advertising and Promotion Commission $4,048 in restaurant taxes and $4,005 in mixed-drink taxes in 2010, according to commission figures Tuesday. In 2011, the riverboat paid $4,374 in restaurant taxes and $3,350 in mixed-drink taxes. Through November last year, the figures paid were $3,452 for restaurant taxes and $3,957 for mixed-drink taxes.

Any group that has placed a deposit for a river cruise or individuals holding prepaid gift certificates can contact the Arkansas Queen at (501) 372-5777 for refunds, Odell said.

“Just give us a call,” Odell said. “We’ll be settling up with everybody.”

Arkansas, Pages 9 on 01/09/2013

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