CBS2 Investigates: Garcetti May Pull The Plug On City-Owned Yacht Costing Taxpayers Millions
PORT OF LOS ANGELES (CBS2) — L.A. Mayor Eric Garcetti says it may be time to do away with the city-owned yacht after CBS2 uncovered that renovation costs were in the millions of dollars.
"It's a misuse of taxpayer dollars," the mayor said.
CBS2 Investigative Reporter David Goldstein has been following the money for two years and says "Angelena II" still isn't approved for use by the U.S. Coast Guard.
The problem stems in the 73-foot yacht's batteries. The batteries were part of a first-of-its-kind conversion to a hybrid system to improve air quality. Renovations began two years ago.
The vessel, purchased in 1988, is being used as a tour boat by the city-owned Port of L.A.
But the Angelena just sits in the port because it still hasn't been cleared for use by the Coast Guard.
Now the port is taking action.
"Personally, I'm very disappointed in this project and I'd like to see this being made whole," said Jim Morgan, the port's director of construction and maintenance.
A notice of default, obtained by CBS2 News, was sent to EnergyTech Marine Group, the company that designed the hybrid technology.
The city is claiming defects such as "dysfunctional battery management system" and "faulty cabling design."
That gives EnergyTech until June 20 to cure this default or the company faces legal action.
"We're telling our vendor, 'Look, enough is enough. You've either got to put up or we're going to have to look for other alternatives."
But the president of EnergyTech, Jack McCoy, says it's the city's fault.
McCoy told Goldstein, "The port hasn't completed its part of the construction" and EnergyTech has done all the work it's been contracted to do.
Renovations began under former Port Director Geraldine Knatz, who announced her retirement last fall, weeks after CBS2 revealed the cost of renovations.
The original budget was $700,000, but CBS2 found the costs skyrocketed to $3.2 million in September 2013.
The latest figures show renovations, as of this April, are at $4,017,616 in public money — and counting.
Meanwhile, the Angelena still sits.
"Do you think it's time to pull the plug?" Goldstein asked Garcetti.
"I will certain look and ask our new executive director of the port to look at whether that's something we should do, should we even have this and if we're midstream, sometimes you're too far in to stop," the mayor replied. "But I want accountability for what happened and, if we can, maybe even pull the plug."
While the port spends millions on Angelena restorations, it seems they can't go without a tour boat, since they're now renting another one. CBS2 found invoices for tens of thousands of dollars: one invoice rang in at more than $14,000 for one month, another $13,000, and dozens priced at $1,600, with an $800 hourly rate.
The total comes out to nearly $250,000 in public money spent on rentals since the Angelena has been out of service.
The guest lists show foreign trade partners who do business at the port, but others who don't, such as USC students.
It's all money that's being spent while the port and the city are looking at millions of dollars in cost overruns for the Angelena.
"I think it's appalling that we're at this situation. This is something that, if they had had full information, we shouldn't have gone forward with it in the first place," Garcetti said.
Now the clock is ticking on the Angelena renovations, with a June 20 deadline to get the ship sailing — or else.
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