Conservancy, landlord headed to mediation amid ongoing rent dispute for historic ocean liner

The conservatory that oversees a legendary but outdated ocean liner and the landlord plan to mediate in an attempt to resolve a years-old lease dispute that could result in the historic ship leaving its berth on the Delaware River in Philadelphia.

A federal judge had ruled in June that the conservancy had until Thursday to present plans to move the SS United States, a 1,000-foot ocean liner which still holds the transatlantic speed record it set more than 70 years ago. That deadline came and went, however, after the conservancy filed a lawsuit Wednesday accusing Penn Warehousing of sabotaging its efforts to sell the ship. The group also asked U.S. District Judge Anita B. Brody to extend the plan’s deadline to Dec. 5.

During a hearing Friday, Brody agreed with a Penn Warehousing attorney who proposed mediation, which will be led by a federal magistrate judge. She also agreed to temporarily suspend the deadline.

No timetable has yet been set for the mediation.

The conservatory welcomed the mediation proposal and said it would “continue to work in good faith to resolve this dispute and move the ship safely.”

The conservancy is in talks with a Florida county that wants to acquire the ship and turn it into the world’s largest artificial reef. Those plans were put on hold earlier this month when Penn Warehousing asked Okaloosa County for a $3 million payment to meet a deadline.

During Friday’s court hearing, an attorney for Penn Warehousing described the request as “negotiation 101.” The Philadelphia Inquirer reportedCraig Mills also said the payment had been made public in hearings before, that the conservancy had asked for it before, and that it should be used as a starting point for negotiations.

The lease dispute stems from an August 2021 decision by Penn Warehousing to double the ship’s daily berth fee to $1,700, an increase the conservancy refused to accept. The company, through its attorneys, has said it wants access to the berth again so it can replace the ship with a commercial customer that would bring jobs and tax revenue to the city.

When the conservatory continued to pay the old 2011 rate, Penn Warehousing terminated the lease in March 2022. After much legal wrangling, Brody filed a lawsuit in January, but also encouraged the two parties to settle rather than leave it to her.

Ultimately, she ruled that the conservancy’s failure to pay the new rate did not constitute a breach of contract or entitle Penn Warehousing to damages. She did, however, find that under Pennsylvania contract law, the mooring agreement may be terminated at will upon reasonable notice.

The SS United States, christened in 1952, was once regarded as a beacon of American engineering, and also served as a military ship capable of transporting thousands of troops. On its maiden voyage in 1952, it broke the transatlantic speed record in both directions, when it reached an average speed of 36 knots, or just over 41 mph (66 km/h), The Associated Press reported from aboard the ship.

During that voyage, the ship crossed the Atlantic in three days, 10 hours, and 40 minutes, beating the time of the RMS Queen Mary by 10 hours. To this day, the SS United States holds the transatlantic speed record for an ocean liner.

In 1969 it became a reserve ship and later came into the hands of various private owners who hoped to redevelop the ship, but in the end their plans proved to be either too expensive or too poorly timed.

It has been a landmark on the Delaware waterfront in South Philadelphia for years.