SS United States and landlord head to mediation amid ongoing rent dispute

The SS United States missed a Thursday deadline to have a plan to leave its berth in South Philadelphia’s Pier 82. Now, the ship’s stewards, the SS United States Conservancy, and its landlord, Penn Warehousing, are headed to mediation, supervised by a federal judicial officer to ensure all parties are acting in good faith.

In a Friday hearing, the conservancy asked U.S. District Judge Anita B. Brody to extend their deadline to Dec. 5, accusing Penn Warehousing of sabotaging their efforts to sell the vessel to Okaloosa County, Fla. Brody said her order with the Sept. 12 deadline would be suspended for now, pending mediation.

Officials in Okaloosa want to transport the vessel to the state’s warm gulf waters and sink it to create an artificial reef along Northwest Florida’s Destin-Fort Walton Beach shores. A tentative agreement was struck between Okaloosa County officials and the conservancy in late August only to unravel when Penn Warehousing asked the Floridians for a $3 million payment to stay past Sept. 12 in the South Philadelphia berth.

Craig Mills, an attorney for Penn Warehousing, didn’t deny making the opening demand during a virtual hearing Friday and described it as “negotiation 101,” adding that the $3 million penalty had been made public in past court hearings, had been asked of the conservancy before, and should be taken as a starting point for negotiations.

“What was bad faith, your honor, was for Okaloosa County to walk away from the bargaining table after that first conversation, to tell us that they would consult with the county commissioner and get back to us, and then go radio silent for two weeks,” said Mills, pushing back on accusations that the $3 million demand was akin to sabotage.

Mills proposed that the parties enter mediation under the supervision of a magistrate judge, which Brody agreed with.

“There’s no reason in the world why this shouldn’t go forward,” Brody said of the deal.

Okaloosa County, which has representatives at the hearing, also agreed that court-supervised mediation was the way forward.

In a statement, the conservancy said it welcomed court-supervised mediation.

“We remain steadfast in our determination to ensure that the legacy of America’s Flagship endures and inspires future generations,” said the conservancy.

The conservancy has been in a rent dispute with Penn Warehousing since 2021. The Pier 82 landlord wanted to raise the daily rent, the conservancy kept paying the old rent, and the pier operator sought to evict.

Efforts to find a second life for the 990-foot vessel have been a series of false starts and stops over the years. Ambitious proposals to turn the ship into time-share condos or reconfigure it for a cruise line have failed to materialize because of a lack of financing.

Penn Warehousing has said through its attorneys that it wants to regain access to Pier 82 so it can replace the ship with a commercial customer that will bring good-paying union jobs and tax revenues to the city.