WILMINGTON, Del. — Costs to restore the former presidential yacht Sequoia to seaworthy condition range from less than $400,000 to upwards of $4 million, experts testified in a Chancery Court hearing on the fate of the historic wooden vessel.
Vice Chancellor Sam Glasscock in Georgetown is being asked to decide a contract dispute over a loan between Sequoia Presidential Yacht Group LLC and FE Partners LLC. Glasscock must determine the price the lender, FE Partners, must pay to exercise an option to buy the yacht.
In its glory days, the Sequoia was a spit-polished, floating mini-palace, on which presidents from Herbert Hoover to Jimmy Carter entertained dignitaries and diplomats, or simply sought refuge from the Oval Office and the glare of the international spotlight.
In more recent years, the privately owned, 104-foot wooden vessel, which Carter had sold in 1977, has been used for entertaining and sightseeing tours of the Potomac River, offering four-hour charters for $10,000 (plus food and drink) from its dock at a Washington, D.C., marina.
Now, the National Historic Landmark, built in 1925, lies rotting under a layer of shrink wrap in a Virginia shipyard as attorneys argue over who should pay to repair it, how much it will cost, and who will ultimately own the vessel.
A string of boat experts described the condition of the boat and the work that needs to be done.
The historic vessel, designed by John Trumpy and built at the Mathis Yacht Building Co. of Camden, N.J., in 1925, has been in dry dock at Chesapeake Boat Works in Deltaville, Va., since late 2014, as the dispute continued.
"It is unfortunate that she has had to suffer for the last year and half," said Earl McMillen III, founder of McMillen Yachts in Newport, R.I.
He estimates repairs would cost $3.9 million to $4.2 million.
"It's not a pretty sight," said McMillen, who as overseen the restoration of other Trumpy-designed yachts.
McMillen said there is extensive rot in the hull and several of the structural blocks that make up the hull are cracked. The boat should have new wiring, new plumbing and new, marine-grade air conditioning, he said.
He recommended it be slid onto an ocean-going barge and shipped to Rhode Island for repairs. The area has the expert shipwrights needed to do the work, he said.
In her present condition, "would you ever put passengers on her?" asked an attorney for FE Partners.
"No," McMillen said.
"Would you ever put her in the water?" the lawyer asked.
"No," McMillen said.
Meanwhile, Gary Silversmith, a Washington lawyer and real estate developer who owns the Sequoia, questioned whether there weren't capable boat yards along the Chesapeake Bay where the work could be done at less cost.
Restoring and repairing wooden boats is "a lost art," McMillen said. "I think, quite frankly, that's why they don't build wooden boats anymore. They are wonderful works of art."
The Sequoia's history makes it more than just an aging wooden boat. Franklin Delano Roosevelt hosted Winston Churchill on its deck; John F. Kennedy celebrated his last birthday on board the Sequoia; and Richard M. Nixon spent a night in 1974 with a bottle of whiskey at a shipboard piano before he resigned the presidency.
After Carter sold the yacht, it passed through a series of private owners. It fell into disrepair before it was purchased and restored by its current owner, Silversmith. He said he paid $1.9 million in 2000, and sank millions into repairs.
Silversmith operated the boat as a charter on the Potomac River. He said that he has maintained and cared for the boat and even took it to the Chesapeake Maritime Museum in St. Michaels, Md., for repair. The boat was regularly hauled out of the water for maintenance, he said.
In 2012, the Sequoia group, led by Silversmith, entered into a $7.5 million loan agreement with FE Partners, an investment entity formed by Washington, D.C.-based Equator Capital Group and members of the Timblo family of India, which has interests in the mining and hospitality industries.
Under default terms of the loan agreement, FE Partners can exercise an option to purchase the yacht for $7.8 million.
Sequoia filed a lawsuit in 2013 seeking to prevent FE Partners from exercising its purchase option, but it later agreed to a default judgment in favor of FE, which alleged that it was fraudulently induced and that Sequoia had breached the loan agreement.
FE Partners has declined to exercise its option, however, as attorneys argued over how much the option price should be reduced because of needed repairs, liens and other outstanding liabilities. FE says it is already owed more than $3.8 million in loan repayments and legal expenses.
Silversmith claims FE Partners is grossly overestimating the cost of needed repairs as part of a trial strategy to drive up the purported liabilities in order to acquire the Sequoia for little or nothing out of pocket.
"It definitely needs work, but it doesn't need to be rebuilt," he said during a break in Wednesday's hearing.
The Sequoia ownership group contends that it will cost only about $310,000, as estimated by Chesapeake Boat Works, to address problems outlined in Coast Guard inspections and to get the Sequoia floating again.
Following the day-long hearing, Glasscock, who has taken a keen interest in the case while also expressing frustration at the long-running legal battle, told attorneys he is considering hiring his own independent marine surveyor to determine what repairs are needed.
Contributing: The Associated Press. Follow Molly Murray on Twitter: @MollyMurraytnj