Schrager v. Gerber: Déjà Vu All Over Again
On May 10, the day that hotelier Ian Schrager sued his tenant at the Paramount Hotel, Whiskey operator Rande Gerber, for breach of contract, there was a lot of press, but little surprise.
It certainly wasn’t the first time that Mr. Schrager had picked a fight with one of his golden-boy protégés. It wasn’t even the first time that Mr. Schrager had sicced his lawyers on Mr. Gerber, who the court papers alleged was but a “male model and a real estate broker” before Mr. Schrager gave him his break.
“My businesses are under attack by someone I nurtured and trusted,” Mr. Schrager claimed in papers filed in State Supreme Court in Manhattan. The papers alleged that Mr. Gerber violated his contract with Mr. Schrager when he entered into deals to open new bars in New York’s W and Los Angeles’ Park Sunset hotels – establishments that could be perceived as competition to, respectively, Mr. Schrager’s Paramount and Mondrian hotels. “Ian’s position is simply that he helped make this guy,” said Mr. Schrager’s lawyer, Stanley S. Arkin. “He gave him opportunities, and the guy sits there and stabs him in the back.” Mr. Arkin paused reflectively for a moment, then added: “Ian’s a big guy and he’s not going to take that kind of nonsense.”
But where Mr. Schrager and his attorney see betrayal, some in the city’s restaurant and hotel industries see a familiar pattern. The hotelier has a long history of falling in and out of love with the trophy restaurateurs and bar owners that he hires to draw the beautiful, upscale and famous into his portfolio of chic hotels. And, those sources contend, Mr. Schrager’s lawsuit is a sign that his love affair with Mr. Gerber is just about over.
At press time, Mr. Schrager’s side was claiming that the lawsuit against Mr. Gerber was continuing, contrary to a New York Post Page Six item that the legal brouhaha had ended. But a press release put out by Mr. Schrager’s spokesman in this matter, public-relations samurai Howard Rubenstein, noted that Mr. Gerber had signed a stipulation that he would hold no interest in Wet Bar, a watering hole slated to open at the W Court Hotel in New York, or another property at the Park Sunset Hotel in Los Angeles.
In response to this release, Andrew Wintner, a spokesman for Mr. Gerber, told The Transom that Mr. Schrager had the wrong Gerber. “Rande’s never been involved with the bar at the W Court Hotel in New York or the property at the Park Sunset in L.A. His brother Scott Gerber is involved” with those two bars, said Mr. Wintner. “There’s a big difference.”
Mr. Schrager intends to see about that. “We are now going to go into extensive and probing discovery to determine if his representations are true, and the exact nature of his business relations with his brother, Scott,” said Mr. Arkin in the press release, sounding as if he was snapping on a pair of disposable rubber gloves.
In other words, Mr. Gerber can expect the legal fees to start mounting if he intends to defend himself against Mr. Schrager’s charges. Indeed, after reading about Mr. Schrager’s latest legal skirmish with Mr. Gerber – more about the last one later – some restaurant industry sources who are familiar with the situation, wonder if Mr. Schrager’s lawsuit is actually a gambit to free up the Whiskey Bar and Sky Bar spaces at, respectively, the Paramount Hotel in New York, and the Mondrian in L.A.
Gerald McKelvey, a spokesman for Mr. Schrager, denied that the hotelier was trying to push Mr. Gerber-who has four more years on his Whiskey contract; seven on Sky Bar, and nine on the bar at Morgans Hotel on Madison Avenue-from the organization. But the restaurant-industry sources told The Transom that Mr. Schrager’s long-term plans may include installing business partner Jeffrey Chodorow as the man who runs all the bars and restaurants in Mr. Schrager’s 16-hotel group.
Mr. Chodorow told The Transom that he and Mr. Schrager currently shared ownership in 10 restaurants: Asia de Cuba in New York, which is located in Morgan’s and was named the most popular nightspot in Zagat’s 2000 survey of New York night life; four in London, including Spoon, which is helmed by celebrated chef Alain Ducasse; two in Miami; two in L.A. The 10th is an as-yet unnamed restaurant that will open in Mr. Schrager’s latest New York hotel, the Hudson.
Mr. Chodorow said that, all told, he and Mr. Schrager had plans to open “30, maybe 40 restaurants. We’ve got plenty to do,” he said. Indeed, according to one New York restaurant-industry source familiar with Mr. Schrager’s operation, “Ian wants it to be Jeffrey and Alain Ducasse in the restaurants everywhere.”
Mr. Chodorow’s responsibilities already are extending beyond just the restaurants in Mr. Schrager’s hotels. He runs the bars at the Sanderson and the St. Martin’s Court in London, and he seems eager to take on more.
When The Transom asked Mr. Chodorow if he intended to have a restaurant in every one of Mr. Schrager’s hotels, he replied: “That’s the plan.”
The plan is interesting given that two hotels where Mr. Chodorow’s influence has yet to be felt are the Paramount, home of Pino Luongo’s Coco Pazzo Teatro and Mr. Gerber’s Whiskey, and the Royalton, where Brian McNally operates the former Condé Nast cafeteria, “44.” Mr. McNally also once ran The Blue Door restaurant at Mr. Schrager’s Delano Hotel in Miami Beach, but Mr. Chodorow has since taken the reins of that restaurant.
Mr. Chodorow didn’t exactly deny that he’d like to get his hands on at least one of the spaces. “I certainly am interested in doing the space,” said Mr. Chodorow of Mr. Luongo’s restaurant in the Paramount. “[Pino's] got a lease and I don’t know what the status of it is. If Pino ever wants to get rid of it, I’d certainly think about it.” It wouldn’t be the first time that Mr. Chodorow opened one of his places in a space formerly occupied by Mr. Luongo. In 1999, Asia de Cuba replaced Coco Pazzo at the Mondrian in L.A.
Meanwhile, Mr. McNally said by telephone that he has four years left on his fourteen-year lease at the Royalton’s “44″ and that the chances were “slim” that he’d be renewing the lease.
Asked if he wanted to run Whiskey in the Paramount, Mr. Chodorow replied: “I basically told Ian that whatever he wants me to do I’d be willing to do. We have an excellent relationship.”
Mr. Gerber once had a similar relationship with Mr. Schrager but, for the moment, he does not. And news of Mr. Schrager’s suit against had a déjà vu quality to it.
“It does sound quite familiar,” said Philippe Lajaunie, who owns Les Halles, a chain of French bistros in New York, Miami, Tokyo and Washington, D.C.
In 1992, Mr. Lajaunie opened a restaurant called Brasserie des Théâtres in Mr. Schrager’s Paramount Hotel on West 46th Street. That same year, Mr. Schrager took Mr. Gerber to court for failure to pay rent, for improperly using the service elevator and for allowing the Whiskey’s patrons to use the Paramount bathrooms. In 1993, before Mr. Schrager dropped the suit and asked Mr. Gerber to do Sky Bar at the Mondrian, Mr. Gerber complained that Mr. Schrager had cost him close to $200,000 in legal fees.
In July of the following year, it was Mr. Lajaunie’s turn. Mr. Schrager sued to evict Brasserie des Théâtres’ proprietor for unpaid rent. Mr. Lajaunie counter-sued, alleging that Mr. Schrager fraudulently induced him to develop the Brasserie “through a series of material misrepresentations regarding the construction, financing and marketing of the restaurant.”
“It seems that Ian Schrager sometimes comes up with schemes to attract talent, and of course talent comes on the basis of a mutual agreement,” said Mr. Lajaunie. “Ian Schrager sometimes seems to forget that he’s part of the agreement.”
At the time, Mr. Lajaunie told The Observer that he thought Mr. Schrager was trying to bump him out of the space in order to make room for a man who had eclipsed Mr. Lajaunie in Mr. Schrager’s universe: Mr. McNally, a scrappy-but-charming Brit who had captured the social Zeitgeist in the late 80′s with a restaurant called 150 Wooster. Ironically, Mr. McNally, had been installed at “44″ after another young restaurateur, Mr. Chodorow, couldn’t make the spot sizzle in quite the way Mr. Schrager had hoped.
In 1994, after Mr. Lajaunie and Mr. Schrager settled their suits and Brasserie des Théâtres closed, Mr. Lajaunie was proved wrong. Mr. McNally never did take over the Paramount restaurant. Although Mr. McNally and Mr. Schrager had discussed the possibility, Mr. Schrager announced that a temperamental Tuscan named Pino Luongo would put a branch of his hot Upper East Side restaurant, Coco Pazzo, in the Paramount Hotel.
But both Mr. Luongo and Mr. McNally have since become former golden boys in Mr. Schrager’s book. In a 1997 interview with New York magazine, Mr. Schrager called Mr. McNally “a fake,” and “inept,” and Mr. McNally returned the favor by telling the Times of London, that Mr. Schrager “has had a nervous breakdown in public.” Mr. McNally said that his current relationship with Mr. Schrager is “very friendly.” (Mr. Luongo did not return phone calls, but a source said that his relationship with Mr. Schrager was strained.)
That’s the thing with Mr. Schrager. Former golden boys can redeem themselves if they play their cards right, as Mr. Chodorow seems to have.
“With Ian, it’s not like you’re a golden boy one minute and something else the next,” said Mr. Chodorow. “It’s a question of whether you can perform at a very high level, and Ian wants to make sure that if you have a relationship, that it’s a relationship that’s important to you.”
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