The Room Servicers

One project that you’re now finishing up is the Jane, formerly the Hotel Riverview, in partnership with Sean MacPherson and Eric Goode, also your partners in the Bowery Hotel and the Maritime. The Jane is one of several old SRO buildings now being converted into a modern boutique hotel. Moving out tenants to make room for tourists and business travelers is a total headache. What’s the payoff?

Mr. Born: We don’t move people out.

Mr. Drukier: That’s called harassment.

Mr. Born: We have not asked anyone to leave the hotel. When we took over the hotel, there were 100 vacant rooms. Now there are 110 vacant rooms. People move out by attrition. The only ones we would ever ask to leave are the ones who don’t pay rent. We haven’t made financial inducements or anything like that. Everything we do is a headache. We did the Maritime Hotel. I remember walking the Maritime with Ian [Schrager] like the week after we closed and he turns to me and says, ‘Are you out of your mind? What are you going to do with this building?’ It was a funky, ugly building. Fifty percent of the building was sunk underground with a single-loaded corridor with oddly shaped walls. Architecturally, it was halfway between a landmark and a pariah. Most of the things that we do are curveballs.

You also took a big risk in signing on to manage the famously eccentric Chelsea Hotel last summer amid some nasty infighting among its owners. Ten months later, ownership turned on you, too, and abruptly terminated the contract. Now you’re in arbitration over money. Was taking that job a mistake?

Mr. Born: Ira and I are owners in every project that we’ve built and managed in the past. That is the single exception. … We had hoped that over time that we’d be able to get some ownership interest.

Mr. Drukier: It was along the lines of no good deed goes unpunished. One of the owners who obtained control of the property called me. She’d never run a hotel before. She said, ‘Can you help us?’ After we talked about it, we said, ‘We’ll figure out a way to do it.’ It wasn’t anything for economic reasons; it was simply because we thought it was a great building and it could be brought to a beautiful level, with the tenants, with the quirky nature of the building, with all of that stuff intact, without stripping it out and turning it into a Holiday Inn or something. That kind of change takes a really delicate hand. The tenants got very upset, but not necessarily with us, with the nature of things. …

They were upset about the upheaval in general.

Mr. Drukier: They liked [former manager] Stanley Bard. I like Stanley Bard, too. I had nothing to do with Stanley Bard staying or going.

Mr. Born: Frankly, I think the operating income of the hotel was up by 150 percent in the first year of our operations, with no capital investment, just tweaking operations. We think we did a great job for the owners. They just had their own way of wanting to do it. There was no fight about us staying or leaving. When they said, ‘We want to do it our way,’ we said, ‘Fine, here are the keys.’ The only dispute is about money.

Can anyone manage that unruly property?

Mr. Drukier: Stanley Bard [laughing].

Mr. Born: The question is, are you going to be able to gain the love of both the tenants and the owners. We thought we were fine with the owners until they said they weren’t happy. A couple of the tenants were really beating down on us. I don’t think for any good reason.

Mr. Drukier: We mopped down the floors and they complained.

Do you have any advice for Andrew Tilley, the gentleman who’s running it now?

Mr. Drukier: Hang on tight to that pole so you can balance on the tight rope.

cshott@observer.com