Location: So, one day, the phone rings. It’s Robert De Niro. He wants to build a hotel. Why did he turn to you?
Mr. Born: I’ve got to believe that he was very methodical and careful because he actually spent years with this piece of property [the eventual Greenwich Hotel]. I think he liked us because we were probably a little more low-key than some of the obvious names. And I think he was comfortable also because, from a financial point of view, he wanted to know he was getting involved with people who were solid and would be up to the task.
This was back in 1999?
Mr. Drukier: I think we met Bob in 1999.
Mr. Born: Obviously, 9/11 was a bit of a speed bump. … This project picked up in about 2004. It was about a two-and-a-half, three-year construction process.
Mr. Drukier: It was longer than we’re used to.
Mr. Born: Very high-end custom work is just a whole other world. We’ve done projects in eight or nine months. We’ve done new construction buildings in less than two years. It’s not like that when you do something like this.
The Greenwich Hotel prides itself on the fact that no two rooms are alike. Do you consider it a masterpiece?
Mr. Born: It’s special because it’s as luxurious in its finish as anything we’ve ever done. When we built the Mercer, the one thing we said at the time is, over time we can justify all the stuff we did here because no one’s going to be crazy enough to spend so much money and put so much time and attention into it. Now we can say the same thing about this place.
Mr. Drukier: Bill Marriott came by yesterday afternoon. He just wandered into the lobby and I happened to be there. So I walked over and introduced myself and I walked him around a little. I told him, ‘You can take pictures of every room because I know nobody’s crazy enough to ever do this again.’ You saw the pool. We got there by trying to come up with a Japanese spa and what can we do to make it feel like that. We thought about this building in Japan we could bring over. We don’t typically bring buildings over from Japan.
Can you set me straight on the standoff with Landmarks over the hotel’s penthouse, which is bigger and bulkier than originally proposed?
Mr. Drukier: [Landmarks] had approved it, but [the Board of Standards and Appeals] made some changes to the approval which increased it a bit. We went back to the community board. They said fine. Then we didn’t for whatever reason go back to the full Landmarks Commission. We went to the Buildings Department and they signed off, so we have a perfectly valid building permit, but when it came time for Landmarks to sign off on the building, they noticed a discrepancy.
Are they going to make you tear it down?
Mr. Drukier: Our deal with them was that they would approve everything else on the rest of the building if we discontinued work on the penthouse until we came to an agreement and we did. … They have a half a dozen ideas that they’re looking at now. We hope some of them they’ll approve. I do think they believe it was a real mistake; it wasn’t something we did consciously. It was dumb, O.K.? It was dumb.
Talk about the state of the industry. Manhattan’s hotel boom has come to a screeching halt. If the industry is truly at a standstill, what do two usually busy hotel financiers do with themselves while awaiting the next upturn?
Mr. Born: Well, we kind of shifted into neutral about a year ago in anticipation of that. We had a very large project in midtown that we mothballed. We actually leased out a couple of sites that we would have otherwise built in anticipation of a slowdown. … It had all the flavor of a market that’s going to shut down. Hotels all of a sudden became the most popular means of developing a piece of property. There were 100 hotels announced, 90 percent were being built by people who had never built a hotel before and half of those were people who had never built a building before. It’s the kind of thing that when your taxi driver starts talking about the stock market, it’s time to sell.
So what now?
Mr. Born: A lot of parking lots [laughing]. One of the things that we are going to be looking for is picking up the pieces of something that didn’t work. We think we’re well positioned to work with lenders. We can build out, we can manage, and we can invest. So I think we’re going to be an attractive group to hook up with on a development that sort of got stalled. There will definitely be those situations around here.
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.
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