A bright(er) future for the historic hotel? (B*2, flickr)

The residents of the Chelsea Hotel may still return to their mold-infested, dust-filled rooms this evening, but it will be with the glow of victory.

After failing to get the historic hotel's new owner Joseph Chetrit to negotiate an agreement to repair the decaying building's moldering walls, asbestos-filled airshafts and crumbling plaster, the tenants took the sidewalk yesterday in front of their building yesterday, along with a phalanx of politicians, to declare that they were ready to take the matter to a housing court trial.

The Chelsea Hotel Tenants Association, which filed a lawsuit against the Chetrit group to force the group to rectify unsafe conditions in the building last December, finally got its agreement today in housing court, said tenant attorney Janet Ray Kalson.

"It's done!" announced a jubilant Ms. Kalson Monday afternoon. "The main thing was that they needed to be put under order. Now there's a very detailed time for repairs to the building. We're very pleased."

The agreement also includes steps that the Chetrit group—which purchased the building for $80 million in August 2011—must take to protect the building's approximately 100 remaining tenants from hazardous debris, steps like sealing off construction areas and monitoring air quality, as demolition and renovation work to turn rooms in luxury accommodations continues.

The attorney for the Chatrit group, Fred Daniels, did not immediately return a request for comment.

Ongoing construction is likely to be a fact of life at the famed West 23rd Street haunt of artists, musicians and writers. Besides the room-by-room transformation from a shabby bohemian residence to posh suites, the Landmarks Preservation Committee recently approved a rooftop bar/nightclub designed by architect Gene Kaufman. Although the building, which is already too big for its lot, may face an uphill battle to get city approval.

The agreement is very similar to "final" one that tenants and the Chetrit group negotiated last month, Ms. Kalson said, with only a few minor changes. The landlords' decision to renege on that deal at the last moment, insisting on yet more changes, is what prompted residents' to seek alternative avenues to improve their living situation, she said.

But given the many promises of improved conditions that the Chetrit group has broken over its brief time as owner, did Ms. Kalson think a court order would finally do the trick?

"We shall see... to be continued," she said.

City Council speaker Christine Quinn hailed the agreement, calling it "a new day for the residents at Chelsea Hotel, whose call for action has been heard at last," while vowing continued vigilance.

"We’re going to watch this landlord like hawks to make sure the letter of this agreement is followed,” Ms Quinn wrote after the decision was reached.

But yet another important question remains to be answered: Does this mean that the Patti Smith concert will finally happen?

kvelsey@observer.com

The building's famous exterior (melfoody, flickr)

Sunday morning in front of the Chelsea Hotel, a crowd of eccentrically-attired, artistic types milled about the sidewalk while a scrum of reporters and local politicians scrutinized a collection of photographs propped on easels.

A passerby stopped to gawk. "What is this, an art show?" she asked.

And the now infamous interior

It was, in fact, a press conference, at which tenants and politicians announced their shared dissatisfaction with the ongoing disrepair of the building, and their intention to engage in a bruising legal battle if no agreement is reached Monday in housing court.

For an update on today's housing court decision>>

"We are here, unfortunately, to address how far the Chelsea Hotel has fallen. The Chelsea Hotel, once symbolic of all that Chelsea and the West Side had to offer, has fallen into disarray," said City Council speaker Christine Quinn. "Mold covers its walls and  asbestos literally lurks in the airshafts, rust is deteriorating cabinets and sinks and appliances. The landlord has done nothing, less than nothing, to improve these conditions."

The residents of the Chelsea have spent the last six months focusing their energies on the decay and demolition that have taken hold  since Joseph Chetrit purchased the historic edifice for $80 million last August.

The housing court date is the latest stage in a battle that had been raging since last summer, when Mr. Chetrit's gung-ho renovation set loose hazardous debris that had been hidden behind the walls for decades. Asbestos and silica dust particles filled the air. Pipes burst and mold spores colonized the walls and ceilings. Rust dripped from the faucets of the landmarked building, and life suddenly became very unpleasant for the remaining 100 (many of them rent-stabilized) tenants.

Politicians expressed their outrage, vows were made, agreements were hammered out, Patti Smith planned a free concert in the hotel, but was asked not to perform by residents who were worried she was performing at the behest of the new owner. (Ms. Smith, her efforts unofficial and uncompensated, who insisted that her only allegiance was to the Chelsea Hotel and agreed not to perform).

Months passed, the mold and decay continued to spread, eviction actions moved forward against a number of residents, negotiations failed and the tenants had finally decided that either the Chetrit Group would sign the agreement that they had reached earlier or they would demand a trial.

Built in 1896, the red brick building, the former haunt and home of many an artist including Bob Dylan and Dylan Thomas and Patti Smith and Sid Vicious and Leonard Cohen and Charles Bukowski, has often been a little down at the heels (as you might expect of a place known for its lenient, rent-bartering policy. In Just Kids, Ms. Smith wrote about having to let the water run for awhile so that it didn't come out brown). However, according to Ms. Quinn and others, the current state of decay is advanced and not due to benign neglect, but work done quickly, carelessly—and with little consideration for the people living in the building. (Chetrit is said to have classified the building as "unoccupied" when it applied for the building permits).

"This is what happens why an owner puts the rights to make a lot of money over the right of tenants to live peacefully," said assemblyman Dick Gottfried (the roster at the press conference was an impressive one, especially for a Sunday morning, but then, mold is seldom so glamorous).

The Tenants Association filed a lawsuit in December demanding Mr. Chetrit fix unsafe conditions and comply with safety and environmental regulations by removing hazardous materials.  Since then, the tenants have agreed to extension after extension, concession after concession, but the Chetrit Group kept moving the goal posts, said the tenant's attorney Janet Ray Kalson.

The lawyer representing the Chetrit Group did return requests for comment.

Coming on the heels of Landmarks Preservation Committee late-April approval for the construction of a massive rooftop bar/nightclub atop their historic hotel (a move that shocked many, especially since Landmarks had ordered architect Gene Kaufman to resubmit a more realistic proposal earlier that month), the last failed agreement proved to too much for residents.

"The landlords have delayed, obfuscated and stonewalled by refusing to enter into an agreement that would protect tenants' rights at the Chelsea," said Zoe Pappas, president of the tenants association, who took The Observer on a tour of some of the building's more unsavory spaces.

"The personnel has been very forthright in seeming to promise to do things. It's just the fact that they don't," said painter Mary Anne Rose-Gentry, speaking from the window of her 8th-floor apartment crowded with paintings done by her and her late husband Herbert Gentry, old copies of Art in America, a flaking ceiling and crumbling tile and plaster knocked loose by the damp beneath the walls and the force of nearby demolition work.

The apartment looked defeated, the 8th-floor hallway looked defeated, and Ms. Rose-Gentry looked especially defeated. "I can't be a hardy camper anymore," she said. "Can you imagine collectors coming here? People used to love to come to the Chelsea Hotel and get a peek."

On the way out, Ms. Pappas pointed out that the hallway, and the plastic sheeting over the doorways of rooms where work was being done, was actually an improvement, her high-heels clicking past a (thankfully) empty mousetrap.

In the 1st-floor single-room apartment of John Knoernschild, a dapper retired composer and pianist, conditions were even worse. Upon opening the door, a cloud of swampy odor hit The Observer, with mold wafting from the cracked walls and tile. A huge hole  gaped in the ceiling. The bathroom's electricity had cut out, so Mr. Knoernschild had rigged up an extension cord light-bulb of the sort construction workers use.

"You'll see that some of my solutions are pretty primitive," said Mr. Knoernschild with an impish grin.

He seemed happy to play host in his tiny apartment. (As two other tenants talked about the similarly-tiny apartment they shared, he edged gracefully into the conversation. "Excuse me, he said, leaning forward eagerly on his cane, but I must interrupt for a joke. The apartment was so small that they had to get married.") He clearly loves the kitchen-less 250-square feet of space where he's lived for the past 30-years.

"Every time I want to get to something I have to move something else," said Mr. Knoernschild with obvious delight. "They were trying to get me to move for $10,000! You can't find another place for that."

As miserable as it was to live with a huge moldy hole in one's apartment and a bathroom without electricity, Mr. Knoernschild said that he'd certainly enjoyed some aspects of the fight.

"I've been living here for 30 years and I'm suddenly meeting residents I've never met before!," he marveled. "I think it's really brought us together."

And even with a housing court battle looming and the Chelsea rendered nearly unlivable with noxious debris, the residents seemed to take some comfort in the fact that the building was, at least for the time being, still theirs. A bland luxury hotel might be taking shape behind the plastic sheeting, but at the moment, the Chelsea is about as far from luxury as you can get.

"The building has a life of its own. It's been a magnet for artistic and creative people even before it was built. You can't just rip the guts out of this building and turn it into a nightclub for Bridge and Tunnel people," said Brian Bothwell, a filmmaker photographer who lives in an apartment once occupied by both Leonard Cohen and Grace Jones. "You can buy the Chelsea Hotel, but you don't own the Chelsea Hotel, the Chelsea Hotel owns you."

kvelsey@observer.com

The next Boom Boom Room? (Real Deal)

Gene Kaufman, the swankest architect in town, went before the Landmarks Preservation Commission yesterday to try and win support for an addition atop the Hotel Chelsea, which Mr. Kaufman is redecorating for mysterious developer Joseph Chetrit. Tenants, who have lodged numerous complaints about the renovations, are especially concerned about a rooftop addition that they fear will become an all-night party spot. It turns out they have some powerful neighbors who agree.

Every local elected official thinks the rooftop addition is a bad idea, and they submitted testimony to the commission saying so. Signed by Congressman Jerry Nadler, Borough President Scott Stringer, Council Speaker Christine Quinn, State Senator Tom Duane and Assemblyman Richard Gottfried, the letter (attached in full below) condemns the addition as a bacchanalia waiting to happen.

While we realize the effects of the proposed rooftop addition might have on existing tenants is not entirely within LPC’s purview, the tenants will nevertheless lose the use of the rooftop space and have a wall covering the windows of some apartments. This will result in a tremendous loss of light and air to the existing occupied rooftop apartments. If the proposed rooftop addition becomes an eating or drinking establishment, which seems likely, the noise levels will also have a negative impact on the existing tenants as well as residents in the adjacent buildings.

They don't find the structure very attractive, either.

The proposed materials of stucco, aluminum, and glass are not contextual with the original façade, the rooftop’s brick masonry, and the slate cladding, all of which will be obstructed or obliterated by this addition. Moreover, the roof’s historic William A. Underhill brick pavers, which are embedded with bronze plaques, would be trampled by this addition. This incongruous structure is an affront to the building’s overall appearance and will be visible from West 24th Street and the east side of Seventh Avenue. There is a clear case that this modification would detract from the historic character and qualities of the building which make it such a prominent landmark.

An affront! Well, lucky for them, the commissioners agreed, according to Curbed. While they found some elements of the renovations to be appropriate and tasteful, even, the cabana up top gave them particular pause. The project has been sent away for more exploration, and likely alterations. It will be curious to see if anything al fresco is approved.

mchaban [at] observer.com | @MC_NYC

Chelsea Hotel Group Testimony Final

A rendering of the renovated hotel, with new windows and a penthouse. (Real Deal)

The mysterious Mr. Chetrit. (DNAinfo)

As readers of The Observer know, Joseph Chetrit might be the most secretive big-time developer in a city full of the type. The guy owns part of the Willis Tower, for God's sake, and still nobody really know who he is.  Oh, and as of not to long ago, the Chelsea Hotel, which he is thoroughly mucking about in. Well, his minions are, since Mr. Chetrit has never publicly been seen at the hotel.

But he did make an unexpected appearance at a local community board meeting last night, to defend ongoing renovations, including a penthouse he hopes to add to the landmarked hostel. According to DNAinfo, Mr. Chetrit said little during the three hour meeting, though he eventually broke in near the middle to make his case for the project.

He says the move wouldn't harm the historic structure — or the dozens of angry hotel residents also at the meeting. "Nobody's looking to hide anything," Chetrit said.  "We're working full time, very hard, to give you the best product."

mchaban [at] observer.com | @MC_NYC

I'll crash whenever I want.

After releasing a statement on Wednesday outlining why she was still going to perform for the tenants at the Chelsea Hotel—despite their wishes—Patti Smith changed her mind and pulled out of the performance shortly before she was due onstage last night.

However, even though she bowed to the pressure and cancelled her Thursday performance for the tenants railing against her, The Architect's Newspaper reports how she still did performed at the hotel this week to a crowd of media and art folks, a private performance for the hotelier on Wednesday. It seems the revered Ms. Smith has suffered from a serious bout of flip-flopping on the issue, which now appears to have been grossly ill judged, leaving her contradicting herself.

Her statement on Wednesday read:

"My allegiance is to the Hotel itself, and I have done nothing to tarnish it."

Last nights cancellation statement read:

"My motivation was solely to serve the tenants."

"If you want to give a concert for us great,  but chose a neutral venue, one where Chetrit will not be sponsoring you." Wrote 16-year Chelsea Hotel tenant and editor of the Living with Legends blog, Ed Hamilton, before the gig got cancelled.

Ms. Smith originally said she wanted to perform in order to "communicate directly" with the tenants. Now, everyone loves a good musical, but it seems she could have saved herself a whole lot of time communicating through the old fashioned way, or as we like to call it: talking.

This whole episode is a music pun dream (note how we've smartly avoided 'people have the power'... well until just now). It seems Neil Young was onto something when he said, "music can't save the world." Heck, it can't even save someone from eviction.

sduffy@observer.com

Charming! (DNAinfo)

As if living inside of a construction site were not bad enough, your home denuded of its famous art and filled with hundred-year-old dust, it appears the renovations to the Chelsea Hotel could be making those still living there sick—at least that is what the boarders are arguing to DNAinfo, and they have hired an outside health probe to make their case.

Tenants are concerned that the building, constructed in 1884, is so old that dangerous building materials could inadvertently be released by workers during renovations. The final results from the environment assessment should be available within the next few days, Himmelstein said.

"I cannot make speculations, but I know when I breathe the air, I don’t feel comfortable," said Zoe Pappas, an engineer and artist who lives in the hotel. "We could see the dust, we could see the debris coming through the elevator and through the lobbies."

This may just be the tenants waging their latest war against the difficult and mysterious Joseph Chetrit, but when you see the video of the renovations, they're sort of hard to argue with:

mchaban [at] observer.com | @MC_NYC

Joseph Chetrit is the mysterious buyer taking over the famous flophouse, The Journal reports today, beating out more talked about suitors like Andre Balazs, Ian Schrager and David Edelstein. It appears he has no intention of creating condos, unlike some of his rivals.

It has almost become a cliche to rundown the artists who have called the redbrick edifice home--Dylan Thomas, Bob Dylan, Courtney Love, Arthur C. Clark while writing 2001--but it bears mentioning because it looks like the Chelsea will continue this tradition, at least until the residents in the building's 100 apartments are gone.

Mr. Chetrit has experience in dealing with concerns of tenants in buildings he's acquired and upgraded. In a similar deal, his Chetrit Group in 2004 acquired the Empire Hotel, next to Lincoln Center, which housed a number of long-term residents.

Despite media reports that he planned to convert the building into condos-a popular trend at the time-he renovated the property and has maintained it as a hotel. He also moved a small number of existing tenants into renovated rooms at the Empire where they could live rent-free.

Rent-free! There are only two words that could make a New York artist happier: "Whitney retrospective."

mchaban [at] observer.com | @mc_nyo

Both Andre Balazs and Ian Schrager are said to be interested in the Chelsea, and now Page Six is reporting that "several bids are in but no deal has been struck." Could this be the beginning of a bidding war for the heralded hotel asking $100 million?

A big sale is certainly possible, especially with record numbers of tourists in New York and the legacy at the Chelsea, but there are two problems facing any expensive take over--the tenants (as always) and the renovations. Page Six got the word from inside the red-brick behemoth:

"Management has already been whittling down the tenants," a source said. "They would go in there and get building permits to renovate the rooms and then make them hotel rooms. They aren't giving out long-term leases."

One source predicted that the only way to avoid a lawsuit by tenants is to offer them cash. "It's a complicated deal," said the insider. "The building needs so much work. It's going to cost a fortune to overhaul."

A tenant buyout, eh? That shouldn't be too hard.

mchaban [at] observer.com | @mc_nyo

Just a few blocks north of his blockbuster Standard Hotel, the Chelsea sits astride 23rd Street. As The Observer reported after the building was put on the block in the fall, "hoteliers Ian Schrager and André Balazs, as well as the real estate scion Scott Resnick" were interested in the building. Schrager is reportedly out, but now some Page Six spies have spotted Balazs checking out the Chelsea.

Now that it's up for sale again, some say Balazs has plans to give it the same magic touch he gave the Chateau Marmont when he transformed the Hollywood rock haven into a posh hangout for celebrities and LA elite. His rep said, "Pure speculation. We have no comment."

With the Mercer and the Standard full-up, Balazs might need another project to tackle. If only he could figure out how to deal with those persnickety tenants.

mchaban [at] observer.com | @mc_nyo

Near the couple's feet, three plastic tombstones and some fake bones were arranged beneath a black-and-white photograph of Andy Warhol operating a camera, part of the lobby's permanent collection. "Happy Halloween" was written in fake blood on a strip of marble running across the opposite wall. Next to the bench was a knee-high cylindrical metal trash can with a retired ashtray on top. A small pack of German tourists filed past with rolling suitcases to check in at the desk.

The couple was on vacation in New York City, and the Chelsea was their last stop. Ten days earlier, the hotel's owners--a group of 16 shareholders led by the descendants of three Hungarian men who purchased it in 1946--announced that, after years of bad publicity, abortive management changes and dozens of lawsuits (including some against each other), the icon was for sale. 

The man wore a black leather jacket covered in zippers and two oversize metal rings. His hairline receded into long sideburns. "It doesn't exist anymore. They made it into a suite or something," the man told the woman. He was talking about Room 100, now part of Room 103, where the Sex Pistols bassist Sid Vicious allegedly stabbed his girlfriend, Nancy Spungen, to death in October of 1978. "I loved her, but she treated me like shit," he told police when he was arrested. He killed himself with three injections of prime heroin later that year. "Please bury me next to my baby in my leather jacket, jeans and motorcycle boots," he wrote in a suicide note that was found in his pocket. "Goodbye."

The woman in the Chelsea lobby pulled her straight, jet-black hair into a bundle over her left shoulder. Her face was white with powder. "This has been a bad-luck trip," she said.

The man leaned his head back against the wall.

THE CHELSEA SITS fortresslike on 23rd Street, between Seventh and Eighth avenues. When the 12-story building opened in 1883, as a 44-room co-op apartment house, it was the tallest in New York. The Chelsea isn't named after the neighborhood; the neighborhood is named after the Chelsea.

In 1905, it began accepting transient hotel guests, and over the next century, the original rooms were split into 101 apartments--a mix of single-room occupancies and one-, two- and three-bedrooms--and 125 hotel units. Patti Smith, who moved into the hotel with Robert Mapplethorpe in 1969, described the Chelsea as "a doll's house in The Twilight Zone" in her recent memoir Just Kids.

VIEW SLIDESHOW >THE SECRET HISTORY OF THE CHELSEA HOTEL

When other 19th-century hotels like the original Waldorf and the Astoria were being knocked down in the late 1920s, the red-brick Chelsea remained. "It was a boutique hotel before they thought up the name," said Tom McConnell, a broker at the commercial real estate firm Cushman & Wakefield who brokered the sale of the Algonquin in 2005.

The Chelsea's hulking physicality--its L-shaped sign, which can be seen blocks away hanging over 23rd Street; its facade, speckled with terraces--sets the building apart from nearby neighbors like Burritoville, 99¢ Creation and Pet Central. But it's the litany of cultural touchstones in (or formerly in) residence that makes it the Chelsea.

It's where Mark Twain stayed. And Jack Kerouac. And: Thomas Wolfe, Frida Kahlo, O. Henry, Arthur C. Clarke, Willem de Kooning, Henri Cartier Bresson, Allen Ginsberg and Martha Graham. It's where couples from Arthur Miller and Marilyn Monroe to Leonard Cohen and Janis Joplin made love. It's where Dylan Thomas collapsed into a coma in 1953--"I've had 18 straight whiskies. I think that is a record!"--which led to his death four days later in St. Vincent's Hospital.

Upon arriving in New York City in 1964, Christo and Jeanne-Claude stayed in the Chelsea and borrowed money from the front desk to eat. The hotel became known for allowing tenants to pay rent with original works of art, some of which still hang in the lobby. The idea of the Chelsea as a place where beautiful young people took "downies," smoked cigarettes and groomed their bangs crystallized in Andy Warhol's 1966 film The Chelsea Girls. In the year before the movie was released, Bob Dylan, who had written much of Blonde on Blonde while living in a third-floor room, moved out of the building. "When Chelsea Girls came out, it was all over for the Chelsea Hotel," Mr. Dylan said in a 1985 interview. "You might as well have burned it down. The notoriety it had gotten from that movie pretty much destroyed it."

Nostalgic tenants have continued to worry about the Chelsea's legacy. In 2007, after a legal spat, two of the three principal owners, David Elder and Marlene Krauss, concerned over the hotel's management and revenue, wrested control from the third, Stanley Bard, who had run the hotel for nearly 50 years. Mr. Bard embodied the art-as-rent ethos, and his ouster signaled a changing tide. The Chelsea would be run more like a by-the-book business and less like a community of Others living in an antique hotel in the middle of the city.

Mr. Elder moved into a space on the first floor, and someone, in his or her loyalty to Mr. Bard, welcomed him by leaving excrement at his doorstep. The NYPD bomb squad later came to the hotel to inspect a suspicious package sent to him: It turned out to be a fish head in a box. Another resident put on a yellow bathrobe and made a mask from a photo of Mr. Elder's face and stalked through the hotel with a sign that read "TO PREVENT CONFUSION PLEASE BE ADVISED STANLEY BARD IS NO LONGER THE MANAGING AGENT OF THE CHELSEA HOTEL." It was a replica of a sign Mr. Elder installed behind the front desk after Mr. Bard continued to come to work after he was removed as manager. One tenant, Ed Hamilton, posted a photo of the costume on "Living With Legends," a blog he keeps to catalog life in the hotel, including the supposed atrocities of management.

"David is there to watch that things are being done properly," Marlene Krauss, a physician, told The Observer in 2007. "Frankly, it's time that somebody watched what Stanley is doing."

"I want to pass it on to my kids," she added. "I'm embarrassed to pass it on to them now."

Dr. Krauss and Mr. Elder hired Richard Born and Ira Drukier's boutique hotel management company BD Hotels to replace Mr. Bard and his son, David. They also entrusted BD Hotels to plan renovations for the hotel. "It's not the intent to turn this into a boutique-y hotel," Mr. Drukier told The New York Times in 2007. At the time, his company also managed the Mercer, a big-time celeb hangout downtown, and 5,000 other hotel rooms in the city. "Its character is what we need to maintain." (The relationship between Messrs. Born and Drukier and the owners collapsed into legal wrangling over fees--further management shifts ensued.)

Although there is really no previous transaction to measure the sale of the Chelsea against, the owners are hoping the Queen Anne-style building, whose history and lore shriek like marketing banshees, will fetch at least $100 million, according to several sources.

Doug Harmon, a top broker at the firm Eastdil Secured, is representing the owners. Mr. Harmon repped the families that sold the Apthorp on the Upper West Side in 2006 to Maurice Mann and Lev Leviev for $425 million, then a record for a U.S. apartment building. Mr. Harmon is also handling the potential sale of 111 Eighth Avenue to Google, which has its New York headquarters there, for $2 billion in what could be one of the most expensive property sales ever in New York. Mr. Harmon declined to comment.

Finding a buyer for the Chelsea, especially at $100 million, is a giant problem. According to one source inside the building, hoteliers Ian Schrager and André Balazs, as well as the real estate scion Scott Resnick, the sort of buyer who might favor a residential repositioning of the building, have said they are not interested in the property. They all declined to comment.

The timing of the sale and the Manhattan hotel market are not the problem. The market is ripe. Hotel revenue per available room is up 15 percent in 2010 over 2009, and nightly occupancy rates have climbed back above 90 percent this year. There were more than 2,000 hotel rooms under construction or planned in Chelsea in the summer of 2007, and, in spite of the economy, no fewer than 10 new hotels have opened in the neighborhood since the beginning of 2009.

The Chelsea has a leg up on pretty much every other hotel because of its history and its architecture. It also has a great location on 23rd Street, a wide boulevard--albeit one with three Duane Reades in as many blocks. The hotel's value has likely increased with the addition of the High Line down the street, and should continue to grow in 2015 with the arrival of the Whitney a short walk away.

One source intimately familiar with the Chelsea and the local hotel market suggested the building could have gone for twice or three times as much as $100 million three years ago. The source also said that a new owner would probably spend between $50 million and $75 million (between $400,000 and $600,000 per hotel room) renovating the property.

A broker who toured the property recently, but who declined to represent the buyers because of the complexity of the owners' personalities, estimated that the renovation would cost between $100,000 and $150,000 per room. Another broker who toured it and who also declined the listing said $100 million was "a stretch." Eastdil Secured's listing underscores the size of the existing hotel rooms, which a new owner could subdivide to create more revenue-generating units.

"The limiting factor is how much is it going to cost to renovate. If it's $20,000 or $30,000 a room, that's one thing, but if it's $200,000 per room, that's another thing," said Mr. McConnell of Cushman & Wakefield. "It starts getting a little dis-economic at that location."

There is also the headache of renovating a landmarked building, not to mention one whose central design feature--an open central stair--is now illegal in New York City (fire doors have been installed). And then there are the litigious tenants, who will have to be won over--or kicked out.

"To me, the Chelsea without the tenants isn't really the Chelsea," Mr. McConnell said. "I mean, if there's one hotel in New York that you have to sprinkle a grain of salt on when it comes to tenants, it would be that one."

OUTSIDE THE CHELSEA on Friday afternoon, a waiter from El Quijote swept yellow leaves off the restaurant's plastic grass entry mat. The Spanish eatery signed a 40-year sweetheart lease with the Chelsea under Mr. Bard. There is also a tattoo parlor, a guitar shop, and Chelsea Moving and Storage leasing retail space on the ground floor. Two storefronts sit empty behind metal roll-down gates painted brown. (Inside the hotel, there's a hair salon in a third-floor room and, according to one tenant, an abortion clinic.)

Last week, renovations were under way inside a storefront to the east of the hotel's entrance, next to the two empty ones. "It's going to be a boutique doughnut shop," a young foreman told The Observer.

What makes a doughnut shop boutique?

"Better doughnuts," he said. "Better coffee."

It will be the second location of the Doughnut Plant, which has a store on the Lower East Side and also sells at Dean & Deluca.

Down a set of black stairs to the right of the hotel's entrance is a club that opened in the middle of October, the Chelsea Room. "This is all the original brickwork from when the building was built in the 1800s," said Marcus Bifaro, the club's general manager, moving his finger in an arc across the lounge's walls and vaulted ceiling, which were sandblasted for two weeks to remove layers of accumulated paint. He wore black-on-black Nike high tops, blue jeans and suspenders over a pinstriped shirt. His sleeves were rolled up to his elbows to reveal tattooed forearms.

He pointed to a drink rail that was built from a wall removed from the center of the room to open the space. "It's still the original brickwork," he said. "It's just been deconstructed, taken out brick by brick and placed somewhere else." Steel beams were installed to buttress the remaining original walls.

"The Chelsea Hotel, it's an artistic place, obviously," said Mr. Bifaro, whose last job was managing the Surf Lodge in Montauk. "To tie myself to the Chelsea Hotel, I feel like we also ourselves have to be kind of artistic, not only in our design but putting up some pieces of art. That's my next step."

The Chelsea Room hopes to attract the type of clients who will pay for bottle service or, at the very least, $13 cocktails. Mr. Bifaro has made sure to stay on good terms with the hotel and the residents, who were largely unhappy with the Star Lounge, which closed in the same space earlier this year.

"The meatpacking is staying in the meatpacking," he said. "We are trying to do something different than everyone else."

He beamed when asked if he was excited to be managing a club at the bottom of the Chelsea. But what of the sale? "There's a million Trump Plazas, there's a million boutique hotels out there somewhere, and I definitely don't think that's what they should do. I think they should leave it for what it is."

On Saturday night, Mr. Bifaro, like many of his guests, dressed in costume. "I was going for Gangs of New York, but I ended up as this disco cowboy thing," Mr. Bifaro told The Observer, popping a puffy cap onto his head. He wore a fake mustache and a vest with a pocket watch over his rolled shirtsleeves.

The club had a drink special for $10: vodka, Chambord raspberry liqueur, lime juice and cranberry juice, on the rocks and garnished with a slice of blood orange.

Behold the "Sid and Nancy."

zturner@observer.com / @zekeft

VIEW SLIDESHOW >THE SECRET HISTORY OF THE CHELSEA HOTEL