Tuesday, March 15, 2016

Hotel Chelsea Luxury Reboot in Limbo

Some news about the famed Chelsea Hotel, which has been closed to the publc for the past three years. Plans to turn the famed former home of Bob Dylan, Patti Smith, Robert Mapplethorpe, Arthur Miller, Sid Vicious and Jack Keruoac into a luxury hotel have unraveled, with majority owners parting ways with partner Ed Scheetz after the project turned into a money pit. What comes next is unclear. It's doubtful it will remain the bohemian residence it once was as Page Six reports that the building could now be turned over to boutique hotelier Richard Born, known for the Bowery, the Maritime, the Mercer, the Greenwich and the Pod. 

Page Six saysScheetz, who owned a piece of the property, is out following a cash squeeze and disagreements with the majority owners — activist investor Bill Ackman, Leucadia National Corp. chairman Joseph Steinberg and real estate investment firm Wheelock Street Capital.
They took over in 2013 and planned to convert the run-down red-brick building into a luxury hotel and condos. Adding to the construction problems, more than 80 tenants in rent-stabilized apartments have refused to move out.

A source tells Page Six, “The place is a mess. They’ve spent a lot of money, but they are still right in the middle of construction. It might still need another $150 million.Then there’s a complex situation with the tenants, who are very litigious. It has become a hornets’ nest. Ackman and Steinberg hired bankers to explore selling it, but it didn’t sell, so they have been talking to other hoteliers.”

They started discussions with Ian Schrager, but were unable to strike a deal. Schrager confirmed to Page Six that he had been in talks over the Hotel Chelsea, but walked away from the project.

Page Six says Born is now in negotiations to take over the management and buy a stake in the Chelsea, telling the gossipers: “We are talking with the owners, but it is premature to say there’s a deal.”

Read the Hotel Chelsea blog HERE.

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