Sometimes all it takes is for the economy to nose-dive…
Despite very real fears about its imminent demise, it now looks like the Hotel Pennsylvania will be saved! As the New York Observer’s Chris Shott reports
“Vornado CEO Steven Roth announced during a conference call with investors that he might just hang onto the old hotel after all.
“First off, it is doing damn well as a hotel,” said Mr. Roth, noting the hotel’s increased occupancy, up from 63.7 percent nightly on average in 2003 to 84.4 percent in 2007, as well as increased revenues.
Last year alone, the hotel brought in nearly $38 million—some $10 million more than in 2006, according to the company’s latest annual report. More recent figures point to $5.4 million in pretax earnings during the first three months of 2008—up from $3.6 million over the same period last year.
The numbers, among other financial realities, have clearly swayed Mr. Roth. “We have two basic grand strategies with this grand asset,” he said. “One is, leave it as a hotel, renovate it as a hotel, increase the income coming out of the hotel; and you introduce a very substantial amount of retail in the base of that building—probably three floors’ worth, and connect it into the Manhattan Mall, so we have an extraordinarily interesting asset.”
The “other opportunity,” as Mr. Roth put it, would have Vornado stick to its guns, raze the building and build a huge tower—“if we can land a major tenant,” he added.
It was no secret that Mr. Roth had been wooing financial giant Merrill Lynch to relocate from Lower Manhattan to the hotel site with promises of building a new company headquarters spanning 2 million square feet, complete with a 80,000-square-foot trading floor.
Ultimately, however, the deal fell through. “The credit crisis and Merrill’s management changes disrupted this deal,” according to Vornado documents.”
As Gregory Jones, who spearheaded the campaign to preserve the building said “The economy accomplished it for us,” Mr. Jones said on Monday. “Thank you, George Bush!”
But make sure to read the whole article for Jello Biafra’s articulate and insightful pro-preservation comments such as ““I don’t know why it doesn’t occur to more developers to remodel an historic or an old building rather than just put up some boring new monstrosity. It costs them less money to do it. And you’ve got all kinds of people—even if this got turned into condos!—who want to move into an old, cool, revamped building.”