Number of Hotels Drops Just as It Could Afford To Rise

Two weeks ago, the state Legislature approved a $1.4 billion bill to expand the Jacob K. Javits Convention Center and build an adjacent hotel. The current development proposal calls for an extension of Javits to West 42nd Street from West 39th Street to allow for nearly double its exhibit space, and the building of a 1,500-room hotel. A portion of the legislation will permit a dedicated $1.50-a-key surcharge on New York City hotel rooms.According to NYC & Company, the expanded Javits Center will yield about 415,000 additional hotel room nights a year. Jonathan Tisch, chairman of NYC & Company and Loews Hotels, said that “expanding the Javits Center is the single most important capital project that can be undertaken to support and expand the city’s $23 billion tourism industry.”While the expansion may take three to five years, a number of major events are currently having an effect on the hospitality industry in the city. Over the past 18 months, a number of properties have been sold to be reconfigured into residential condominiums. Two major properties were sold for close to $1,000 a developable foot, including the Plaza Hotel in October for $675 million and, in August, the Mayflower On The Park off Central Park and the adjacent parcel on Broadway for $401 million. Other properties slated for conversion to residential include the 318-room Empire Hotel in Lincoln Center, the 211-room Intercontinental on Central Park South, the Windsor Hotel on West 58th Street off Sixth Avenue, the 349-room Gramercy Park Hotel in Gramercy Park, the 144-room Regent Wall Street at 55 Wall St., the 137-room New York Downtown Athletic Club, and the Hotel Olcott at 27 West 72nd St. Later next year, four floors of the St. Regis will be converted to condominiums.The New York Sun has learned that the Sutton Hotel on East 55th Street between First and Second avenues and at least one or two hotels located off Madison Avenue in the Upper East Side are in the final stages of contract for sale. All of these properties probably will be converted into residential condominiums.Also last month, the 935-room Park Central Hotel, of which a portion serves as The Manhattan Club, one of Manhattan’s few time-sharing hotel facilities, located at 870 Seventh Ave. between West 55th and West 56th streets, was sold.The president of Lodging Investment Advisors, Sean Hennessey, said the 2004 occupancy for New York City will be 81.4% with an average daily rate of $185.80, a 10% increase over 2003. “The hotel occupancy will be the best year since 2000,” he added. In 2005, Mr. Hennessey is projecting an average daily room rate of $204, which is essentially equal to the record-breaking rate of $205 in 2000,the best recorded year in the hospitality industry in New York City.***This last year was a very active one for the hospitality industry. Two new hotels opened this summer in the Lower East Side. In August, the 12-story, 42-room Solita Soho Clarion Hotel opened at 159 Grand St. The Hotel on Rivington (originally planned to be named the Surface Hotel) had a soft opening this July. The 22-story, all-glass structure has a total of 111 rooms and represents the first luxury boutique hotel in the area.In July, the Klimpton Hotel Group completed renovations of the former Doral Park Avenue at 70 Park Ave. at East 38th Street for the grand opening of the 205-room 70 Park Avenue Hotel.One block south of the Museum of Modern Art is the Blakely New York. Formerly know as the Gorham Hotel, the 115-room property reopened in June under new management and after extensive renovation work.In May of 2003, the 120-room Maritime Hotel opened at 363 West 16th St., representing the first luxury hotel in the Chelsea Meatpacking District around Ninth Avenue. In April 2004, the 187-room Hotel Gansevoort opened at 18 Ninth Ave. at the corner of 13th Street. The Sun has learned that this property is far exceeding the occupancy and average room rates, which are well in excess of $400.A few blocks away is the Four Points by Sheraton Manhattan Chelsea, the first Four Points location in Manhattan. This 158-room hotel, located at 160 West 25th St., opened this spring.In 2005, a number of hotels are scheduled to open. In less than 90 days, the 722-room DoubleTree hotel is scheduled to open at the Metropolitan Hotel located at 569 Lexington Ave. The property is under new ownership and management through a partnership of Highgate Holdings and Oxford Lodging. (Last month, Highgate Holdings purchased the Park Central Hotel on 57th Street.) The property is undergoing extensive renovation and will feature a new restaurant and banquet space.The Muss Organization is in the process of breaking ground for the addition to the New York Marriott at the Brooklyn Bridge, at 333 Adams St. The 376-room hotel opened in 1998, and is considered one of the most successful hotels in the Marriott Chain. A 280-room addition will be located adjacent to the original tower and will be linked by an enclosed bridge, which will run from the mezzanine lobby of the Marriott over a plaza to the new building.Later in 2005, the Pomeranc family, the owners 60 Thompson St., plan to open 6 Columbus on West 58th Street, directly across from the Time Warner Center, the Hudson Hotel, and the Mandarin Oriental. Later this year, the Pomeranc Group will begin construction on a new mixed-use hotel on Allen Street in the Lower East Side.***Late next year, construction is scheduled to be completed on the Residence Inn by Marriott at West 39th Street and Avenue of the Americas. The 357-room suite hotel will be part of G. Holdings Corporation’s Bryant Park Tower, a 43-story building that will also include 96 studio and one-bedroom rental apartments.Next month, the Hampton Inn Manhattan-Herald Square, a newly constructed 19-story, 136-room hotel will open at 116 West 31st St. between Sixth and Seventh avenues. In May, the Hampton Inn Manhattan-Seaport Financial District will be completed and ready for occupancy. This 65-room hotel is located at 320 Pearl St. between Peck Slip and Frankfurt Street, directly beside the Brooklyn Bridge. Later next summer, a 220-room Hampton Inn at LaGuardia Airport is scheduled to open. A Holiday Inn Express is also slated to open next summer. A 129-room hotel will be located on West 45th Street between Fifth and Sixth avenues.Later in 2005, Robert DeNiro and partner Ira Drukier plan to open their $43 million, six-story, 83-room hotel at Greenwich and North Moore streets in TriBeCa. The developer secured $38 million in tax-exempt Liberty Bond financing for the project.***Looking to 2006, Andre Balazs will be opening a hotel in the Meatpacking District. In June, he paid $24 million for a property bordered by Washington Street, Little West 12th Street, West 13th Street, and the West Side Highway. Mr. Balazs is also building a small boutique hotel on West 45th Street between Fifth and Sixth avenues.Four Points by Sheraton Soho Village is scheduled to open in 2006. The 150-room hotel will be located at 66 Charlton St. between Varick and Hudson streets. Plans are still underway for the Marriott Courtyard Hotel on 125th Street and Park Avenue.The expansion of the Javits Center, the possible construction of the Jets stadium, the rezoning of the Hudson Yards, the strong economy, the weak dollar, and other factors are helping the city’s tourism industry. I expect more existing hotel properties will be sold for conversion to condominium apartments in 2005. Due to the limited space in Manhattan, one should expect to see a large number of small boutique hotels opening all over the city, and expansion will continue in all sections of the city including Downtown Brooklyn, Queens, Staten Island, and the Bronx.Mr. Stoler is a television broadcaster and vice president at First American Title Insurance Company of New York.

Number of Hotels Drops Just as It Could Afford To Rise

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