For over five decades, since the 70s, Ian Schrager has been behind some of the world’s most renowned and well-designed places to sleep, drink, and dance, dating back to the iconic Studio 54, which launched a new era of sophisticated hedonism, mixing celebrity glitz with the outlandish underground. He then pioneered the concept of the boutique hotel, turning travel into an art form, and has gone on to open countless hotels and residences. In the process, he has democratised luxury and made the exclusive inclusive, revolutionising the entertainment, hospitality, food and beverage, retail and residential industries.
Graduating college in the 1960s, Steve Rubell served a stint in the National Guard in an intelligence unit before attempting to launch a Wall Street career, which he quickly realised did not appeal to him. Instead he borrowed money from his father and friends to become a restaurateur, opening the Steak Loft in Rockville Centre, Long Island, in the early 1970s. Success came rapidly, so that by 1974 he opened a dozen more Steak Lofts in New York, Connecticut, and Florida. He also owned stakes in a pair of Queens’ discotheques.
It was at this point that he turned to Ian Schrager, who had become a real estate lawyer, to help him run his enterprise and provide the kind of organisational skills he lacked. Together they opened a successful disco, only to have it shut down when disgruntled neighbours sued them.
They now turned their attention to Manhattan and looked for a locale where late-noise was more acceptable. They found it in a former CBS television studio on West 54th Street. As they would later do with their hotels, Rubell and Schrager bucked conventional wisdom, hiring sound and lighting engineers who had no disco experience. Their new club, Studio 54, opened on 26 April 1977.
In the 1970s, Studio 54 was the epicentre of New York nightlife. With wildly theatrical sets, a guest list of celebs, and jet-setters that included everyone from Michael Jackson, Mick Jagger, David Bowie, Debbie Harry, Grace Jones and Andy Warhol, to name a handful. Others who wanted to join the party had to pass muster at the velvet-roped entrance where often five-foot-five Steve, flanked by beefy body guards, decided on who was worthy to enter, intent on selecting the right mix of people for the raucous party inside.
This casting approach would also be duplicated later when Steve and Ian hired hotel staff. Steve Rubell once turned away the King of Cyprus, according to Steve, because “he looked like somebody from Queens.”
Studio 54 drenched New York nightlife in kerosene and set it ablaze, running for a discocharged 1.000 nights from 1977 to 1979, before detonating with a birthday party for Bianca Jagger (she rode in on a white stallion, naturally) and imploding with a police bust.
The club all started when the Brooklyn-born friends Ian Schrager and Steve Rubell discovered an opera house and TV studio in Midtown, renovated it, and opened its doors as Studio 54. It was the revolutionary crux for nightlife, after hours, club culture and celebrated sexual liberation post-Vietnam War.
Opening night was a mob scene (“We were actually scared,” Ian Schrager said, “we had to bring all the security inside out onto the street”), and then it was a matter of constantly scrambling to feed the beast of success. But between the extroverted Steve Rubell’s cultivation of celebrities and the studious Ian Schrager’s sense of style and theatricality, they set out to create the perfect party every night.
“It was the most magical club that ever existed,” Nile Rodgers of Chic, disco’s greatest band, said in a telephone interview. “Lots of clubs evoke a certain era — the Cotton Club, the Moulin Rouge, the Copacabana — but none of those did what Studio 54 did, where if you got in, you were a star, not just a person.”
First, of course, you had to get in, and the crowd that showed up nightly led to Studio 54’s infamous velvet rope and a highly selective door policy. Andy Warhol, a regular at the club, once said that “Studio 54 is a dictatorship at the door and a democracy on the dance floor.” Journalist Anthony Haden-Guest, author of “The Last Party: Studio 54, Disco, and the Culture of the Night,” describes the expectant, desperate faces of the hordes gathered outside the front door as resembling “the damned looking into paradise.”
That kind of power gave the Studio 54 team a sense of invincibility, an arrogance that antagonised those who didn’t make the inner circle. “After a while, everybody had it in for them,” Nile Rodgers said, “simply because they wouldn’t let everybody in.”
For some, Studio 54 was a phenomenon that could never again exist. Writer Mick Joest described it as “one of those unique places that came around at the right place and right time, and nothing like it will ever happen again.”
But for Ian Schrager, who cofounded Studio 54 with Steve Rubell, that’s not necessarily the case. “I’m not one of those that think that a place like Studio 54 couldn’t be recreated today, even though it’s 40 years later and it’s in a different time,” Schrager told Business Insider.
The club and Steve and Ian’s rise to the top of the Manhattan social ladder are documented in Matt Tyrnauer’s acclaimed documentary, “Studio 54.” Steve Rubell died of complications from AIDS in 1989, but the film boasts in-depth interviews with Ian, who has been hesitant in the past to publicly reflect on that heady time.
At one point in the new documentary “Studio 54,” Michael Jackson wanders into a television interview that the club’s co-owner Steve Rubell is doing. Asked what it is that he likes about Studio 54, a shockingly relaxed and smiling Jackson says, “I like the atmosphere — the feeling, the excitement. “It’s where you come when you want to escape. When you dance here, you’re just free.”
Studio 54 didn’t have a building permit when they started construction, which was completed in six weeks. Studio 54 had no liquor license when it opened — every day, they would get a temporary catering permit, a stopgap that continued for more than a year, and ultimately set their downfall in motion.
When Steve Rubell boasted to New York magazine that “only the mafia does better” than Studio 54, the Internal Revenue Service took the bait, raiding the club on 14 December 1978. Above some ceiling panels in the basement they found garbage bags containing USD 600.000 and a second set of account books. There was also the matter of five ounces of cocaine.
“There was a real backlash against Studio 54, a groundswell of resentment,” Ian Schrager said. “We were the poster boy for all that was wrong in the economy, in city life — we got so many people aggravated at us, there was a need to bring it down, a lot of bad karma at the end.”
Steve Rubell and Ian Schrager were fined USD 20.000, and sentenced to three and a half years. In addition, they were saddled with back taxes of about USD 750.000 and lawyer bills in the USD 1 million range. But their time was cut in half after they gave information about the finances of other discos. (Ian Schrager was eventually granted a pardon from President Barack Obama in 2017.)
In February 1980 Steve Rubell and Ian Schrager were incarcerated and began cooperating with the authorities in their investigation of other city club owners. As a result, their prison terms were reduced to 20 months and they were moved from a New York City facility to a minimum security prison in Alabama for the final six months of their sentence. Here Steve Rubell used his winning personality to become like “the mayor of jail,” as Ian Schrager described it. Together they also began to plot their business comeback when released. Instead of nightclubs they decided to direct their attention to hotels, determined to return glamour to a tired industry, to in essence reinvent hotels as theatre.
While still in prison, in January 1981, Steve and Ian sold the lease to Studio 54 to hotel and restaurateur Mark Fleischman, who took over a club that was past its glory and would close two years later. The building that housed Studio 54 was sold to real estate developer Philip Pilevsky. As a result, the partners were able to pay off their bills and were not destitute when they were released from prison later in the year.
They flew back to New York and immediately paid a visit to the hot new hotels in town, the Helmsley Palace and Grand Hyatt. To enter the hotel business they needed funds, and while they turned down offers of help from friends, they were rejected by banks and other investors, who might have backed Steve Rubell and Ian Schrager if they had wanted to open a new club, which would have undoubtedly benefited from tremendous press build up and attracted a celebrity clientele. But they were more than reluctant to invest in their concept of a hotel.
The Palladium was a cinema, concert hall and later a nightclub. Originally designed by Thomas W. Lamb and originally called the Academy of Music, it was built in 1927 across the street from the site of an earlier venue of the same name. Opened as a deluxe movie palace by movie mogul William Fox, the Academy operated as a movie theatre and concert hall through the early 1970s.
In 1985, Steve Rubell and Ian Schrager converted Palladium into a nightclub. Avant-garde Japanese architect Arata Isozaki redesigned the building’s interior for the club. When Steve and Ian took over a new important chapter started for the Palladium as the heart of the New York art and music scene.
A dizzying cross-cultural concept, described by New York Times architecture critic Paul Goldberger as “one of the most remarkable pieces of interior architecture in New York”, the club was approached via a Palladian staircase fronted in the glass blocks that line New York City sidewalks leading to a brightly illuminated arch decorated with Francesco Clemente frescoes.
Ian Schrager harnessed the power of technology with multimedia and video installations designed by award-winning visual-effects whiz Bran Ferren, who had worked on the movie Altered States, and commissioned artist-du-jour Keith Haring to create the vast backdrop which was Palladium’s most enduring visual signature.
Ian is proud of pioneering the concept of bringing art out of the gallery to the people in their pleasure palaces, if a tad dismissive of the artists themselves: “Works by Haring and Basquiat were not essential to the look of Palladium; it was more the idea of using art, democratising it by showing it as something you didn’t need to visit a museum to experience.”
The Palladium opening marked the evolution of the New York downtown art scene from a series of distinct subcultures to a full-blown, mainstream aesthetic with a distinctive identity. Predecessors like Area, which hosted a new themed exhibition every month, had already established the nightclub as an exhilarating nexus of art, music, fashion, performance and celebrity, but the Palladium integrated these groups as never before, adding Studio 54’s A-list cast of stars and socialites and introducing the Michael Todd Room, an upstairs lounge for VIP after-parties and events that became a focal point of New York nightlife.
The first exhibition that opened at Palladium featured works by more than 70 artists including Milton Avery, Lynda Benglis, Christo, Jim Dine, Eric Fischl, Vincent Gallo, Nancy Graves, Philip Guston, Michael Heizer, David Hockney, Jasper Johns, Robert Kushner, Alice Neel, Judy Rifka, Lucas Samaras, Saul Steinberg, Cy Twombly, Andy Warhol, and Tom Wesselmann. This motley assortment would be characteristic of the Palladium, where central figures in the artworld collaborated and socialised with more outré artists, performers and personalities.
At Studio 54 Steve Rubell and Ian Schrager had pioneered the use of large-scale mailed invitations and at the Palladium they built their mailing list to 180.000 names with 100 categories of guests. A staff of 5 managed the names and crafted the list for the most exclusive class of invitation to any Palladium event: the Michael Todd Room/backstage comp ticket.
The club’s investment in the mailings was extraordinary, costing as much as USD 40.000 a week in 1986, and the examples here include unusual forms and objects such as a fold-out prayer card invitation to Howie Montaug’s No Entiendes, a watershed evening of intentional amateurism, and an bloody knife invitation “environment” to a Halloween party designed by well-known theatrical and rock set designer Mark Ravitz.
The Palladium closed in 1997 and was later demolished. New York University purchased the land and built a 12-storey residence hall retaining the name Palladium. The residence hall typically houses 975 undergraduate and 170 MBA students. Two floors in the basement and sub-basement are dedicated to the Palladium Athletic Facility, also known to the University community by its abbreviation, “PLD”.
Morgans Hotel Group
After the chaotic end of Studio 54 and spending 1.5 years in prison, Steve Rubell and Ian Schrager soon turned their attention to the hotel business and eventually spawned the “boutique hotel” genre.
The Morgans’ 1927 building, designed by architect Andrew J. Thomas, began life as the Hotel Duane before the Steve Rubell and Ian Schrager took it over. French designer Andree Putmen was put in charge of the renovation. The lobby was eliminated, the marquee removed, and the bed legs cut off to make the small rooms look larger than they were. Steve Rubell did the hiring — in effect, casting (he even thought about hiring a Hollywood director) — preferring people with glamorous looks and no prior experience in the hotel business. Morgans opened to no announcement on 1 October 1985.
With no marquee the new hotel could have easily been mistaken for an apartment building. But among the Morgans’ first guests were Bianca Jagger and Cher, the news was fed to the gossip columns, and in short order the 113-room Morgans, which charged USD 200 a night, had a 91% occupancy rate, the highest in the city.
“I would say Morgans was the first true boutique hotel. The name ‘boutique’ came about when Ian Schrager was trying to describe the concept to others in the fashion industry, in the travel industry, in the hotel industry, and to investors. He said, ‘Well, there are major department stores and then there are boutiques. We are going to be more like the boutiques.’ That’s actually how the name boutique came about. It was when Ian Schrager was kind of grasping for a way to explain the concept,” Bjorn Hanson told Skift in 2017.
“It really was the first boutique hotel,” he told Dezeen. “There was nothing before it. And we lost ownership of that [phrase]. It became part of the English language.”
Once again Steve Rubell and Ian Schrager were in the limelight, having reinvented themselves as cutting-edge hoteliers. They took their hotel-as-theatre concept a step further in 1988 when they opened their second property, the 205-room Royalton, located across the street from the famous Algonquin on 44th Street.
The Royalton in New York was Ian Schrager’s first project with Philippe Starck and is designed completely differently from the Morgans to avoid “cannibalising” its business. According to the Wall Street Journal in a 1989 article, “The help is gorgeous, the décor stainless-steel surreal. No comfy overstuffed chairs there; everything is very sharp-edged. Visitors to the Royalton’s public mens’ room encounter no ordinary urinals; there is, however, a waterfall activated by electric eye. To reach their rooms, guests first navigate dark corridors because as the Royalton’s designer Philippe Starck puts it, ‘before the opera starts, the place is dark.’”
With two successful properties in the stable of their hotel management company, which they called the Morgans Hotel Group — as well as other real estate investments and the creation of the Palladium, the club of the year in Manhattan in 1985.
Steve Rubell and Ian Schrager next turned their attention to Times Square, a once glamorous neighbourhood gone to seed but about to enjoy a rebirth. They bought the massive 610-room Century Paramount hotel, that like the area had seen better days, now reduced to offering rooms in the heart of Manhattan at less than USD 50 a night on average.
The idea for the Paramount was to offer a less expensive hotel experience for a market that had similar tastes as the people who stayed at the Morgans and the Royalton but whose pockets were not as deep. Room rates were capped at USD 100 per night.
“It was a different kind of thing. The room sizes of this hotel were very, very tiny, but Ian and Philippe were so creative in how they designed the rooms, that it really just worked. I think it was a great alternative; first of all boutique hotels very often were much smaller but it was really more about the environment. Let’s say you’d never been to New York before. You were going to the Paramount hotel and you’d see, even though your room was small, you didn’t really care because you had this incredible downstairs and you had a great restaurant and that’s what you were going to the hotel for,” said Scott Gerber, CEO of Gerber Group.
Steve Rubell would not see this third property open, however. In July 1989, at the age of 45, Steve died from septic shock and hepatitis, presumed now to be the results of AIDS, although not acknowledged at the time. His gravestone was inscribed, “The Quintessential New Yorker.”
“When Steve Rubell and I opened Morgans in 1984, we were simply trying to do a hotel that we liked, to fill a void, to fulfil our wishes, not those of our parents, one that was about my generation and reflected my social values and culture. It was a very personal statement. We didn’t even know what we didn’t know. We had no idea what it would be, what impact it would have or whether it would even be successful. We were just trying to rethink things because there hadn’t been a new idea in the hotel industry since Statler invented the modern American hotel in the early 20th century. It is, however, very rewarding at this point to realise that there are thousands of versions of what Steve and I started in virtually every major city of the world,” Ian Schrager told A Hotel Life.
The more reserved Ian was now left on his own to run Morgans Hotel Group. He was able to open the Paramount in October 1990, and like the Morgans and Royalton it was an immediate hit. With these properties, Ian Schrager introduced “lobby socialising,” whereby the hotel lobby became a new kind of gathering place for hotel guests and New York City residents alike, and “cheap chic,” where affordable luxury was offered in a stylish and sophisticated environment
But beneath the glittery surface all was not well with the company, which had taken on too much debt in its rise to prominence and was unable to generate sufficient cash flow as a recession adversely impacted the hotel industry. The Morgans hotel filed for bankruptcy in 1991, followed by the Royalton in 1994.
Ian managed to hold onto his properties, however, and soon returned to expansion mode. For several years he had his eye on the Miami market, and in 1993 Morgans Hotel Group bought the 328-room Delano hotel in Miami Beach.
Designed by architect Robert Swartburg, the Delano was built in 1947 by Rob and Rose Schwartz for military housing. The then four-winged Art Deco tower of the Delano was the tallest building in Miami Beach. After the takeover by Morgans Hotel Group, Philippe Starck led the renovation project in 1994 as a contemporary family resort. It opened as Delano South Beach to considerable acclaim in 1995.
From the minute you step inside the lobby of Delano South Beach, you’ll notice fantastic furnishings everywhere. Keep an eye out for key pieces such as an original oversized banquette-like chair with three padded walls and pink plush seating, a translucent piano gifted to the hotel by rocker Lenny Kravitz and a brass Salvador Dalí “Leda” chair that’s shaped like a woman with an exposed delicate hand and three heels.
“I remember feeling like you had to live up to that space and that environment as a person,” said Nathan Lump, Travel + Leisure magazine’s editor-in-chief, recalling his first visit to the Delano soon after it opened in 1995. “I remember thinking, you have to be confident to walk in here. And I loved walking in and feeling, I can do this — I can be here.”
In that same year, Ian brought in some executive help to allow him to look for new opportunities. He set his sights on Los Angeles, acquiring the 237-room Mondrian hotel, located on Sunset Boulevard, and reopening it in 1996.
In 1997, the The Hudson New York building was purchased by Morgans Hotel Group and underwent a three-year renovation at the cost of USDD 125 million under the supervision of, again, Philippe Starck. The hotel’s name was changed from The Henry Hudson Hotel to simply The Hudson.
To fund his growing portfolio of boutique hotels, Ian Schrager took on new partners in 1998, joining forces with Northstar Capital Investment Corporation, a New York real estate investment trust. The hotels were consolidated under a new company, Ian Schrager Hotels. While Northstar held a 84% interest, at a cost of more than USD 250 million, Schrager was given a free hand to grow the company, and a spate of deals quickly followed as he looked to spread the Morgans’ vision to other major US cities and around the world.
Ian Schrager’s ambitions continued to grow in the new century. The company opened the Shore Club in Miami in 2001, holding a modest stake in the oceanside resort for which it served as a manager. Ian was also especially interested in making Morgan’s into a lifestyle brand. There was even talk of launching a retail chain of stores called “Shop” to market a wide variety of goods, many designed by Philippe Starck. The idea was supposed to be launched in the Morgans’ hotels in 2001, but other events intervened to derail the plans: the economy soured and, more importantly, the terrorist attacks on 11 September 2001, had a dramatic impact on New York City’s hotels and tourist industry.
Once again a period of expansion resulted in overbearing debt for Schrager, who in 2003 breached bank covenants of USD 355 million. Aside from a drop in travel that hurt occupancy rates across the board in the hotel industry, he also had to contend with imitators, like the W hotels that opened in 1998 by another legendary hotelier, Barry Sternlicht, and drew on elements developed by the Morgans’ hotels, such as (according to the New York Times Magazine) “arty black-and-white photographs, large mirrors leaning against walls, [and] a staff of fashionistas.”
The stable of Morgans Hotel Group properties was trimmed to nine: the original Morgans, Royalton, Hudson, Delano, Mondrian, Clift, St. Martin’s Lane, Sanderson, and the Shore Club.
In July 2005 Ian Schrager stepped down as CEO of Morgans Hotel Group, which had lost money since the start of the 2000s. He retained an ownership stake and consulting contract. On 30 November 2016, Morgans Hotel Group was acquired by Sam Nazarian’s SBE Entertainment Group for USD 805 million. SBE eventually sold its first 50% stake to Accor in 2018 and the remaining 50% in 2020 at USD 300 million, primarily through the redemption of SBE’s debt, according to a statement from Accor.
Ian soon created Ian Schrager Company within the same year, which owns, develops and manages hotels, residential and mixed-use projects.
Ian, with backing from Morgan Stanley, bought the former Ambassador East hotel for USD 25 million in 2009 and spent USD 35 million to renovate it to be the first PUBLIC hotel, according to the New York Times. When added to the purchase price, the total is about USD 60 million, or just over USD 200.000 a room, an ostensible deal in a city where luxury hotel properties regularly trade in the range of USD 300.000 to USD 400.000 a room. With small rooms, Ian’s design sensibility came in handy, including using a lot of white to open the guest rooms.
“The operation of a hotel has a million moving parts,” he told Travel + Leisure. “That’s hard for a perfectionist.” The 285-room PUBLIC in Chicago is finally opened in 2011. It was Ian Schrager’s first project as an independent hotelier since the market crash in 2008 and since his departure from Morgans Hotels Group in 2005. And, Ian Schrager adds, it was probably his most personal. In collaboration with George Yabu and Glenn Pushelberg, Ian came up with the design with lots of help from Anda Andrei, the sharp-eyed in-house architect who has been with him since the mid 1980’s, and other members of his long-term staff.
“It’s not design on steroids,” said Anda Andrei to the New York Times in 2011. “We wanted to keep a lot of the history there because the bones are so beautiful. It’s understated in a way but at the same time glamorous, because there is a certain glamour to clean, beautiful design.”
PUBLIC’s website explains the brand concept as “Ian Schrager has taken the best from the luxury segment, boutique hotels and select service to create a new genre of hotel where everything has been rethought and every original idea updated. At PUBLIC, service matters most. But the key point of differentiation is in the kind and quality of services it offers. The brand will only offer services that matter, those that guests really want and need rather than an array of superfluous services they do not use.”
Fast forward five years, however, Ian Schrager sold the PUBLIC in Chicago in 2016 for the same amount of money he spent to renovate it to Hong Kong-based Gaw Capital Partners.
Ian Schrager, however, hasn’t given up on the PUBLIC brand and on 7 June 2017, his next reiteration of the brand was launched in New York City’s Lower East Side. PUBLIC’s original concept of providing value continues in New York City, where the entry-price for rooms starts at USD 150 per night and the motto remains, “luxury for all.”
Designed by Swiss firm Herzog & de Meuron, guest rooms are stripped back to the essentials “like cabins on a yacht”. Each includes Apple TVs, and an abundance of sockets for charging electronic devices. Instead of frivolous room service, food can be ordered online. Self check-in and keys are also available on guests’ smartphones.
“PUBLIC is the people’s hotel,” Ian said in a press statement. “It’s about inclusivity, not exclusivity. And all of the different elements that we are bringing together in one place: great service, great style, great fun, at a great price, in totality create tremendous value.”
Building on that, the PUBLIC hotel in New York City have PUBLIC Advisors providing personalised services for guests, and the lobby is being designed as a “community space encouraging work and social activities.” Additionally, there is PUBLIC Arts, which is described as a “modular, multimedia venue that can serve as a nightclub, art gallery, cultural centre, performance space, screening room or intimate concert venue,” as well as a nightclub and terrace and an outdoor garden.
Interestingly, while PUBLIC was designed to emphasise value and luxury for all, Schrager’s earlier work with Marriott International, under the EDITION brand, is decidedly much more luxurious and upscale.
On 29 January 2008, Ian Schrager and J.W. Marriott, Jr., kick started their new lifestyle boutique hotel brand, introducing its name as “EDITION”. “It’s a magical combination,” said Bill Marriott, chairman and CEO of Marriott International in press release. “Each hotel will be a new EDITION, a modern genre of hotel that only Ian Schrager can create. These hotels will be an exceptional complement to our brand portfolio and will allow us to use our global platform and operational expertise to create the first truly global branded boutique lifestyle hotel on a large scale.”
Initially developed with an average size of 150–200 rooms, each of the EDITION hotels reflect the best of the cultural and social milieu of its location and of the time. A diverse set of world-renowned architects and designers will be recruited to create one-of-a-kind buildings spanning the complete range of project types, from new construction, to conversions, to dramatic renovations. The pairs expect these hotels to be not just the most aesthetically pleasing in their markets but to be the most environmentally responsible as well. Ian Schrager is leading the effort on concept, design, marketing, branding and food and beverage for EDITION while Marriott International is overseeing the development process, and will operate the properties.
This partnership came together at Waikiki EDITION in Hawaii, opened in 2010. The hotel, a few minutes from the beach, occupies a tower of the Ilikai building, one of the city’s landmarks that some TV viewers may remember from the opening sequence of the original “Hawaii Five-0” series. Room rate was from USD 375 per night.
The second property of the EDITION hotels, the Istanbul EDITION was opened in 2011. Designed by Gabellini Sheppard Associates the 15-story hotel tower features 78 guest rooms, each boasting sensuous rosewood or soaped-oak walls, floors, and ceilings.
With two hotels in operations, however, the EDITION brand faced a turbulent start. The Waikiki and Istanbul EDITION dropped the EDITION brand in less than two years citing lack of supports from both Ian Schrager and Marriott International and limited commercial success. The legal battle took months to settle.
As of now, there are eleven EDITION hotels each located in New York City, Miami Beach, Hollywood, London, Bodrum, Barcelona, Sanya, Shanghai, Tokyo, and Abu Dhabi.
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