NEW YORK | 45 East 45th Street | FT | 100 FLOORS

Govt decides against selling off PIA-owned hotel in New York, to run it through joint venture

The Cabinet Committee on Privatisation (CCoP) on Thursday decided against privatising the Roosevelt Hotel in New York, owned by the embattled Pakistan International Airlines (PIA), and to run it through a joint venture instead.

A meeting of the committee was chaired by Adviser to the Prime Minister on Finance Dr Abdul Hafeez Sheikh to review the one-point agenda of the privatisation of Roosevelt Hotel, owned by PIA Investment Limited in the Manhattan borough of New York City.

According to a Finance Division statement, the CCoP directed the Privatisation Commission to hire the services of a financial adviser to start the process for the transaction in light of a report by accounting firm Deloitte from July 2019 which recommended that “the highest and best use of the Roosevelt Hotel property is to redevelop the site into a mixed-use [property] (through joint venture) of primarily an office tower over retail and condominium.”

The meeting was informed that Deloitte would update its study on the hotel transaction in the next four weeks and the same will be shared with the CCoP.

Additionally, “as requested by the Aviation Division”, the CCoP also decided to de-notify a task force formed last year to develop a business plan and for framing the terms of reference for leasing the Roosevelt’s site and setting up a joint venture project, the press release added.

The task force, whose formulation was approved by the CCoP in its meeting in November last year, was chaired by Minister for Privatisation Muhammad Mian Soomro and included Special Assistant to the Prime Minister on Overseas Pakistanis Zulfi Bukhari and other officials as members.

[…]

On Wednesday, amid reports that the government was holding the CCoP meeting to discuss the plan to sell the Roosevelt Hotel, the PPP had opposed the move, terming it ill-timed.

“Is this the time to sell Roosevelt Hotel, when due to the pandemic property prices have come down significantly and it will result in a loss to Pakistan as we will not get the right price?” PPP’s parliamentary leader in the Senate Sherry Rehman had questioned in a statement.

“The property is worth billions and it was making a profit when I was serving as ambassador to the US,” she added.

The PIA-owned 19-storey hotel with 1,025 rooms plus allied facilities in New York is considered a valuable property that also carries cultural significance for Pakistan. It has remained in the news for the last several years over its proposed auction. However, the management of PIA in the past had always rejected the claims of auction, etc.

The hotel was acquired by PIA Investment Limited on lease during the year 1979 with an option to purchase the property. The airline had purchased the hotel for $36.5 million against a demand of $59.5m by contesting a lawsuit against the owner in 1999. The Roosevelt has been managed by Interstate Hotels & Resorts since 1997.

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This hotel is closing permanently October 31st. Expect a huge tower here in the next decade.

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Not out of the realm of possibility, would be a shame to loose that lobby though, its been well preserved over the years.

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Wishful thinking but wouldn’t it be great if a RAMSA designed building would replace this glass monstrosity maintaining the present lobby and any other significant public spaces. Just saying.

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this would be a difficult loss to take, but I maintain that if the replacement has a decent design and is very tall, its worth it. 432 Park required the sacrifice of the Drake but it spawned a multi-millionaire magnet. If this building going the way of the Dodo makes way for an attractive supertall office tower, then so be it.

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Glass monstrosity? This is a pre-war masonry building. Perhaps you’re thinking of the Grand Hyatt on 42nd Street? That one is indeed a glass monstrosity, although it too began its life as a pre-war masonry building. Sadly, I fear the Roosevelt will follow the same life trajectory.

In any case, it makes me sad to think we might lose this bit of old New York. When I first came to New York as a kid it was buildings like this just as much as buildings like ESB and the Chrysler that thrilled me.

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Sorry, you are correct. I was thinking of the Hyatt. This lobby would be a loss. At this point any grand prewar interior would be a loss for the city. Every time one hits the trash heap it is one more that will never be enjoyed and will never be replaced. Thanks for the correction.

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PIA Might Convert the Roosevelt Hotel Into a 100-Story Building

The Senate Standing Committee on Aviation sought a detailed briefing by the Pakistan International Airlines Company Limited (PIACL)’s Board of Directors in the next meeting on financial stability plan and future vision to transform the national flag-carrier into a profit-earning entity.

The committee meeting, chaired by Senator Mushahidullah Khan, was briefed by the PIACL Chief Executive Officer (CEO) Air Marshal Arshad Malik on reports about the closure of the airline’s Roosevelt Hotel in New York, besides financial constraints and capacity issues of the airline.

He made it clear that PIA is not going to sell the hotel, but it will be closed down by December 31, for its renovation and future utility plans.

The PIA CEO said that the privatization commission had been approached through the federal government, which would hire a financial consultant through an international tender to devise a future course of action, considering all the available options.

It would be decided later whether necessary renovation or repair work would be carried out or the existing building will have to be demolished for reconstruction and raising a 100-story hotel for which local bylaws are conducive.

Arshad Malik said PIA’s Roosevelt Hotel, a 19-story building located at a prime location, was acquired in 1978 on a partnership, from its profits and as a part of the PIA diversification strategy.

In 1999, he said, it acquired 100 percent shareholding at $36.5 million from its resources and without any aid from the government.

He said that the property had more than a thousand rooms, having an area of 43,313 square feet, adding that it was run by the world’s premier Hotel Management Company ‘Interstate Hotel and Resorts’ USA. He said that the current market value of the hotel, assessed by M/s Deloitte, was $662 million based on the highest and best use.

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100 FLOORS? This will easily be ~1300ft or more

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I’m inclined to preserve this, though that was never in the cards. That being said, a new tallest for NY would be nice.

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If in the future they go for a 100 floor tower, with a hospitality (hotel) functionality, I wonder how many rooms it will have. Given the footprint of this parcel is massive. I mean in theory, it could be the largest in the city by room count and the demand once the tourists really return (pandemic over) will make it profitable.

Right now obviously is not the time, but if NYC returns to its pre-pandemic tourism/visitors numbers, and continues an upward trajectory, a hotel would be profitable, especially in this location.

A larger room volume could also make them competitive and essentially make the rooms cheap compared to its surrounding competitors. An advantage in a tight hotel market come certain holidays or months.

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I think that it’s time to resurrect this guy!

It will be interesting to watch, I assume that something will happen with the site but its hard to know what will given the turmoil in Pakistan over the government.

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One Vanderbilt is 1301 ft to the top of the roof and has 73 stories (67 actual)

I imagine this will have tall windows like one V and most modern towers, so maybe this could be ~1500ft to the top of the roof

Modern office floors are generally taller (12-15 feet is common) than those in a hotel. It wouldn’t surprise me if a 100-story hotel was roughly equivalent to a 73-story office.

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I feel like I say this for every redeveloped old building, but I would love to see the Roosevelt incorporated into the base of the new tower, a la Hearst. Building a 100-story tower on top might mean gutting the existing building, but if they can preserve the exterior and the lobby, I would be happy.

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That’s what I was thinking too. Even if it was 100 floors, if its just pure hotel, it won’t be as tall as a 100 floor office tower with modern ceiling heights. Now if its mixed used, we might have something massive in store.

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@MarshallKnight

On a side note, your looking sharp in your profile pic!

:business_suit_levitating:

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@chris08876
Thanks dude! That’s from my best friend’s wedding last year down in Cajun country. Simpler times.

I won’t be surprised if this reaches 1,400 feet. But boy do I hope it reaches 1,600 feet

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