The Dark Side of Real Estate – Aby Rosen’s Role in the Downfall of the Gramercy Park Hotel

Commons:Wikipedia Takes Manhattan

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Just as the iconic Chelsea Hotel on Manhattan’s West Side boasted a colorful and storied past replete with bizarre stories about the happenings of celebrity guests as well as cultural icons such as writers and artists, so too does another landmark New York City hotel.

The Gramercy Park Hotel on Lexington Avenue has achieved its own particular status as an iconic building in New York City. This hotel has its own share of celebrity history. According to a Wikipedia report, actor Humphrey Bogart married his first wife Helen Menken at the hotel, and the Joseph P. Kennedy family, including a young John F. Kennedy, stayed on the second floor for several months before the family moved to London so the elder Kennedy could take up his post as the American ambassador.

During the Great Depression, baseball legend Babe Ruth was a regular bar patron and an autographed picture of Ruth hung in the bar until it disappeared in the 1960s. When actor James Cagney and his wife lived nearby at 34 Gramercy Park, they were frequent diners at the hotel. In the 1940s, Edmund Wilson lived in the hotel with novelist Mary McCarthy, and humorist S.J. Perelman maintained his residence there, dying in his room in 1979.

Other cultural icons such as Madonna and the Rolling Stones have also slept at the Gramercy Park Hotel and in 1973, rock legend David Bowie checked in for two weeks.

The hotel, however, has followed the well trodden path of other grand New York City hotels in that it has shut its doors. Currently, the hotel finds itself in the midst of an acrimonious legal imbroglio between two of the biggest Manhattan real estate titans around. As to whether the hotel will ever be open for business again is as good as anyone’s guess but at this juncture it remains unclear.

Speaking to the Post, Ben Hartley, executive director of the National Arts Club, which is located across the private park from the hotel said: “We have a good relationship with the Gramercy Park hotel and we are sorry to see the restaurant on the ground floor closed.” The restaurant known as Maialino was operated by Danny Meyer. The sign on the door of the restaurant said it was temporarily closed but it told patrons that in order to receive updates on the status of the restaurant they should check on its Twitter and Instagram pages, as was reported by the Post.

On November 12th, Meyer posted on Twitter: “12 years ago this weekend we opened @maialino_nyc. Today we continue to wait for the GPH hotel to reopen so that we can get back to cooking for you. We miss you too, share the frustration, and can’t wait for the day we’ll be back.” Also closed was the hotel’s famed watering hole known as the Rose Bar which happened to be a favored hangout amongst varied celebrities and the glitterati.

Hartley added: “The Gramercy Park Hotel was a great resource and it’s a shame that it’s no longer open. The hotel was really known as a creative space.”

Insiders in the industry are pointing fingers at real estate mogul Aby Rosen for allowing the Gramercy Park Hotel to fold in a battle of wills.

Rosen, 61, seems to have a reputation for allowing his properties to fall by the wayside due to turmoil he caused. Such examples include Manhattan’s iconic Lever House and Seagram buildings, as was reported by the Post.

Also speaking to the Post was a Manhattan art collector who said of Rosen, “He’s a philistine. He takes landmarks and he ruins them. He takes the soul of marquee buildings.”

A real estate investor that knows Rosen noted his “hardball” and “brash” reputation in the real estate field in terms of buying and selling properties. The hotel industry in the city is still trying to stay afloat despite the devastating impact of the pandemic as well as competing with AirBnB to reel in huge profits. The investor said that this being the case, Rosen is most probably attempting to get out of the hotel business as quickly as possible.

The investor, who spoke to the Post on the condition of anonymity said, “Aby Rosen is trying to negotiate a better deal for himself. If he can’t negotiate better terms for the Gramercy Park Hotel, he doesn’t care about losing the building.”

When contacted by the Post, a spokesperson for Rosen said that they had no comment.

RFR Realty which controls the hotel was sued by Solil Management, (which owns the land lease on the property at 2 Lexington Ave) over $80 million in back rent from November 2020 to April 2021, as was reported by the Post. According to a legal complaint, Rosen’s RFR was leasing the land for $5.2 million a year but when the pandemic emerged the company stopped fulfilling their financial obligation, claiming that the leasehold was “worthless” due to the ruination of the city’s tourism industry.

Justice Robert Reed dismissed the suit against Rosen and RFR on September 30th although his other holding company, GPH Ground Tenant LLC, may still be responsible for the rent debt, as was reported by the Post.

In June 2020, the Post’s Page Six reported that Rosen was posting photos on Instagram of “himself and his wife on the beach in the Hamptons, shots from inside his sprawling modern art-filled Southampton mansion on the street named Billionaire Lane and also of the pool at his picturesque place in St. Barts during the pandemic.”

At present, the hotel may be at risk of being tossed on the ash heap of history.

Rosen is no stranger to controversy. He is the son of a survivor of Auschwitz who arrived in New York from Germany in 1987. In 2008, Rosen told New York Magazine “I have zero fear.”

Prior to acquiring the Gramercy Park Hotel, Rosen’s company negotiated a leasehold agreement on the landmarked Lever House skyscraper on Park Avenue, according to the Post. Rosen defaulted on payments for such an extended duration that the building was threatened with foreclosure, the report indicated.

Rosen also angered conservationists when he took control of the Seagram Building in Manhattan; instituting design changes at the iconic Four Seasons restaurant, according to the Post report. The Post said, “In 2014, he insisted upon getting rid of a 20-by-22 foot Picasso tapestry he dismissed as a “schmatte” that had hung in the restaurant for more than 50 years. Rosen wanted to stuff “Le Tricorne” into storage to alter the wall behind. After a nasty legal battle in New York State Supreme Court, the tapestry was transferred to the New York Historical Society, where it is on display.”

Rosen’s company, RFR, ceased maintenance of the hotel and thusly, court papers indicate that the property has deteriorated immensely.  The papers also say that the mechanical systems in the hotel are in poor repair and the façade requires work mandated by the city. In addition, the HVAC equipment is “patched with duct tape” and the elevators are in need of servicing.

The Post reported that Rosen removed the hotel’s art collection and stopped paying taxes, but did make an attempt to renegotiate the long term lease in 2019. At present, Rosen’s companies owe nearly $2 million in city taxes, according to public records.

Court papers also indicate that RFR and Rosen’s other company GBH which operate the hotel received $6.3 million in loans from the Small Business Administration’s Paycheck Protection Program in 2020 and 2021, as was reported by the Post.

“Rosen has chosen not to operate the Gramercy Park Hotel and has kept it closed to paying guests,” say court papers, which also allege that Rosen housed his mother in a three-bedroom suite at the hotel as well as employees from his RFR Realty company during the pandemic. The lease agreement specifically requires that the building has to be run as a “first class hotel,” court papers also say.

The Post reported that the Gramercy Park Hotel which was constructed in 1925 by the developer brothers Bing & Bing was the site where writer Edith Wharton (who penned the classic “Ethan Frome”) and architect Sanford White once lived. The Renaissance Revival-style hotel hosted such guests as Kennedy patriarch, Joseph, who stayed there for months with his family, including 11-year-old JFK, before taking up his ambassadorship in London in March of 1938, as was reported by the Post.

The hotel became popular with bands like The Clash, the Rolling Stones and Bob Dylan. Blondie’s Debbie Harry reportedly lived there for a while, as did Bono, as was reported by the Post. The hotel continues to exhibit paintings by noted artists, including Jean-Michel Basquiat, Damien Hirst, Richard Prince, Julian Schnabel, Cy Twombly and Andy Warhol.

Filmmaker Max Weissberg, whose grandfather Herbert Weissberg bought the 509-room hotel in 1958 and ran it until a year before his death in 2003 wrote that it was just about the only hotel in the city where musicians “could order a guitar string from room service or order cocaine “like a pepperoni pizza” from the doormen and chambermaids,” as was reported by the Post.

After Weissberg’s death, Rosen stepped in with partner and hotelier Ian Schrager (of Studio 54 fame) to operate the hotel. The two renovated the hotel in collaboration with artist Julian Schnabel. Schnabel designed the interiors and put in many fixtures and furniture pieces throughout the hotel. In 2010, Schrager sold his interest in the hotel to Rosen. (Additional reporting by Fern Sidman)




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