BD Hotels to become a new owner of Hotel Chelsea

The boutique hotelier aims to reopen New York landmark in 2018

Jul.July 08, 2016 08:00 AM

The Hotel Chelsea, setting for many tragedies and triumphs of some of the world’s biggest cultural icons, is again entering a new phase.

BD Hotels TRData LogoTINY, headed by Richard Born and Ira Drukier, is buying a stake in the landmarked hotel at 222 West 23rd Street and is gearing up to restart renovations, Born told The Real Deal. He wouldn’t disclose BD’s stake in the hotel — since the deal is yet to close — but said that the boutique hotelier will be in charge of redeveloping and operating the hotel. Renovations will start next month and the property will reopen with 120-plus hotel rooms by the second quarter of 2018, Born said. BD Hotels has been working with the hotel’s 51 tenants to renovate and, in some cases, preserve, their apartments.

“Everything’s tailored to the individual needs of the tenants,” he said.

One tenant of the hotel cut a deal with the new owners to preserve portions of his apartment, where poet Dylan Thomas went into a coma four days before his death in 1953. The room’s footprint will be preserved and a plaque will hang outside the apartment.

“After such a long battle I’m thrilled that more of this great writer’s heritage will be preserved for future guests of Hotel Chelsea,” the room’s current tenant, Artie Nash, said in a statement. Nash will be moving out this month as part of the deal, he told TRD. Nash has been fighting to preserve the room for at least nine of the 11 years that he’s lived there.

“Ultimately, I think it’s the best possible outcome,” he said.

The hotel’s history is equal parts inspirational and grisly. It was home to the likes of Arthur Miller and Patti Smith. Bob Dylan wrote “Visions of Joanna” in one of the hotel’s rooms and Arthur C. Clarke penned “2001: A Space Odyssey” in another. Nancy Spungen, girlfriend of Sex Pistols bassist Sid Vicious, was found stabbed to death in the room that she shared with him.

BD’s new role in redeveloping the hotel follows the exit of Hotel Chelsea’s CEO, Ed Scheetz, who partnered with a group of investors in 2013 to buy out the Chetrit Group and Clipper Equity’s stake in the hotel.

Over the years, the hotel has been a battleground between tenants and owners. Chetrit had faced fierce opposition from tenants of the 65 rent-stabilized apartments in the building, some of whom accused the developer of failing to provide “heat and hot water,” the Wall Street Journal reported.

Page Six reported in March that Scheetz had parted ways with co-owners, Bill Ackman, founder and chief executive of Pershing Square Capital Management LP; Leucadia National Corp. chairman Joseph Steinberg and real estate investment firm Wheelock Street Capital. At the time, the newspaper reported, BD Hotels was in talks with the remaining owners but a deal hadn’t been finalized.

The investor group faced massive delays in the hotel conversion. They moved tenants to different apartments or to nearby hotels, but were unable to shut down entire floors to renovate swiftly.

Representatives for the other investors did not immediately respond to requests seeking comment.

BD Hotels, the company behind the Mercer Hotel, Stanhope Hotel and Hotel Élysée, announced in May that they would start leasing apartments at their micro-apartment, the Pod Times Square.

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