Ian Schrager Partners With Highgate to Scale Public Hotels

Ian Schrager is approaching 80 years old, but he’s still pursuing his dream of running a big company. Now, he’s partnering with a major management firm to scale up Public Hotels.

Schrager joined forces with Highgate to operate his Public brand, the Wall Street Journal reported. The partners aim to acquire hotels or small hotel companies, develop properties and convert Highgate assets to the Public banner.

Highgate, which owns or manages more than 400 properties across the world, won’t be taking an ownership stake in Public. It will be involved in acquisitions and management contracts, though.

The hotelier is also dropping his usual pursuit of high-profile restaurant options for his properties, instead opting for fast-casual and takeout food to save on costs.

Despite launching 15 years ago, Public has only a single hotel in operation, a property at 215 Chrystie Street in Manhattan. Public is talking with Danny Meyer to run a food and beverage service at the location, which was recently refinanced with a $310 million loan.

The hotel has been the site of a dispute between Schrager and Whole Foods Market. In July, Whole Foods sued the hotel, claiming the crowd for the trendy rooftop bar blocks overnight deliveries to its East Houston Street location by restricting access to its driveway and loading docks.

An entity tied to the hotel responded by filing a summons against Whole Foods, seeking to stop its delivery trucks from parking “in front or in the vicinity” of the property.

Schrager and Steve Witkoff opened the 28-story building in 2017, but were forced to close it after the onset of the pandemic. The hotel reopened in the summer of 2021, but by the next year, the developers had defaulted on their $189 million senior mortgage and faced a UCC foreclosure on their equity in the property, which the refinancing took care of.

A second hotel is expected to open in West Hollywood in the spring, but that’s still a far cry from the 15 locations Schrager expected to have up and running within seven years of the company’s launch in 2011.

Schrager rose to fame as a pioneer in the boutique hotel space and was a co-founder of Studio 54. He also helped develop Marriott’s Edition lifestyle hotel brand, a partnership that ended in 2022.

— Holden Walter-Warner