![]() The Plaza Hotel where workers are protesting a plan to convert 650 hotel rooms into luxury condos. |
Three years ago, the notion of building a 14-story luxury hotel in a neighborhood once known for transvestite prostitutes and dangling cow carcasses seemed like a particularly risky investment.
Still, despite the attacks of September 11 and the economic decline that followed, developers of The Hotel Gansevoort in the Meatpacking District forged ahead, believing that a rooftop swimming pool with underwater music, a club named "G-Spot," and a lobby decorated with eel-skin and mohair was exactly what the city needed.
Apparently it is. Today, less than a year after opening, business is booming at the Hotel Gansevoort.
"We attract the hip, affluent, under 40 crowd," said Michael Lindenbaum of the Hotel Gansevoort, sporting a Hugo Boss suit, the mandatory uniform for hotel staff. "We're a South Beach/L.A. kind of property, a property with personality."
Rooms, which range from $395 to more than $5,000 a night, are booked full of business executives, fashion models, and celebrities like Drew Barrymore, Jay-Z, and even hotel heiress Paris Hilton (who could presumably get a room at one of the four Hilton hotels in Manhattan).
But one of the best things about the rooftop of the Gansevoort, those in the know say, is the chance to peer into the even more exclusive Soho House hotel across the street, which has a $2,000 a year membership fee.
These trendy hotels owe their success to more than just celebrities and eel-skin; the entire hotel industry in New York is stronger than it has been in decades.
Last year, New York City drew more tourists than ever before - 39.6 million visitors, according to the mayor's office. Hotel occupancy rates are at the highest level since 1969. And dozens of new hotels are currently under construction across the city, including Harlem, where developers last week broke ground on the first hotel in the neighborhood in 35 years. (See related article Criticism of New Harlem Hotel Lingers.)
For all that, some see a hotel industry threatened by a net loss of rooms and jobs. Some of the city's most recognized historic hotels may also be heading for extinction. And with new hotels springing up around the city, more of New York's neighborhoods are in danger of becoming tourist attractions.
![]() The Hotel Gansevoort in the Meatpacking District. |
The first building built in New York specifically as a hotel was the City Hotel in lower Manhattan in 1794 - one of the first hotels in the nation. By the early 1900s, there were approximately 700 hotels in the city. Coming to New York to stay in a nice hotel and shop is a tradition tourists have enjoyed for more than a century.
New York's hotels have often reflected the prestige and danger of the city.
In the 1920s, the Algonquin Hotel was a center of theater and literary life. Eloise, the precocious little girl who lived at The Plaza, gave millions of readers a glimpse (although fictional) into upper-class hotel life in New York. And punk rocker Sid Vicious killed his girl friend Nancy Spungen at the The Chelsea Hotel.
The city's hotels have not only been for the rich; they have also housed the middle-class and even the poorest city residents. Neighborhoods like the Bowery were once overrun with welfare hotels and "flop-houses." City government has used hotels to house homeless people, preferring to pay nightly rates, rather than build permanent housing.
The turning point in New York's modern day hotel industry, many say, occurred in the early 1990s, when Mayor Rudolph Giuliani reduced the city hotel tax and the state eliminated its hotel tax as a way to stimulate the local economy. At the same time, the city's crime rate dropped, Wall Street boomed, and many began to rediscover New York as a place to visit.
"The repeal of the [state] tax signaled, in my judgment, the start of the resurgence of New York," Joseph Spinnato, president of the Hotel Association of New York told the New York Times.
In the months after September 11, 2001, the hotel industry, like any business related to tourism, took a huge hit. Hotel vacancy rates declined 10 percent and the average price of room decreased by as much as $50 a night.
The recovery has been quicker than many expected.
The hotel business is again thriving thanks to the low crime rate, positive image among people around the world, and a weak U.S. dollar, which has lured more foreign visitors who spend four times more than domestic travelers.
Today, there are approximately 70,000 hotel rooms in the city, the most of any city in the country. Of the 39 million tourists who come to the city, about two-thirds live in the northeast, within 250 miles, and many make day trips. But the other third - people from across the nation and around the world - are looking for a place to spend the night.
Experts predict that the average room rate in New York will rise to $236 next year, compared to the next most expensive city, Honolulu, where the average rate is $143 a night.
"All indicators point to 2005 as another watershed year for New York City's visitor industry," said Cristyne Nicholas, president of NYC and Company, the city's tourist bureau.
![]() Design for the Marriott Hotel in Harlem at 125th Street and Park Avenue. Related in Community Gazettes: |
"The hotel industry is so strong right now, you could develop one almost anywhere and make it successful," said John Fox of PKF Consulting, a company that specializes in the tourism industry.
In the coming years, dozens of new hotels will test the strength of the hotel economy.
Last week in Harlem, developers began building a 34-story, 280-room Marriott on 125th Street, the first hotel to be built in the neighborhood since the Hotel Theresa closed in 1970. (See related story about the Harlem Marriott)
At Columbus Circle, the new Time Warner Center includes the 250-room Mandarin Oriental Hotel, complete with $2,400 a night suites.
Hampton Inn is opening new hotels in midtown, the financial district, and near La Guardia airport.
In downtown Brooklyn, the Marriott at MetroTech recently announced it was expanding its hotel by 280 rooms.
Jason Pomeranc, who owns the trendy 60 Thompson in Soho, has new hotel planned for the Lower East Side.
And Andre Balazs, the owner of The Mercer Hotel in Soho is planning two new hotels in the city, including one called the QT, which will feature hostel-style bunk beds, each with its own flat screen TV.
But the hotel business in New York is about more than just providing a roof and a bed - it is about service, marketing, image, and style. Like the discos of the 1970s, stylish entrepreneurs have become trendsetters, who draw as much public attention as the celebrities they attract to their establishments.
"Hotels are great public living rooms where the combustion of celebrity, drinking, and sexiness of seeing and being seen can be very theatrical," Donald Albrecht, author of the book "New Hotels for Global Nomads" told the New York Times.
New York City's real estate market is so strong that many hotels are converting part or all of their space into residential apartments - and hoping New Yorkers will want to live there.
Hotels like The Mayflower, Helmsley Windsor, Delmonico, and Empire have all been sold in recent years and will be at least partially converted into residential buildings.
The Plaza is the most high profile example of this trend.
Beginning in April, The Plaza will convert 650 of its 800 hotel rooms on the upper floors into luxury condos, which will sell for between $2,500 to $3,000 a square foot. The Plaza will still maintain 150 hotel rooms (none of which will have Central Park views) and historic spaces like the Grand Ballroom, Palm Court, and the Oak Room will remain.
"Today, people are really buying a lifestyle, and owning [an apartment] at The Plaza will be like living in a hotel, but you own it," Dottie Herman of Prudential Douglas Elliman told the New York Post.
Financially, putting apartments in a hotel makes sense for owners and developers. Purchase prices can potentially generate even more annual income than nightly hotel rates, and it is easier to finance hotel construction if part of the building will be sold to apartment owners.
Despite all of the new hotel construction in the city, the number of hotels converting a portion or all of their rooms to apartments means that New York may actually have fewer hotel rooms, according to tourism industry experts.
"It is not an indication of weakness in the hotel industry, but the strength of the residential market," said Fox. "We could actually see a net loss of hotel rooms in the city."
Last week, when the new Marriott Hotel in Harlem hotel broke ground, Mayor Michael Bloomberg promised it would create 1,000 permanent jobs, half of which have been promised to local residents.
"Harlem's renaissance is moving forward at full speed," the mayor said.
The hotel industry is considered by many to be a good source of jobs.
Many hotel jobs are unionized and come with benefits. The average annual salary is approximately $40,000 a year. And hotels provide good entry-level positions for people with limited skills or education. Immigrants comprise more than half of the hotel and hospitality workforce, according to the Hotel Employees and Restaurant Employees International Union.
Still, it is a comparatively small industry; only about 38,000 - or 1 percent of New Yorkers - work at hotels. Job growth in the industry has been slow in recent years, increasing by only 1.4 percent in the last five years.
Unions say that changes in the way hotels are owned and operated are making it more difficult to protect workers.
About a quarter of all hotel rooms in the nation are owned by four companies - Marriott, Hilton, Starwood, and Hyatt - and labor agreements in less expensive cities can set difficult precedents for negotiations in New York.
Also the trend of more hotels converting to residential apartments has workers worried.
The plan to convert hotel rooms to condos at The Plaza will mean a loss of 900 jobs. Union leaders, trying to stop the plan, have parked a giant bus in front of the hotel emblazoned with the words "SAVE THE PLAZA."
"We think the continued closure of hotels eliminates the best jobs in the city for blue-collar people," said Peter Ward of the hotel union. "And the city can't afford that."
In an effort to create more tourism-related jobs, Mayor Michael Bloomberg has outlined an aggressive plan to double the Jacob Javits Convention Center and create a new convention, sports, and business district on the West Side of Manhattan.
Although the fate of the proposed West Side stadium for the New York Jets is still uncertain, the State Legislature and governor have approved the plan to expand the convention center , which includes a 1,500-room hotel on 42nd Street and 11th Avenue and millions of new square feet to develop hotels in the surrounding area in the future.
The hotel and tourist industry has been a key proponent of the expansion of the Javits Convention Center.
New York's convention center ranks 18th in exhibit space nationwide and is too small to accommodate about a quarter of the largest trade shows. According to officials, the city has lost 800,000 hotel room nights over the last five years when trade shows chose to go to other cities with larger convention centers.
"Expanding the Javits Center is the number-one priority for New York City's hotel industry," said Spinnato of the Hotel Association of New York City.
In order to help pay for a larger convention center, the industry even agreed to a $1.50 per key per night tax, a sharp turn-around from a decade ago when the hotel industry blamed high taxes for sluggish business.
But some question if a new convention center will really pay off for the hotel industry.
More than 40 other cities across the country have either recently expanded their convention centers or are planning to do so. And since the convention industry has not grown significantly in recent years, each city will be competing for a share of a limited business.
While high average hotel rates in New York are good news for hotel owners, some argue New York will likely lose future convention business to other less expensive northeast cities like Philadelphia or Boston.
"New York has had a hard time attracting out of town conventions because of the high cost of hotels," said Jonathan Bowles of the Center for an Urban Future. "Hotel costs are one of the top considerations and it will always limit significant new business."
While some New Yorkers fear the loss of historic hotels like The Plaza, others fear trendy new hotels may overrun their neighborhoods, bringing buildings that are too tall and out of character with the rest of the area. They also fear noise, traffic, and high real estate prices.
In Harlem, seven teams of developers are competing to remake the Loew’s Victoria Theater on 125th Street. The property, just a few doors down from the Apollo Theater, is owned by the state, which is evaluating various proposals, including several that call for massive, modern hotels that would rise above smaller buildings on the block. Starwood Hotels and Resorts has proposed a $103 million W hotel with 156 rooms and 58 condos. Another proposal calls for a B.B. King jazz club and a five star, 304-room hotel.
On the Lower East Side, even young, stylish New Yorkers feel they are being driven out of the neighborhood by developers like hotelier Jason Pomeranc, who is planning a 22-story hotel on Allen Street and was quoted as saying that he looked forward to "the opportunity to not only impact the skyline, but to begin creating it." Residents of Soho have frequently complained about noise at Pomeranc’s other hotel, 60 Thompson Street. Last year, City Councilmember Alan Gerson called the hotel the "worst violator we’ve seen in the neighborhood."
And in the Meatpacking District, properties like the Hotel Gansevoort, the Maritime Hotel, and the Soho House (and soon The Standard, another hotel proposed by Andre Balazs) have helped transform the neighborhood into a tourist attraction.
“This year was the first time I saw a couple of British women walking around with a guidebook, saying `Is this the Meatpacking District?’ which is both an advance and a huge step back,” said Michael Musto, nightlife writer for the Village Voice. “Once you’ve gotten into Fodor’s, the writing is on the cobblestones.”
Related Links
New York State Hospitality and Tourism Association
Curbed.com - website covering development in NYC
Hotel Chatter (news of the industry)
Â
The buzz around town is that Wal-Mart is perched to devour Gotham, the last big city to be attacked by the global king of discounting. Walmart is proposing a 132,000 square foot store in Rego Park, Queens and scouring the rest of the city for giant holes to fill with its corporate flea market. The company calls this city of world-class sidewalk shopping “the next retail frontier.”
The reaction to Wal-Mart by organized labor is understandable. The company is the largest employer in the United States and the world’s biggest retailer, with annual sales of $256 billion. While dozens of suburban-style malls have crept into the outer boroughs in the last couple of decades, Wal-Mart is known as the industry’s supreme cut-throat, the mother of all anti-union mallers. (See Wal-Mart Watch ) We’ve all heard how they ban unions, cut wages, make their employees pay for their own health insurance, and drive out local businesses. According to Brian McLaughlin of the New York Central Labor Council, "Wal-Mart has deployed ruthless intimidation tactics while driving down wages and benefits in the retail industry and beyond.” Others hail the virtues of local retailers in creating viable communities.
The reaction by community activists is also understandable. There is fear that Wal-Mart’s bullying tactics will make it hard for neighborhoods to control their own destinies. Already groups in Queens and Brooklyn are building up the opposition army. At recent City Council hearings, some floated the idea of a moratorium on all new superstores.
These reactions feed a growing concern that Gotham’s great cosmopolitan culture will disappear. “Is America’s greatest city succumbing to â€burbism?’” wonders Jane Holtz Kay, author of Asphalt Nation. “Is the nation’s most vibrant urban nexus substituting suburban sprawl for the pulsating vitality of its neighborhoods?”
There are also many voices cheering Wal-Mart on. Most of them talk about the bargains and choices Wal-Mart offers. New Yorkers who love to shop on Orchard Street and Canal Street know what that’s all about.
Other voices welcome all superstores because they say they bring dollars into the city. The mayor and City Planning Department claim that opening the way for these giants will keep shoppers from crossing the city line to shop in Long Island and New Jersey. Never mind that corporate retailers take their profits out of the city while local retailers tend to spend them locally.
True, this isn’t just a Wal-Mart matter. This is especially obvious when we take a look at the regulations the city has at its disposal to deal with big box stores in general. What we find is a very weak set of land use regulations that poorly equip city government and neighborhoods to deal with big box projects. First of all, most neighborhoods don’t have any plans that show what they want preserved and developed in the future, including what kind of retail space is needed and wanted. The City Planning Department doesn’t work with neighborhoods to create positive visions of what their neighborhoods should look like, so local residents and businesses usually find themselves forced to react defensively and negatively to proposals by developers.
Secondly, the city’s zoning covering large-scale retail facilities doesn’t regulate very well the things that local neighborhoods care most about, even those who might want to welcome big retailers. In 1996, the City Planning Department proposed zoning changes loosening restrictions on the siting of big box stores, but they were turned down by the City Council. The failed zoning changes didn’t address demands from neighborhoods and professionals to tighten up the rules so that mega-stores emulate our grand tradition of downtown department stores rather than copy Minnesota’s Mall of America. It also opened up new opportunities for big box stores to go into vibrant industrial areas, drive up rents and drive out good jobs.
The main thing wrong with the zoning is that it allows developers generous amounts of parking. This guarantees that the stores will function like suburban-style malls. Traffic and air quality problems neighbors fear the most will become a reality. The mandated environmental impact studies usually lead to a few traffic management changes that only open the way for more traffic. In a city that has a great mass transit system and a relatively low level of car ownership, surely the suburban model featuring acres of asphalt doesn’t belong. If Home Depot can open up a store in Manhattan without parking, it can be done in the outer boroughs too. There, developers and neighborhoods would have to come together to figure out how big retailers can fit into existing neighborhoods and act as anchors to reinforce local businesses instead of undercutting them.
Another problem with the city’s zoning is that there is very little control over building design. Too many giant stores can open up in New York as-of-right, without the public review that just about every suburban store has to undergo. Superstores can assault their new neighbors with ugly, windowless concrete walls on three sides. These blank facades kill all street life, the very thing that makes New York an exciting place to be. No one has yet quantified how many suburbanites who now flock to the city on the weekends would stay home and go to their own malls if what we have to offer them is the same as they already have in their own backyards.
So maybe a moratorium is a good first step so we can have a public discussion about how to change the zoning and how to plan in the long-term. Right now, nobody’s looking at the long-term. For corporations, the horizon has to be the bottom line or their stockholders would cut and run. And since global corporations have to keep growing in order to survive, they’re always looking at their new markets, not the old ones. Like most corporate retail giants, Wal-Mart will cease being profitable when it runs out of choice new markets where it can expand its global network. They’re finally getting around to central city markets like New York because they’ve run out of green fields in suburbia. But even if they can gobble all of us up, what could be next? It’s hard to believe that among all its achievements Wal-Mart has discovered the formula for eternal profitability. What will happen to its elephantine consumer meccas when the next trend in retailing hits (which could be back to Main Street)? Will they go belly-up like Woolworth and A&P did in a previous shift in trends? What will happen when China starts charging more for its merchandise? When energy costs shoot up and start emptying more malls? Lots of neighborhoods may be stuck with giant sores that will be much more difficult to heal than the tiny spaces left over when little mom-and-pop operations close up because the owners move to Florida.
Stay tuned. The latest news out of Canada is that Wal-Mart is closing down its first store ever to prevent it from going union.
Tom Angotti is Professor of Urban Affairs and Planning at Hunter College, City University of NY, editor of Progressive Planning Magazine, and a member of the Task Force on Community-based Planning.Â
When William Johnson became mayor of Rochester, New York, he made a bold change in the way that city did its planning: “I had to learn to listen.”
He listened, that is, to people who lived in Rochester’s neighborhoods. “We divided up the city into districts and asked citizens to envision their futures, look at their assets and help revitalize the city.” Then he made another bold change, in the budget: “Now we allocate funds for neighborhood priorities.” Rochester’s program is called “Neighbors Building Neighborhoods.”
Johnson spoke at the Summit on Community-Based Planning in New York City, held late last month at the Municipal Art Society, where about 100 planners and community people in attendance heard Johnson’s story of how he turned over responsibility for community planning to neighborhood-based groups. Then they dreamt that New York City would do the same.
Summit participants broke out into workshops where they hammered out proposals for community planning in New York City, taking up Johnson’s challenge to “think big.” The starting point seemed to be a consensus that the system is broke and needs to be fixed. Over and over and again people testified that there is little support by city officials and agencies for community planning. Fourteen years after the City Charter was revised to give the city’s 59 community boards explicit authority to prepare their own plans, only seven have been approved. Many more are slowly wending their way through the cumbersome review process. Some people told stories of how they had spent years of volunteer time to develop proposals only to have the Department of City Planning pick them apart and take out whatever it did not like, leaving a plan that few were satisfied with.
Once the plans are approved, city agencies, and the planning department itself, treat them as “only advisory,” which means they get filed away and forgotten, confirming everyone’s worst prejudices about the futility of planning. And in at least one case cited by some conferees – the Greenpoint and Williamsburg plans in Brooklyn – the planning department responded to the neighborhoods officially approved plans by promptly making its own zoning proposals that violate the basic premises of the neighborhood plans. Earlier this month, Community Board One in Brooklyn, which covers Greenpoint and Williamsburg, turned down the planning department’s zoning proposal.
The ideas for changing this state of affairs facing community-based planners ranged from the immediate and mundane to the visionary. They included, for example, giving more technical and financial resources to community boards and community-based organizations, to both plan and to implement their plans. One panel called for the city to fund every community board so they can contract their own planners, as called for in the City Charter. It was also noted that the average board serves 135,000 people, larger than whole cities like New Haven, Connecticut, but with a tiny budget of only about $200,000 and miniscule professional staff. Some participants wanted to see community boards have more than advisory powers, bigger budgets, more professional staff, and more of an ability to bring city agency representatives to the table as partners in decision making. Many proposed that the city provide training for community board members and staff, and one panel wanted city schools to orient students to community board functions. There was also a recommendation that community boards be able to propose legislation.
While the call for the city to support its community boards was clear, there was also some sharp criticism of community boards for not being representative of their diverse constituencies, inclusive and accountable. There were stories of community board members who didn’t seem to understand what they were voting on and others who were too powerful and appeared to have life-long positions. At least one workshop called for uniform guidelines for board membership and procedures across the city, greater outreach to constituents, and oversight of board members and those who select them. Many felt that community planning should be an option for all community-based organizations, not just community boards.
Many of the ideas generated in the summit came out of the Task Force for Community-based Planning, a three-year-old coalition of community and professional groups that sponsored the recent event. With staff support from the Planning Center of the Municipal Art Society, the Task Force developed the first-ever collection of community-based planning efforts in the city – the Briefing Book, available at the Municipal Art Society Website, and on Gotham Gazette’s Community Gazettes.
What It Will Take
If we look at other cities in the United States, such as Rochester, Seattle, and Baltimore, where community planning is widespread and institutionalized, there appear to be three central ingredients to make it work. In New York City, a city of hundreds of neighborhoods with many experienced and sophisticated local activists, none of these elements are in place.
First, there has to be the political will. The executive and legislative branches (mayor and city council) have to want genuine community empowerment. That doesn’t mean just letting people participate in public meetings – the community boards can already do that. It means letting neighborhood people make decisions about government priorities, and that means influencing the city’s budget and service delivery. It also means that the mayor and city council have to be prepared to accept some local decisions they may not agree with.
Secondly, there should be a broad strategic plan governing the city as a whole This will help ensure that neighborhood-based decisions don’t contradict city-wide policies or enact exclusionary measures. In the other cities with community planning, there are city-wide plans that form the groundwork for local plans. In Rochester, for example, the backdrop for neighborhood-level planning is the Rochester 2010 plan.
Third, the city has to put its money where its mouth is. Neighborhoods have to have the money they need to do the planning and to implement their plans. Every plan should have a budget and its priority proposals should find their way into the city’s capital and expense budgets. Seattle, for example, has a Department of Neighborhoodsthat every year funds neighborhood priorities.
At the summit on community-based planning, the elephant in the room was the Bloomberg administration, the latest in a long line of imperial administrations preoccupied with planning for giant downtown projects, blind to outer borough needs, and ready to give lip service to community planning. Maybe the snoozing giant will wake up as elections approach next year, but among this crowd there seemed to be little faith that (if you’ll excuse the mixed zoological metaphors) the leopard will change its spots.
In the meantime, City Council member Bill Perkins, who introduced Mayor Johnson, announced that as chair of the Council’s Government Operations Committeehe would be holding hearings on community boards and community planning on Tuesday December 14, 2004. In his introduction, Perkins said that “there are those who think that since the community boards are just advisory we needn’t pay attention to them. I disagree….Maybe we have to make the boards more than advisory….Maybe we have to change the nature of community boards.”
Tom Angotti is Professor of Urban Affairs and Planning at Hunter College, City University of NY, editor of Progressive Planning Magazine, and a member of the Task Force on Community-based Planning.