Content area
Full Text
LIKE MANY OF New York's most beloved landmark buildings, the sleek, black Millenium Hilton hotel, which rises 58 stories between the World Trade Center and historic St. Paul's Chapel, is a monument to the pride of its developer and the folly of its investors. But while the initial backers often take a thrashing when a property like the Millenium is created, the city itself often wins.
"I think we did a great job," said Peter Kalikow, the developer of the four-star hotel. The Millenium, which opened in September, 1992, gave the city a much-needed oasis for business travelers who were visiting Wall Street firms.
But Kalikow spent far too much of his and his lenders' money on the slender tower - some $200 million. That's more than $350,000 for each of the Millenium's 561 rooms and more than twice what current revenues can support. The debt helped sink Kalikow, 51, into bankruptcy. He lost control of the Millenium to his lenders, who sold the hotel to a company controlled by the billionaire Kwek family of Singapore.
"They stole it," Kalikow said of Kwek's CDL Hotels International, which agreed to a price of $75 million in February. To no avail, Kalikow had tried to convince the bankers the Millenium would soon be worth more. "I begged them not to sell."
Kalikow's pain, however, is largely the city's gain. Indeed, his beloved Millenium is but one of several hotel jewels added to the Manhattan skyline since the mid-1980s. This new constellation of hotels has helped the city attract tourists and satisfy business travelers. But just like the Waldorf-Astoria, the Chrysler Building and the Empire State Building, these new properties are unlikely to ever earn a dime for their early investors.
The Millenium, Macklowe, Four Seasons and other properties have gone through painful management and financial restructurings that have knocked down their values to levels that more closely reflect what they can actually earn rather than what they cost to build. Those wrenching changes should help them make money and keep their doors open and their flowers fresh.
The new Four Seasons on 57th Street - built at a cost estimated at $1 million a room - recently hosted a gaggle of show biz celebs in town...