Today, she posted a story giving some details – not too many though – in fact many details aren’t even set in stone by Schrager himself.. But in a nutshell, he’s looking to create two new hotel brands, kinda like Morgans Hotel Group Pt II; a high end brand, and a low end brand.

Not surprisingly, the article states that neither of the brands will be considered competition to the Edition brand – but surprisingly he considers Edition a mid-tier hotel brand, whereas I always considered it pretty high-end luxury.

In fact, he states:

How would this compare to an Edition hotel, if hypothetically, one were to open in the same city? In the case the Ambassador East hotel, it would be the cheaper of the two, he said.

The first hotel will be the former Ambassador East in Chicago which Schrager purchased in April of this year with the intention of gutting it and putting his own name on it, instead of Edition as most expected.

Schrager’s idea of low priced boutique hotel may still be out most people’s budget, personally, I think low-priced boutique hotels would be in the range of $150-200, but Schrager is expecting the Ambassador East to average $225 a night.

The article also goes to mention that the company will grow slowly and look to purchase older, worn out hotels that haven’t been put to their full use in years. (I can think of one hotel which would be a great purchase – the Berkeley Carteret in Asbury Park – that would fit that criteria to the T).

Schrager isn’t out to re-prove himself, he’s done it already, I think he wants to create these brands, and these properties because he wants to and he feels there is a need to be filled. I think if Schrager can make a boutique brand at a low price point, it will really turn the boutique hotel industry on its head.

Going back to the comment about purchasing older, worn out hotels; I can almost picture it now: Ian Schrager as the Statue of Liberty “give me your tired, your poor……”

andrew@alconic-inc.com

Post Card Inn on the Beach is a unique hotel located in St. Pete’s Beach, FL (not St. Petersburg) in what used to be an old TravelLodge. Starwood Capital had purchased the property a number of years ago to build a high end luxury hotel (1 Hotel?) but the town wouldn’t approve it mainly due to the building height they were asking to build.

Since then, Steve Hanson, the President of B.R. Guest Restaurants suggested to Barry Sternlicht to open a smaller hotel on the property – utilizing the existing building, and doing a major cosmetic renovation. The result is the Post Card Inn at the Beach, featuring a WildWood BBQ & Grill Restaurant (the second WWBG in the B.R. Guest Empire) and a hotel which has a very laid back, beach theme – with a price point at about $149 a night. It’s not Super 8 prices – but its not Westin/Hilton at destination location prices either.

Even though B.R. Guest is owned by Starwood Capital – Post Card Inn is mainly a B.R. Guest operation. Steve Hanson created The James hotel in Scottsdale, AZ in 2004, and begun work on its sister property The James Hotel in Chicago. He’s no longer affiliated with The James – of which the Scottsdale one was purchased by Morgans Hotel Group and has been converted into the Mondarian Scottsdale.

Where the Post Card Inn will go from here isn’t really known; Sternlicht inferred in his interview that the Post Card Inn will be a brand, and the press release has inferred that as well. I’m just not sure that you can really replicate a hotel like this (surfing-type) easily in multiple locations – especially within the United States where the ocean can’t be reached for hours. Then again – a brand doesn’t have to mean hundreds of hotels – it could be simply a few locations in towns by the beach up and down the East and West Coast.

With someone like Barry Sternlicht and Starwood Capital involved behind the scenes – crazier things have happened..

andrew@alconic-inc.com

In July Morgan’s announced that they were not going to proceed with the development of the hotels because they were having difficulty getting financing, then, a day or two later, Boyd Gaming announced that the entire Echelon Resorts project would be put on hold primarily due to Boyd’s anticipated difficulty in getting future financing to finish the project.

At the time, it was left open ended if Morgans would ever finish building those two hotels – even after Echelon starts construction again, personally, I always thought that once Echelon’s development starts again, Morgans would continue to build as originally planned. Morgans would be very silly to throw everything they have worked on thus far down the drain – especially since they are trying to build their presence in Las Vegas.

Today Morgans announced that they were able to change their joint venture agreement with Boyd in regards to the Delano and Mondrian at the Echelon project, essentially Boyd’s gave Morgans until late 2009 to line up financing.

This gives two huge hints as to whats to come:

1. Morgans is still a major part of the project. The only major change is the ownership – the new agreement allows Boyd’s or Morgans to step back from the 50/50 ownership interest they currently have, this has nothing to do with the management.. In other words – Morgans may not own the project, but it will still be built and managed by them.

2. Echelon is still shooting for a late 2009 or early 2010 date to begin construction again, and Boyd is still committed to finishing the entire Echelon project.

Also, as a side note, I just took a look at the Echelon project’s webcam, and it looks as though all the cranes are still on site and setup. It’s been about two months since the project was initially shut down – I’d have expected the cranes to be packed up by this time right? I don’t think it would be too much of a guess to think that Boyd is expecting to start up construction even sooner than late-2009, if not – why would they keep all the expensive cranes still on site?

andrew@alconic-inc.com

Anyway, I thought it would be a good idea to mention how The Chelsea is open and allowing guests to stay overnight (in fact, it has been since July 3rd) but the hotel will not be completely opened until August 1st.

Last Friday was the ribbon cutting, and also an opportunity for the public to get a tour of the hotel – pretty unique actually. I’m not too familiar with other hotel’s allowing the general public to come in for tours – or at least partially intending the tour patrons to be just general public people. It’s great that they are doing that since it really shows that Curtis Bashaw and his Cape Advisors group cares about the general public and isnt trying to make the hotel into something that’s too big for its britches.

I also have to congratulate the hotel on pretty much getting the opening done on time. As long as they make the August 1st opening date for the complete facility – they’ve hit their target. Last year initially the hotel was supposed to open by Memorial Day, but with some construction delays due to the condition of the former Howard Johnsons the opening was pushed back. Then, they decided to have a soft opening, where some rooms were put on line while others were still being constructed, and then finally – the full hotel opening on August 1st – that to me is how you do a hotel opening.

It’s kinda amazing to watch Cape Advisors do their opening vs how the Thompson Hotels does their openings – Thompson is famous for constantly delaying their openings, even to the extent that some employees think its opening one day, others think its opening another – and then the website saying something completely different! Not only that, but Thompson has a tendency to take a LOOONNNGG time to develop their hotels – the Thompson LES I believe took almost three years to build – and its still not even open yet. (July 29th is their 3rd attempt at an opening date this month alone) Now this isn’t some huge major hotel – its like 20 stories high.. Ridiculous.

Anyway, I’ll be at The Chelsea for their real opening day – August 1st, and I’ll have a report back here as to my thoughts of the facility.. From what i saw a few months ago with the hard hat tour – it should be everything that it’s been said to be – and more.

Now – the question comes to mind.. What’s next for Curtis Bashaw and his company? The Mondrian SoHo is one, Second? A new casino project to the south of the Hilton Atlantic City, and lastly – I think its a very good possibility that they are one of the parties interested in purchasing the Tropicana.

We’ll see!

andrew@alconic-inc.com

Perhaps this will be the beginning of the growth of the Morgans Hotel Group?

Morgan’s is uniquely able to lay claim to creating the first boutique hotel – but after almost 22 years, they still have only 10 hotels throughout the world, younger upstarts such as W Hotels, has almost triple the number of locations in a quarter of the time. Ever since Ian Schrager left Morgans, it seems as though the company has had difficulty getting back up on its feet in the development arena – not that the existing hotels have been suffering (they have become even more popular!) but the growth of the company just was not there. In the past few years the only things that have come out of Morgans are it’s ex-CEO’s infamous firing, purchase of the Hard Rock Casino in Las Vegas & the creation of the “Mondrian” brand, which Morgan’s seems to want to turn into its own chain – yet I don’t understand what makes all Mondrian’s alike vs Clift & Royalton.. Each and every Morgan’s hotel is designed differently from top to bottom, whereas if Morgans is trying to make Mondrian in to a brand, what will the brand be “known” for?

In any case, its great to see something happening with the Morgan’s development pipeline..

What is interesting about this is it’s one of the first projects that Morgan’s has undertaken with a major development partner being named first and foremost, in most of Morgan’s other projects, it has a majority interest in the hotel, whereas the Ames Hotel will only be 35% owned by Morgans – the reminder will be split between Ames Hotel Partners & Normandy Real Estate Partners.

An interesting fact in this whole thing is Normandy Real Estate Partners. Normandy is also a partner in The Chelsea hotel that is being built in Atlantic City by Cape Advisors, not only that – but Cape Advisors is also involved in building the Mondrian SoHo with Morgans Hotel Group. In otherwords, I’m a little surprised that Cape Advisor’s isn’t involved in the Ames Hotel since they have worked (or are working with) both Morgans & Normandy Real Estate. That doesn’t mean that every deal Morgans or Normandy is involved in requires them to bring in Cape Advisors, I just thought it was a little ironic.

I’m very interested to see what the Ames Hotel will turn out to be like – it’s the first hotel that Morgans has created from scratch that is not a Mondrian since Ian Schrager left the company. There have been plenty of rumors, and plenty of plans for additional Morgan’s hotels – mainly brand extensions of existing properties – the Delano & Mondrian in Las Vegas, Mondrian in South Beach & NYC. Call me crazy but it seems as though Morgan’s had such a great thing going by creating different hotel names – why not keep that up?

Hopefully the Ames will not get the bad reviews that the Royalton has been receiving since it was recently renovated, and as has been quoted in the news release – it will keep the same “avant garde” design as all existing Morgan’s Hotels have become famous for.

andrew@alconic-inc.com