There is no information on branding of the property – which is of special interest to those who follow Starwood Capital & Barry Sternlicht – so no word on if it will be a “Sternlicht inspired” hotel (eg – 1Hotel or Baccarat),or if it will be a Hyatt or other established brand. But they did have a picture, and some basic facts – 340,000 sq ft, 120 key 5-star hotel, and another 140,000 sqft of residential with hotel amenities.

It’s difficult to tell just by the appearance of the building – but it does show a few elements which could be unique – an outside pool deck area mid-building and a grassy/tree-filled terrace on the upper third of the building as well.

Starwood Capital’s Other NYC Hotel Projects

HotelNewsNow.com reported that Barry Sternlicht recently stated that he has three hotel projects currently on the drawing board in NYC: The Donnell/Tribeca Associates project mentioned above, the conversion of 1414 Ave of the Americas, and another unannounced project that he’s keeping close to the vest. Once again, there is no word or indication as to the brands of these hotels – will they be Starwood Capital brands, or will they be branded with other well established luxury brands?

I’m thinking that these projects will be some type of new or unique brand to Starwood Capital because typically they will not make a big deal in the press or market about “just another hotel transaction”. I’m sure we’ll find out one way or another over the next few months.

andrew@alconic-inc.com

I suggest anyone who is interested in Starwood Capital or Barry take a read at it.

Renaissance Man: As Starwood Capital Turns 20, Founder Barry Sternlicht Explores New Paths

Some quotes I found interesting

On Starwood’s investment in Hersha Hospitality Management:

The investment in Hersha Hospitality Management raises Starwood’s profile in hotel management. Its SH Group affilate manages the Baccarat brand and is developing four properties in the Middle East and four in China. Starwood’s investment in Hersha will help that company expand its management portfolio from about 80 properties today to as many as 200 in the next three to five years, Shah said. That growth will come from third-party management agreements, from hotels owned by Starwood funds and from managing hotels acquired by Hersha Hospitality Trust. In approaching such deals, Sternlicht takes the role of a visionary, who masters details without getting lost in them, Shah observed. “He’s a very demanding executive of his team as well as of his investors and his partners.”

On Starwood’s creation of Starwood Property Trust

Starwood Property Trust also marked Sternlicht’s return to the public markets after his departure from Starwood Hotels in 2005. In its mission, however, Starwood Property more closely resembles iStar Financial, the publicly traded investment banking firm that Sternlicht founded in 1998 and chaired until divesting Starwood’s interest in the company five years later.

I always knew that Starwood Property Trust was somewhat modeled on iStar Financial.

Lastly, it’s interesting to me that Sternlicht has some of the same interests as me:

The hotel business, meanwhile, had proven to be tailor-made for Sternlicht’s wide-ranging interests in capital markets, operations, marketing and design

andrew@alconic-inc.com

Here is Hilton’s Statement

In the lawsuit, originally filed in mid-2008, Starwood accused Hilton of stealing thousands of confidential documents and material which had information on how to create, brand and operate a boutique/lifestyle hotel brand. At the time, Hilton had wooed two Starwood Executives, and essentially their entire support staff and in a matter of months created the Denizen hotel brand. The support staff and executives had intimate knowledge of Starwood’s W hotel brand.

Starwood was sure to win this case from the beginning – starting with the drop shipment of thousands of propriary Starwood documents to Starwood’s corporate headquarters with a note from Hilton’s lawyers stating in essence “we found these in our possession, and thought they should be sent back to you”.

In the aftermath of the lawsuit, Hilton’s boutique/lifestyle brand – Denizen – was completely cancelled, and their entire luxury development team fired, it went right up to the top with Steve Goldman stepping down from Hilton.

The settlement between Starwood & Hilton has been detailed as containing the following three items

1. A moratorium on Hilton working on the development/planning/creation of any lifestyle brand until January 2013
2. A cash sum payment to Starwood, the amount of  which was not detailed
3. The supervision of Hilton by federally appointed monitors to ensure Hilton will be abiding by these rules.

In addition, it mentioned that the Federal Grand Jury investigation is still continuing and this settlement has nothing to do with that investigation. According to the Wall Street Journal, Hilton has been told it should not expect charges to be filed against it in the investigation; I think the settlement with Starwood should push that investigation to a close and will probably result in no action since Starwood seems to be satisfied with the results.

There was really no doubt in my mind that the case would end this way – it was just a matter of how long it would be until Hilton could develop a boutique/lifestyle brand, and how much Hilton would have to pay Starwood. I still wonder what it has done to the careers of Amar Lavlani and Ross Klein.. Are they ever to be employed by a major corporation again? It’s a sad story because I knew both of them, and have met them a few times, so I’m still a little suprised that they did what they did – but I think it comes down to this: money talks.

andrew@alconic-inc.com

Schrager also announced in the same press release that he was selling his interest in the Gramercy Park Hotel, which has been a great success – but not without unrest between him and partner Aby Rosen.

With Schrager Hotels, Schrager is looking to create two distinct hotel brands – as I mentioned in this post a little under two months ago. He’s looking to launch then in “24 hour cities” around the world, and has already placed bids on a number of properties in New York City, is currently proceeding with renovations on his purchase of Chicago’s Ambassador hotel and recently took a tour of the Chelsea Hotel in NYC, but deemed it not right for what he’s looking at. And by the way – I’ve never seen so much press coverage about a hotel developer taking a walking tour of a hotel in my life, are we that desperate for news lately?!

Schrager Hotels currently is still using the IanSchragerCompany.com domain name/website – typing in SchragerHotels.com just redirects to his primary website, which in itself has not been updated in years – it’s entry on edition hotels is still listed with the original press release, and doesn’t even refer to the brand by name yet (if you remember – the partnership was announced, but it was a few months before the name was chosen). Details about the 2 new brands are still difficult to come by. Today’s press release only stated that the new company will have

..one luxury lifestyle brand and one that will be reasonably priced. Both new brands will be rolled out in 24 international gateway cities around the world with the first opening in Chicago in 2011. (The Ambassador which should open in the Fall)

I’m curious to see where Schrager will take these new hotel brands and exactly how they will be positioned, will the reasonably priced brand be priced similar to Starwood’s Aloft? Or will it be priced similar to a Sheraton/Westin, yet have the W Hotel feel? I predict the luxury brand will easily be positioned within the same level as the Four Seasons, or Ritz-Carlton – yet have a boutiquey feel, pretty similar to his creations with Morgan’s Hotel Group. From the story in today’s WSJ about the launch, the hotels in the less expensive brand will have hundreds of rooms, leading to the possibility that they could be convention center hotels, a unique pairing which I dont believe has been done yet – “stylish hotel convention centers”.

I also saw mentioned today that he is looking into hotels that have been in major cities for 30-40 years and need loving touches to bring them up to par to standards that people expect when staying in a hotel.

One thing I do like – and it sets the tone of his company and brands is the logo. I’m always fascinated by the logos that companies choose to represent for their brands – the good brands will choose a logo that has more than one meaning – not just a graphical representation of the comapny’s name.. A good logo will also set the tone of the brand – be it classy, funky, elegant, modern, etc.. Schrager Hotels does both of that. Let me explain how.. The logo is clearly a “SH” with the H superimposed over the S – but it can also appear as though the H is made up of two I’s – standing for Ian. Additionally the font they used is a font which reminds me of the Gothic look – which is excatly what some of his past creations have shown in their designs, case in point: the Gramercy Park Hotel.

In my opinion, there are really only two people who really set the standard for whats “next” in hotels – Barry Sternlicht and Ian Schrager. It will be fun to watch this brand grow and become what Morgans Hotel Group could have been.

andrew@alconic-inc.com

Ever since I started this blog I’ve made posts here and there about Vernon Hill’s banking ventures – Commerce Bank/Metro Bank USA and then taking the Commerce Bank/Metro Bank concept overseas and I was really excited to see it launched in the UK. While reading a lot of news articles on the opening of the bank – from customers reactions, to “analyst” reactions, three  themes always become apparent and as I customer of the original Commerce Bank – and still to this day, a customer of TD Bank (Commerce Bank was bought out by TD Financial a few years back) thought it was worth explaining to those who are not that familiar with the UK Metro Bank brand/business model.

#1 Similarity to Commerce Bank

Looking at the interior pictures of Metro Bank UK, vs what I see – even today – in the Commerce Bank/TD Bank locations its like a mirror image. It’s almost eerie how everything from the wood paneling, the fabric designs on the chairs and even the carpeting is exactly the same. It’s clear that Hill and his wife’s design team are using the successful design ideas and essentially re-releasing it.. As they say – if it ain’t broke, don’t fix it!

#2 Low Savings Interest Rates vs the Overall Market
One of the biggest complaints – really, the only complaint – I’ve been seeing about the launch of the Metro Bank brand are interest rates that aren’t as competitive as other banks in London – which people think is odd, especially for a brand new banking brand which is trying to make a big push in a market that has seen little or no real competition in decades. One story even goes so far as to say in order for Metro Bank to succeed it needs to be “competitive in rates as well as customer service.”

I’ll tell you this: Metro Bank will probably never have the best rates in banking compared to their peers, probably a few tenths of a percent higher for mortgages, or lower for savings accounts – but that’s not what is going to bring in the customer. The customer service and the Commerce Bank concept is what will win the customer.

A major cloud over Commerce Bank’s head when it was being shopped around was what larger bank would have the stomach to purchase Commerce and keep it’s “convenience” features that cost so much (7-Day banking, etc), one reason that Commerce was able to get away with not following the industry with rates was because the customer benefited in other ways – which I’ll explain in a bit.

#3 The Metro Bank (Commerce Bank) Concept
Metro Bank was launched with the tag line of “Love Your Bank At Last” and has a 4-point Metro Bank Promise: 1) Surprise and Delight every customer 2) 7 Day Banking 3) No Stupid Bank Rules 4) Satisfaction Guaranteed.

There are a few things that to this day prevent me from leaving TD Bank, and those are the things that Vernon Hill pioneered through Commerce Bank and will further refine with UK Metro Bank ..

7-Day Banking and Extended Hours – I can bank on Sunday afternoon,  meaning, if I have a question on my account, I can walk in and see an account representative on a Sunday afternoon. Need a cashiers check? Same thing – no waiting for the next banking day. How about if I’m off on a holiday – Columbus Day, or Labor Day for example – great day to go to a bank right? TD Bank agrees – and that’s why there are lines in the drive-thrus and always a few people waiting on line to see a teller inside. What if I need to cash a check after work – say, 6PM? No problem. TD is open until 8PM, 5 days a week.

In case you haven’t realized – there are no other banks that are open that late – even on a Friday. In fact, Wachovia (soon to be Wells Fargo) closes every single day at 5PM – except for Friday, they are open until 6. Anyone who drives past a TD Bank can attest – there are always cars in the parking lot, no matter what time it is. It was always a running joke between my friends and I that they would rent cars and park them in the parking lot so they always look busy – nope.. Not true. They just always are busy.

7-Day Banking & Extended Hours isn’t just a gimmick, its a feature that TD Bank customers have become reliant on.. And it still amazes me that the other national banks in America haven’t caught on to it yet.

Free Coin Counting – When I was younger I’d save up my pennies, quarters, nickels and dimes. Once the container was overflowing, I’d spend a few days rolling coins, have to label the coins with my bank account number and then bring them to the bank. Sometimes I even had to make an appointment so they could count the coins over again. Commerce Bank thought to put a free coin counter in every single branch, then allow anyone – even those who don’t have an account with them – to bring in as many coins (loose, and mixed coins – they don’t have to be rolled or categorized by type) as they can and have them counted in a matter of seconds – or minutes if you really had that many. Its such a convenient, yet simple idea that has brought in thousands of customers.

No ATM Fees – If you use an ATM Card at a non- TD Bank ATM, TD Bank does not charge an ATM fee for using another banks ATM. Sure, the other bank may still charge you something but TD doesn’t tack on their own charge (but if you have over $2,500 in your account, TD will even refund the fee the other banks ATM charges). TD Bank is the only bank that I have come across  (except for credit unions and savings banks) that does not charge you to use another banks ATM. I have not seen one regional or national bank that has a policy similar to that for everyone from the lower-end customer who keeps an average balance of $50 in their account to the super high end client who keeps tens of thousands in ther account. No discrimination.

Instant Debit Cards - If you open an account at TD Bank, you walk out of there with a permanent working Visa debit card. No waiting 2 weeks like every other bank I’ve ever seen for the card to be printed and then mailed out to you. Have you ever lost your ATM card, or had to have it replaced due to fraud? No problem, call their 800 number, then find the closest branch – even if its in another state and not the branch you opened your account in – and within minutes you can walk out with a working permant Visa debit card. That’s ground breaking right there.

Metro Bank is going to blow the UK banking market away. The latest stats have UK Metro Bank reaching their 1st year goals in opening new accounts and capital in only 3 months – encouraging them to expand alot faster than they expected and reach their goal of 200-250 branches within the London metropolitan market.

Congratulations Vernon, you did it again, and I’m proud to say – I’m still a fan.

andrew@alconic-inc.com

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

Ever since that post went up, I hadn’t seen or heard anything about the new logo and everything has been status quo.

Today however, Hilton Worldwide just announced what is essentially a brand relaunch for DoubleTree. Not only is Hilton updating the logo but they are changing the brand name to ‘DoubleTree by Hilton’ – and with both changes I think they went too far.

Brand Name Change

The name change is similar to the naming scheme that Hilton uses for their brands outside of America. For example in Europe, Asia and Canada the DoubleTree, Hampton and Embassy Suites names are always followed with “By Hilton”. This may make sense for overseas customers who are more familiar with the Hilton brand name, yet do not easily associate Hilton Worldwide’s other brands as being a safe, clean hotel with similar quality standards as the Hilton name. At the least – it may raise the cachet of those other names by being associated with Hilton…

I don’t think that equates to the same feeling for hotel guests in America. Sure, the average hotel guest wouldn’t avoid DoubleTree because its now associated even more with the Hilton brand, I just think that in some cases it cheapens the already established brands of DoubleTree, Embassy Suites and Hampton Inn. A good brand is something that needs to resonate with the customer, make the customer feel good about frequenting the establishment; if they wanted to associate the brands closer to Hilton – why not just rebrand everything as a Hilton?

New Logo

Hilton’s choice of a brown color for a new logo absolutely floors me – (notwithstanding the fact that the new logo reminds me of the South Carolina symbol of a tree and moon). Why would a company whose name has the word tree in it portray a dead tree in their logo? Not only that, but green is the new black – green is the best subconscious reminder of eco-friendliness – brown on the other hand.. Well, that just makes me think of trees dying because of pollution and environmental waste.

Hilton Worldwide feels the new logo is “modern, and updated” and has “color palettes custom-designed for the brand”.

I say “blah”

Whats Next

This rebranding of DoubleTree is the first phase of a complete overhaul of the DoubleTree brand which apparently hasnt had any major changes since 1995. I think it’s also the first of some major changes that will appear thoughout Hilton Worldwide’s brands in America.. I can see Hampton Inn and Embassy Suites joining the rest of the Hilton Brands (Home2Suites, DoubleTree, Garden Inn, and Homewood Suites) joining in on the party and having “by Hilton” plastered all over the name.

It’s ashame, its almost as though Hilton doesn’t have enough faith that their individual brands can stand on their own without being closely associated with Hilton.

andrew@alconic-inc.com

New York Magazine scored a great interview with him, and ended up reminding me that it was Barnett’s Extell that sold the building that currently houses the W Times Square to Starwood Hotels in 2001.

This is the same building, located on 47th St, behind the Roxy Deli where Robert Earl originally planned to open the first Planet Hollywood Hotel (back in 1997) which was to be managed by Sheraton, at the time known as ITT-Sheraton before being purchased by Starwood Hotels. (And everyone thought that Sheraton managing the Planet Hollywood Las Vegas was out of left field).

The project languished without even getting off the ground for a number of years, with Gary Barnett finally taking ownership of the property, and building it out. Then right as it was about to open, the events of 9/11 occurred, the project was once again put on hold because travel essentially dropped. Gary Barnett ended up having Barry Sternlicht’s Starwood Hotels purchase the property and open it as one of W Hotel’s flagship properties.  The W Times Square is still owned by Starwood Hotels to this day.

I knew about this years ago and have been looking for information on it since then. Finally! My questions have been answered.

andrew@alconic-inc.com

Probably not, but it seems as though you will over the coming years. Oh yea, and Marketside is being developed as a new concept by Walmart.

Currently Marketside has four stores, each one around 20,000 sqft – a larger than your typical Walgreens or CVS drug store, but drastically smaller than the typical Wal-Mart or Target stores. Marketside is very similar to Tesco’s Fresh & Easy stores which are popping up all around California, Nevada and Arizona, and the concept even reminds me of a more “corporate” Trader Joes with its push on organic and natural food products. The Marketside branding doesn’t openly mention Walmart, but it isn’t trying to hide its affiliation with Walmart either – just checking on Marketside’s website shows a “Copyright Walmart Stores” at the bottom of every page.

(Here is a video of Marketside from YouTube)

It’s a great concept and I love the idea of being able to create a new stand-alone brand that fulfills a need

Crain’s New York Business today published an article from the Associated Press signifying Wal-Marts intention to expand in urban areas by growing it’s Marketside brand:

Wal-Mart Stores Inc. is planning an aggressive push into urban markets with a new small format that’s a fraction of the size of its supercenters.

The expansion, expected to be spelled out next month at the retailer’s meeting with analysts at its headquarters in Bentonville, Ark., is aimed to pump up sluggish U.S. sales.

Real estate executives said that over this past summer, the world’s largest retailer has been scouring for small locations, around 20,000 square feet, in urban areas including New York City, San Francisco and other cities. That size is larger than a typical drugstore but smaller than a supermarket.

WalMart has been trying to make inroads to urban areas – especially the New York City market – for years, but has constantly been rebuffed by both high property prices and opposition from citizen groups who are afraid Walmart will do more harm than good in their neighborhood.

Opening up these smaller stores may bring an increase in sales, but it’s interesting to see Walmart take their growth in this direction. Ever since they started, Walmart was the place to buy everything, hence the superstores of +100k square feet, an expansion into groceries has quickly given them the title to Americas largest grocery store – but people still go to Walmart primarily for things such as clothes, furniture, dvds, household goods etc.

Opening up Marketside stores in urban areas such as NYC will do nothing to quell the demand for a typical Walmart, (nor will it make it easier to open their Supercenters) but if they are able to keep grocery prices lower than the competition in these metro areas, it will quickly spell the end to more established (and overpriced) names such as Gristedes and Food Emporium which have dotted the urban NYC landscape for decades.  I can picture the backlash now: Walmart’s little child pushing out the established players – essentially the same opposition that Walmart has been facing for years with their Supercenters, except now instead of having a Supercenter put an entire downtown out of business, it will put out the grocery stores that have never seen competition like this before.

Walmart is a double-edged sword, bringing benefits to customers, sometimes at the expense of the employees, suppliers and everyone else down the supply line..

Economists have tried to answer the question for years – is Walmart good or bad for the economy and for America as a whole – now Marketside will only add to the question.

andrew@alconic-inc.com

To amend and restate the Certificate of Incorporation of the Company to change the name of the Company from “MGM MIRAGE” to “MGM Resorts International” 

This change, if approved (and it most likely will) will take effect immediately – in fact MGM Mirage already has the new domain name up and running – just redirecting to their current site. (http://www.mgmresortsinternational.com) 

As companies grow and evolve over the years – its sometimes necessary for them to change their name to better reflect the direction they are heading in. Some examples which come to mind are Apple Computer changing to Apple, Inc. in January 2007, or who could forget Radio Shack’s corporate name from 1963 until May 2000 - Tandy Corporation. 

There has been some speculation that the reason MGM is dropping the Mirage name is to distance itself from Steve Wynn, who sold Mirage Resorts to MGM Grand, but that sounds too much like a conspiracy theory when it looks like all MGM is trying to do is better reflect their growing stable of businesses and international footprint. 

When MGM Grand, Inc and Mirage Resorts, Inc first merged, each property contained gambling, and was located within the Continental US. Now, MGM-MIRAGE now has a number of non-gambling properties in the planning stages, and they’ve also started to franchise some of their brands through MGM-MIRAGE Hospitality. Plus their footprint now reaches beyond the shores of America from Dubai, to Vietnam and Macau. 

An example of the MGM brands being franchised can be found in the Dubai Pearl development, where they are constructing Bellagio Residences and Hotel, MGM Grand Hote and a Skyloft Hotel (based upon the Skylofts at MGM Grand in Las Vegas.) Two brands that MGM-MIRAGE Hospitality has not really provided details on is their mx and emblem brands which were mentioned in a profile done by Hotels Magazine back in 2008, but that magazine has since shut down their website. 

While I’m sure the brand recognition will help fill these hotel-only resort properties, I think it will be interesting to see how people will respond to going into an MGM Grand w/o being able to gamble. 

andrew@alconic-inc.com