This is exciting because there will finally be some action on what is one of the few remaining wholly owned hotel properties by Starwood Hotels. (Starwood has been ridding themselves of owned properties and focusing on franchising and management). The original plans from 2007 called for an Element, Aloft and a Four Points hotel to be built on the property. It was thought that the Westin would be converted to an Element, the Clarion would be torn down and replaced with an Aloft and the Four Points. In that time frame we’ve seen the Westin stay as-is and the Clarion renew their franchise agreement. Starting on July 26th, 2011, the Clarion property will permanently close and construction will commence a few weeks later for a complete renovation and conversion into an Aloft hotel, without tearing down the building and starting from scratch.

And that’s only the first phase of the project:

I found a story in the San Mateo Daily Journal which details that the second phase will consist of a 160 room Element hotel on the property next to the aloft. The Daily Journal article also shed some light into Starwood’s original 2007 plans for the property; the Clarion was to be torn down and replaced by three hotels – an Element, Aloft and Four Points, leaving the Westin alone.

Not only that but in the Millbrae, CA Planning Commission’s Meeting Minutes are extensive discussions about the size of the signs for both an Aloft and Element.

So how will Starwood fit two hotels into a piece of land that currently holds one hotel? The Clarion included banquet hall space, and had a very large backyard/pool area. I can see the banquet space and perhaps even part of the existing hotel near the main entrance getting demolished and the pool/outside area to be shared by the Element and Aloft – much like Starwood’s Aloft & Element in Lexington, MA.

It’s good to see Starwood making an investment into this property. The Clarion has been needing some TLC for awhile now, and Starwood has been itching to make this another prime property of what their concepts are capable of.

andrew@alconic-inc.com

One thing that drives me crazy though is being at the scene of the event and taking away a completely different picture of the event than is reported in the media (I’ve experienced this NUMEROUS times with my local home town newspaper) and what amazes me is how often the media takes things out of context, or instead of following the straight road makes a sharp left (not politically ”left”).

A perfect example of this is the recent news of Ivanka Trump’s “interest” in purchasing/developing Rat Island in NYC.

Most people have never heard of Rat Island – and for a good reason, its a two-acre (I think thats being generous) rock formation that juts out of the water on the Long Island Sound, east of Pelham Bay.

Here’s a Google Map of the location:

View Larger Map

It has no power, water, nor even a dock to tie your boat up too. Lastly, in high tide most of it is underwater – if there is a storm, it’s completely underwater.

But back to my story:

Of all news organizations, the Wall Street Journal is not one I would expect to hop on this bandwagon, but last week, in an article in the Metropolis section, “A blog of reporting and news from New York City” they did just that. Now, granted, it’s not the Print Version, but this story did make the frontpage of WSJ.com which is how I found out about it.

The story says:

Talk turned to pungently named 2.5-acre piece of land, “off the coast of the Bronx,” according to a real estate listing, going up for auction October 2. Trump was not too familar with Rat Island before this reporter explained it. (“I first thought you meant Necker Island,” she said. “Richard Branson’s.”)

“Rat Island sounds really interesting,” she said, when we asked whether she’d buy it and develop it under the Trump banner. “But there’s not a lot that’s undiscovered in the tri-state area. So when there is, there’s usually a reason why it’s undiscovered.”

She stated she never heard of it before, thought the island sounded “interesting” (who wouldn’t think that – a 2 acre island for sale in the middle of the Long Island Sound?!), but then stated – if there is an undiscovered area, there must be a reason its “undiscovered” in other words – she is smart and realizes that there must be something wrong with it if there is no development on it.

And she is exactly 100% right.

But the media had a field day! If you just read the headlines you’d think she found the greatest site for the next Trump project, or was seriously considering it for a future project:

Is Ivanka Trump A Buyer for NYC’s Rat Island? – Private Island News

Ivanka Trump Mulls Rat Island Purchase – The Real Deal

Trump on Rat Island? – Metro NYC

Obviously no true “news of record” wrote an article about it (except, well.. The Wall Street Journal), in fact the NY Times, and CBS New York wrote about the island, but didn’t mention anything about Ivanka, but it’s still worth mentioning how the smallest bit of news – even if it isn’t news, can easily be taken out of context and made into something that is “newsworthy”, without even checking the facts, or taking a step or two back and thinking about what the story is actually about.

andrew@alconic-inc.com

It’s a great move for Parkway Corp – the current owner of the land who operates a public parking lot on the site now. Previously the W Philadelphia was to be built by a company called Urban Residential (ironically, they still have the project listed on their website) “on land controlled by Parkway Corporation” in other words, Urban Residential was going to be operating the W on a land lease, with Parkway still owning the land. Now, with the Home2 Suites, Parkway Corporation will stand to make more money as they will be the owner of the hotel, instead of just a landlord.

Back in 2008 I spoke to Stephen Starr, owner of Starr Restaurants, who was supposed to open a restaurant in the W Philadelphia; at the time he told me he hadn’t heard from the W people in months and thought the project was dead – but no official word was ever made as to the status of the W Hotel project. Eventually it was assumed to be a cancelled project, but there was always hope that another developer may come along and build the W as planned.

Let’s do a comparison between the two projects:

W Hotel Philadelphia (2006)	vs	Home2 Suites (2011)
29	Stories	8
250	Rooms	246 (all suites w/ kitchens)
95	Residences	0
11,000 sq ft	Meeting Space	2,000 sq ft
Bliss Spa	Spa/Fitness Center	Pool/Fitness Center
?	Parking Garage	860 Spaces
$150,000,000	Estimated Construction Cost	$60,000,000

I have no doubt that this project will be built and will be opened as planned in summer 2013 – smaller projects, vs high end boutique projects are being built at a much faster rate in the current economy, plus its location – directly across from the Philadelphia Convention Center is a great location for an extended stay hotel.

andrew@alconic-inc.com

Yep.

A kitchen vent.

Makes sense though, Conde Nast is famous for their cafeteria, much has been written about it, the food is excellent, the patrons are the creme de la creme of the publishing world and the architecture and design of the place is out of this world. Plus, since this vent will also be used for Conde Nast’s test kitchens as well as the cafeteria, it’s big – one story high and 25 feet wide.

I had heard a quick blurb about the vents being a potential deal breaker, but the NY Post had a great story on it recently which shed some more light on the issue.

Not to worry, the vent won’t appear as an eyesore similar to the vents on the side of the Borgata in Atlantic City, or the Goldman Sachs Tower in Jersey City – this vent is costing $1 million, including specially designed glass panels which help to disguise it’s appearance. From how the article sounds, it’s going to be difficult to tell its even there unless you know what you’re looking at, and it’s going to be on the North Side, not the Southern Side which faces the WTC Memorial and the rest of Ground Zero.

Just goes to show how what may seem to be the most inconsequential item on a tenant build-out can end up being a major deal breaker.

andrew@alconic-inc.com

Not the least, it’s exterior design has been derided since its beginning due to its colors and appearance as someone drives down the Turnpike.

Triple 5, the same company that owns the worlds two largest malls – Mall of America and West Edmunton Mall in Canada – is committing $1 billion dollars to finish the project – and even expand it. I have to say, if there is a company that has the experience and ability to do this, its Triple 5.

Triple 5′s intentions are to use the additional parcels of land adjoining the property that was once to be used to create hotels and office buildings to build an indoor water park, a second parking garage, a skating rink and “other entertainment features that have proven successful at the companies other properties”. If the Mall of America is an example – an indoor water park branded by Nickeloden called Nickeloden Universe, a movie theatre and perhaps an aquarium and an indoor mini golf range.

The NY Times broke the news yesterday and quoted a number of people who have their doubts about the project. I think they couldn’t be anything but wrong – they have New York City only 20 minutes away, a train station literally feet away that has an almost direct ride from Manhattan, and a football stadium which is home to two of the most popular NFL teams – the NY Giants & Jets. With the right management and the monetary backing, I cannot see this project being anything but successful.

Triple 5 is also going to rename the project – American Dream @ The Meadowlands, which is great because it gets rid of the Xanadu name which was really horrible to start with.

One aspect that Triple 5 is also due to change is the exterior of the building. Everyone has stated that the exterior colors is such an eyesore for the project and will actually scare people away. It amazes me that people find the exterior ugly compared to a typical mall or large building which is nothing but huge flat walls with one monotone color throughout. One of the necessary evils of a building like this is a small amount of windows since malls don’t have windows, it’s not an office building or a hotel. No one goes in to look out. I will admit though, the drab wilderness of the Meadowlands that surround the property on one side completely conflict with the colors and design of the building as it stands now. I’m very curious as to what they will come up with as a new design.

With the signing of the agreement, Triple 5 has until the end of this year to close on the transaction, and I think they will be able to do it. And hopefully prove the naysayers wrong.

andrew@alconic-inc.com

Today, according to a press release from Orient-Express, it isn’t Starwood Hotels – but Starwood Capital which is taking over development of the project into a “World-Class Hotel”. So it is still possible it may be a Starwood Hotels branded hotel, I’m crossing my fingers it may be something from Starwood Capital’s hotel portfolio instead.

The press release states that Starwood Capital & Tribeca Associates

..will assume all the terms and obligations of the original contract made between Orient-Express Hotels and the New York Public Library, including the reimbursement of all previous payments made by Orient-Express Hotels and the assumption of all future payments.

After some research into the original announcement and development proposal by Orient-Express back in 2007, the project was described as this:

The five-story building on West 53rd Street will be razed to make way for an 11-story hotel, but the library will own and occupy space on the first floor and underground under the terms of the deal, the two sides said. Five floors of the hotel will connect to the “21” Club on 52nd Street, also owned by Orient-Express.

With:

150 rooms costing $750 to $2,000 per night and a restaurant on the top floor.

The hotel was originally going to be called “21″ based on Orient-Express’s “21 Club” but with the new ownership group, its doubtful it will be a 21, although there still is a chance it may connect to the 21 Club.

I’m eager to see what Starwood Capital chooses to brand this site, as well as a their other recent purchase of 1414 Ave of the Americas only 5 blocks North.

andrew@alconic-inc.com

This is pretty interesting because it’s the first time that a hotel is being based on a “restaurant experience”. In fact, I cant even think of a restaurant within a boutique hotel that considers itself based on the hotel brand – although Jose Andres’ Bazaar at the SLS Hotel in LA seems to be pretty close.

This is a different approach for the Caesars brand and Caesars Entertainment as well since I cannot think of another instance where they have a different hotel brand within one of their properties other than the casino branded hotel. On the other end of the spectrum is MGM Resorts, Caesars Entertainment’s biggest competitor which has been building these sub-brands within their properties for years.

As an example, look at the Mandalay Bay which has both a Four Seasons Hotel and “THE hotel” in addition to a more basic Mandalay Bay hotel stay.. MGM Grand has “The Mansion” (a super exclusive hotel brand connected to the property, but deeply hidden, it isn’t bookable by the general public either – you need to be a high roller and invited to stay there), SkyLofts and a much, much smaller sub-brand – Signature by MGM Grand.

Anyone who is familiar with Caesars will applaud this decision because the Centurion Tower has been underwhelming for years, rightly so as it was the first tower to open in 1970 and has started to show its age. What’s interesting is how it was decided to renovate the Centurion Tower vs completing the Octavis Tower which was left unfinished after the recent recession. (The building looks finished from the outside, but is empty on the inside.)

The plan is to create a completely separate experience for the Nobu Hotel, with its own entrance and check-in desk instead of combining it with the rest of the Caesars property as is done now. Overall, this is a great idea and probably a win-win for both parties – Caesars & Nobu Hospitality, as encourages a new crowd to come to the Caesars Resort in Vegas, launches a new hotel brand without requiring as large of a capital outlay and lastly allows Caesars Entertainment to dip its waters in a new concept which can easily be replicated in their Atlantic City Casinos such as Bally’s and Caesars.

andrew@alconic-inc.com

Morgan Stanley — after failing to raise money for Revel last month — is launching a new $1.15 billion debt offering so Revel can finish construction, sources said, confirming a Standard & Poor’s LCD report.

The bank, which has hired JPMorgan to sell the loans, meets potential investors today.

Christie’s motivation seems to be based on the need for more jobs in NJ. What Christie seems to be ignoring is the fact that Atlantic City is losing a lot of visitors to Philadelphia and other out-of-state casinos.

One thing that will help projects like Revel and the Borgata is it’s focus on more than just gambling.. Atlantic City’s “Super casinos” such as Borgata, Revel and even Harrah’s and the Tropicana are able to tap not just the gambling public by having restaurants branded by celebrity chefs, popular nightclub venues, and headlining acts that cater more toward the younger set vs the platinum set.

No matter what, the finishing of Revel will give Atlantic City a big morale boost, and when its finished – bring in more visitors eager to see this new casino who will trickle out to the other casinos in town.

andrew@alconic-inc.com

I have to say, it’s hard to believe that this day actually came – almost a year later than it was originally supposed to open under the original developer Bruce Eichner, and 5 years after the project had its groundbreaking. In fact, a lot of people thought it would never open at all. It’s interesting to note that the Cosmopolitans neighbor – MGM’s CityCenter – took less time and is much, much much bigger.

I wanted to share some sidenotes about the Cosmopolitan and it’s development that seem to have been lost in the shuffle of it’s grand opening today..

-Unlike the original plans, condos will only be in the West Tower (the West Tower is the one not on the Las Vegas Strip), originally the condos were to be split between the two towers and intermixed with hotel rooms.

-There are about 2,000 condos available for sale still, only 214 are under contract – possibly to close on Jan 1st. (via LV Review Journal)

-Bruce Eichner, the original developer of the Cosmopolitan, is already off onto another project – just like he said he would be in the WSJ article I posted to in my first Cosmopolitan Las Vegas post. He is looking to finish the troubled One Madison Park highrise right on NYC’s Madison Square Park, an absolutely beautiful building which is going through the same troubles that the Cosmopolitan once went through – at least this time he’s trying to be the savior instead of looking for one.

-The interiors of the Cosmopolitan were designed by David Rockwell and the Rockwell Group – he’s the same person who created Starwood’s aLoft interiors, and a favorite restaurant of mine which is a little closer to home – Bobbys Burger Palace. Apparently Bruce’s original interior elements contained 20-ft high dancing robots, which to me would be just ridiculous.

-The Cosmopolitan project is still owned by Deutsche Bank, and Deutsche intends to make the project a long term investment and play an active role in its management. Out of all the other major Vegas/Atlantic City casino projects, Deutsche is the only one who actually stuck to it’s guns and finished the project in this economy. They get kudos in my book for that. Recently, Morgan Stanley let it be known via an SEC filing that they would let their Revel Atlantic City project essentially sit vacant and unfinished for years until the economy bounces back since they have been unable to find a buyer. That’s even after Morgan Stanley was willing to take no money for the project until the investor made a 20% return on their investment of at least $1.2 billion to finish and open the development.  The Fountainebleu in Vegas, which is over 70% finished – a lot of rooms were completely furnished – was purchased for only $150 million by Carl Icahn, leaving the lenders with almost a $1 billion loss.. Wow.. I think that in 5 to 10 years Deutsche Bank is going to look great by finishing this project and not selling it for a song. This economy is tough though, and if you don’t have the capital, well – you’re hands are tied. Deutsche Bank is a large, worldwide company, but they are still almost have the size of JP Morgan Chase & Bank of America by assets.

-Ok, I have to make one mention of the interior of the hotel which has been bugging me until today.. You know those 8 pillars in the lobby (if you’ve seen pictures or video of the lobby, you’ll know what I mean) are full video walls on all four sides, floor to ceiling, no projection screens, no 3D images, no LED walls, they are full motion video screens. Wow.

Best of luck to the Cosmopolitan! Only 40 more minutes until the first bet is placed.

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