Crain’s New York Business: A century-old Midtown hotel is coming back from the dead
By NATALIE SACHMECHI
Updated October 25, 2021 2:57 PM
The Omni Berkshire Place, a 399-room Midtown hotel that opened in 1926—it’s where Alfred Hitchcock was once a regular and Rodgers and Hammerstein wrote Oklahoma!—is getting a new lease on life.
The owner, billionaire Robert Rowling’s TRT Holdings, which closed it ostensibly for good last year, plans to welcome guests back Nov. 1, the deadline to reopen a hotel before it’s required to start making severance payments to laid-off staff under a city law passed this month.
Under the legislation, which members of the hospitality industry are challenging in court, any hotel that does not reopen to the public by that date with at least 25% of its workforce will have to pay staff members $500 per week in severance for 30 weeks from Nov. 1.
“Our strategy was to lose less, so what do we do?” said Peter Strebel, president of Dallas-based Omni Hotels & Resorts, which is owned by TRT. “Paying the severance would have cost more than reopening.”
The hotel, which shuttered in June last year, currently costs $6 million per year to operate closed, including mortgage and property tax payments, Strebel said. No money is coming in, he said, but with tourism in the city picking up, the hotel might be able to break even.
The hotel would have reopened eventually given rising occupancy rates in hotels around the city, he said.
A handful of other hotels that are currently closed, including the 1,300-room Grand Hyatt near Grand Central, are preparing to reopen by Nov. 1 with limited staff, to avoid paying severance payments to former staff.
The law provides an exception for hotels that have closed permanently and are being converted to another use such as offices or multifamily housing, but Omni did not want to go in that direction or sell the building, Strebel said.
“We had many calls and offers,” he said, “but it wasn’t the time.”
Advocates of the law, including the New York Hotel Trades Council, applauded its passage for giving thousands of hotel workers their jobs back.
“Immediately after the passage of the hotel workers severance legislation we saw some of the city’s biggest hotels announce they’re reopening and recalling workers and it’s great to see the Omni continue the trend,” union President Rich Maroko said.
But industry leaders slammed the law, claiming it will do more harm to struggling hotels.
“We’re disappointed that the city chose to risk future tourism and our local economy by passing this legislation, which forces hotels to pay money they do not have,” said Vijay Dandapani, president and CEO of the Hotel Association of New York City. “Ultimately, this bill may force owners to close and leave New York altogether.”
The trade group sued the city this month in U.S. District Court in Manhattan to get an injunction against enforcement of the law.