An Interview With Ian Schrager

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L.G.: Right. Are you in your penthouse [at 40 Bond] yet?

I.S.: I really didn't have any time to devote to it. I'm working on it now. It will be another year and a half. I'm making an effort that I've never made before where I've lived, you know. But I'm making that effort now to do something very special.

L.G.: Really, you haven't made that effort before? That's surprising.

I.S.: Well, you see, with a lot of architects and interior designers—not that I am one—the effort goes into the projects, not their homes. They don't have any time for their own individual thing. Some of them use it as work—to see what works and doesn't work—but I didn't. Everything I have—every bit of energy, every bit of passion—went into the projects. None of that ever went into my own private residence.

L.G.: What do you want to do with it? I saw you quoted somewhere saying it's the largest one bedroom in New York. It's 8,500 square feet plus 4,000 square feet of terrace space.

I.S.: You know, just a one-off custom-made kind of home with a new palette, kind of finish it in details and jettisoning the traditional notions of living—living room, parlors, things like that—and just doing something the way I currently live.

L.G.: And would you expect to stay there for a good long time?

I.S.: Hopefully.

L.G.: So tell me—we have the oil prices going sky high, we have a credit crunch, trouble on Wall Street—how is all that affecting your business?

I.S.: We have very a distinct product, which is an edge, but as long as the dollar stays where it is, people in Europe are buying at a 30 and 40 percent discount. So the market has continued to be strong in the high end. If the market—if the value of the dollar—really changed, I don't know. It may be keeping the country afloat, by the way, but I'm not an economist. What is troubling to me is, I'm starting to see ominous signs in the media, you know—the Federal Reserve thing, the economy's going to get worse, retail sales not good, the banks, the Blackstone Group thing [the private equity firm's disappointing third quarter earnings report]. It said in the papers that the mess from the subprime market is even worse and it's real tough out there with capitalizing and financing new deals. So I'm just instinctively, not analytically, but instinctively, feeling that we're heading into a correction.

L.G.: Do you think that if today you went through the crucible you went through in 2003 [when Schrager, then running the Morgans Hotel Group, the company he founded, was grappling with a mountain of debt for various highly leveraged, underperforming hotel properties and he was forced to seek bankruptcy protection for the Clift Hotel in San Francisco], you would have gotten through it?

I.S.: Yes. I always think I would get through it.

L.G.: But it would've been tougher, right? Because credit is less available now.

I.S.: In 2003, I wasn't in control of my own destiny. I am now, and you can always sit and make a reasonable deal. I've been in the business since 1982. I was in the business when interest rates were 21 percent. There's always a way of maneuvering and dealing with things. I think what happens sometimes is, people get locked into certain situations, and maybe acrimony sometimes creeps into certain kinds of relationships, you can go against people's interest, things happen, it takes on a life of its own. I would avoid that kind of situation.

L.G.: You left Morgans in 2005, right? So how do you feel about that now, two years out?

I.S.: Great decision. I really left because I was unhappy, and I really walked away from whatever economic benefits I might have otherwise. It was really the kind of decision that you sort of read about in the books, you know-somebody getting unhappy, and saying "I've had enough." I wasn't doing what I enjoyed doing. I wanted to do something else, I wanted to move on, I wanted to do something else. And I walked away thinking that I might not see any economic benefits. I did, but I was at risk of not, and it was a great decision because I'm doing what I love to do and I'm happy now.

L.G. Are you completely out of that company now? You had a stake for a while and you sold that back to them?

I.S.: Yep, I sold out when my six months' restriction expired.

L.G.: Recently they ripped out and replaced the Philippe Starck lobby at the Royalton. Have you been by to look at their handiwork?

I.S.: Yes.

L.G.: What do you think?

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