The rich history of the Pakistan-owned Roosevelt Hotel in NY

A glimpse into a bygone era

Stepping through the hotel’s revolving doors feels like going through a time machine. Built in 1924, the hotel’s ambience still harkens back to “Roaring Twenties”, a time of great economic prosperity which is reflected in the grandiosity of buildings from the era.

From carefully crafted mouldings and gold-trimmed interior details, to its luxe sofas and royal chandeliers, the hotel screams of opulence. Most notable is the Palm Room, a two-storey oval-shaped tea room, next to the lobby. It is canopied by a beautiful mural with an elaborate chandelier hanging in the centre, and surrounded by marble pillars.

Over the years, the hotel’s operators have made a concerted effort to retain its yesteryear charm, cementing its status as a New York icon.

A place in New York’s history

Over the years, the Roosevelt Hotel has left an indelible mark on the history of New York.
Legendary musician Guy Lombardo began to lead the in-house band in 1929. Lombardo performed at the Roosevelt Grill every year till 1962 and became an integral part of the hotel’s fabric. It was in the Roosevelt Hotel where Lombardo and his band, “The Royal Canadians”, would perform Auld Lang Syne on the new year’s eve, beginning a tradition that exists in American culture till date. Apart from Lombardo, the hotel has also hosted many other reputed musicians, from jazz maestro Jan Garber to accordionist Lawrence Welk.

It has also hosted important political campaigns, especially of the Republican party, which used the location as a campaign office till the 1980s. Campaigns of President Dwight B Eisenhower and NY Mayor John Lindsay were run from the hotel.

The Roosevelt Hotel will remain memorialised forever in films and television shows. Scenes from movies such as Wall Street (1987), French Connection (1971) and Maid in Manhattan (2002), as well as popular TV show Mad Men (2007-2015) were shot at the hotel. In fact, owing to the show’s popularity, in 2012, the Roosevelt Hotel began selling Mad Men-themed vacation packages.

PIA takes over

It was in 1978, that the PIA got involved with the hotel. At the time, it had just been sold to real estate mogul Paul Milstein. Milstein leased the hotel out to PIA’s investment arm, PIA Investments Ltd. PIA teamed up with Saudi prince Faisal bin Khalid bin Abdulaziz Al Saud for the deal which was worth roughly $35 million and would last for 20 years. The deal also had an option for the duo to buy the property after the lease expired, for a set price of $ 36.5 million.

However, for the first decade and a half of its operation under the PIA, the hotel lost money, as it fell into disrepair. Consequently, heavy renovations were undertaken. After these renovations were completed, the hotel finally started making money again, prompting the PIA to exercise its option to buy in 1998. What followed was a bitter legal battle with the Milstein family, which claimed that the hotel’s value had skyrocketed since the original deal had been penned.

The PIA won the court case and became the full owners of the property after buying Al Saud’s stake in 2005. The court recognised the 1978 valuation, meaning that PIA got a very good deal.

Why lease it out now?

Since PIA first bought the hotel in 2000, talks of a sale have been perpetually ongoing. After all, given the valuation at which the purchase was made, any sale would make PIA massive profits. Every time the PIA registered an operating loss, talks of sale would come up.

However, there has never been enough support for the idea in the Pakistani political establishment. In 2003, then President Pervez Musharraf put an end to rumours of an imminent sale, citing the Iraq War as the reason. In 2007, when sale was broached again, the Pakistan Senate saw significant enough opposition to the idea for it to be dropped. Finally, in 2017, a sale was rejected by then Prime Minister Shahid Khaqan Abbasi.

However, the pandemic was a major blow. By July 2020, PIA officials were even talking about permanent closure, with the property bleeding roughly $ 37 million a year. Finally, in December 2020, the iconic Roosevelt Hotel was shut down.

While this was a financially prudent decision for PIA, for many New Yorkers, it was tragic. Local politicians eventually began lobbying the New York City Landmarks Preservation Commission to designate the structure as a landmark. This would prevent its demolition and redevelopment, in case PIA finally did decide to sell. This, put off many potential buyers, many of whom planned to raze the structure to build a massive, multi-use urban space in the heart of Manhattan.

Which brings us to 2023. As Pakistan’s domestic economy lies in shambles with its treasury running dry, something had to be done with arguably its most valuable offshore asset. Thus, the deal with the New York government was signed, which has been seeing an increasing number of asylum seekers enter the city.

Since the end of May, migrants have been moved to hotels by city authorities. “We opened the Roosevelt Hotel a few days ago, 800 rooms were filled,” New York Mayor Eric Adams said at a news briefing. “We are looking at every available space,” Adams said.

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The deal with PIA has been a win-win for both. For the New York government, it provides much needed space to accommodate asylum seekers. For PIA, it helps raise some much needed cash as well as prevent, for the time being, the property being designated a landmark.