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TIME | August 7, 2006

A Hotel Guru Changes Rooms

By Kate Betts

Ian Schrager brought hipness to hospitality. But his quirky new Gramercy Park Hotel project says that uncool is now the place to be.

What do you do when you wake up one morning convinced that the intangible hipness on which you based your enormous professional success no longer exists? If you're hotel impresario Ian Schrager, you replace the proverbial velvet rope with a comfy velvet cushion.

Perhaps that's logical for a 60-year-old and for a nation that's going to be teeming with them. Schrager, who revolutionized the hotel industry in the 1990s with his highly designed boutique properties like the Delano in Miami, is back in business and looking to launch yet another lifestyle revolution with his idiosyncratic Gramercy Park Hotel, opening this week at that fabled Manhattan location. Schrager wants to restore the celebrity of that address with a $200 million, 185-room hotel and adjacent condominium property.

This time Schrager is selling a completely different look, one he calls the antithesis of hip. The sleek modernism he pioneered with French designer Philippe Starck has been replaced by an opulent interior designed by the artist Julian Schnabel. The idea is to create a space that looks like an artist's studio. Instead of three-legged stools and linoleum floors, there are deep velvet sofas, stuccoed walls and Giacometti-style cast-bronze doorknobs.

Schrager calls it eclectic bohemian, a very personal response to what he sees as an overdesigned, overbranded and perhaps overaccessible idea of luxury. "There's going to be a backlash against all this branding," Schrager said on a recent tour of the lobby. "Everything hip is now immediately co-opted by the mainstream. I wanted to make something very individualized and unique."

But Schrager got rich by creating scenes and spaces that were the last word in cool. Can he now capitalize on quirky? Can he redefine the $122 billion U.S. hotel business the way he did back in 1984, when he and his then partner Steve Rubell opened Morgans on a nondescript stretch of Madison Avenue and introduced high style to hospitality? "Absolutely, people will want to see what he's doing," says Jeff Weinstein, editor of Hotels magazine. "But it's going to be hard for him to break new ground now because the industry has caught up with him. They've embraced style and lifestyle."

Certainly, Schrager's too-cool-for-school hotels have been copied relentlessly. Starwood Hotels & Resorts hired architects such as Ricardo Bofill and Charles Gwathmey to design its flourishing W Hotels, a chain many felt was a direct rip-off of Schrager. Marriott's Ritz-Carlton has partnered with the Italian jewelry company Bulgari to create a string of boutique hotels.

So Schrager is also expanding his portfolio into urban planning. Adjacent to the Gramercy is a 23-unit John Pawson--designed condominium, evidence of Schrager's master plan to combine hotels with full-time residential properties--at $5 million to $10 million apiece. He is about to announce a 10,000-unit residential, retail and hotel complex in Las Vegas, inspired by the Tivoli Gardens, Central Park and a Tuscan town square. In a softening housing market, the Las Vegas project will be a stern test of Schrager's vision. "Everything Ian does has levels of influence," says Ross Klein, president of W Hotels Worldwide. "He's an innovator, and this balancing of full-time and overnight property is what people will be watching."

Schrager's business, like that of most hoteliers, suffered after 9/11. He had expanded too rapidly, and the competition had caught up to him. By 2003, Schrager was forced into bankruptcy protection for the Clift Hotel in San Francisco and had to refinance debt. Last year he left his company, Morgans Hotel Group. Since then, he and his partner, developer Aby Rosen, have been involved in several deals in New York City, including 40 Bond, a condo in NoHo being designed by white-hot architects Herzog & de Meuron, and the Metropolitan Life building, a 1909 gem.

More than anything, Schrager is a stylist, and he understands that the fa├žade of any development, whether a hotel or a residence, has to jibe with pop culture to be commercially successful. Several years ago, he started to look around for a new idea, traveling everywhere from Istanbul to Texas. "Seeing other exotic kinds of aesthetics was expansive for me," he says. "I wanted to do something that was really a reversal. The prospect of working with an artist was new to me." And when he saw Schnabel's movie Before Night Falls, he knew Schnabel could project his unique style onto a different medium. It was also a good time to get back into the hospitality business, which is surging. The question is, How hot can his new "anti-cool" aesthetic get?