Ian Schrager Company Logo 

The Sunday Times Magazine | April 30, 2006

King of the City

By Dominic Rushe

The stylish obsessions of Ian Schrager. First, he made disco rock - Then he turned hotels into chic playgrounds for the glitterati. Now, the sultan of style Ian Schrager is determined to change the way the super-rich live.

Graffiti has been good to New York. Once the signature of lawless urban decay, graffiti is now a marketing tool, its hard edges polished by money. The latest stage in the gentrification of graffiti is happening on the front of 40 Bond Street, Manhattan, a building soon to be one of the world's most exclusive addresses.

Just another building site at present, 40 Bond has been designed by Herzog & de Meuron, the architects best known for Tate Modern in London. When finished, the building's facade will rise 11 storeys high, cast entirely from greenish glass. It will look "like a skeleton dipped in sugar", says the man who commissioned it, Ian Schrager: former nightclub king, ex-convict, hotelier and now would-be city planner.

Along the street, a cast aluminium fence will pay nostalgic reference to the graffiti that once terrified a city. Behind that will lie 27 flats, which will go for close to $3,000 per square foot. The flats are not close to completion, but such is Schrager's--and Herzog's--reputation that seven of the units have already been sold, at prices ranging from $3.5m for a one-bedroom to $10m for a triplex. It's not the first time Schrager has carved out a fortune using the city's edge. His first hit, the legendary Studio 54 nightclub, let the famous mix with the infamous; his next hit, an ultra-hip hotel chain, made accountants feel like rock stars. Now, as he closes in on his 60th birthday, he wants to do it again. "I want to have an impact on things. I want to do something that is here for 100 years," he says. And not just by building expensive flats: Schrager wants to change the way we live.

Schrager looks unreasonably well for a man who has spent a large part of his life in nightclubs and hotel bars. Trim and tanned, with all-American teeth, he looks 10 years younger than 59. Only his hearing gives him away. Behind his back, some former colleagues call him "Buddy What?"--a phrase he uses a lot as he leans in to catch what you are saying. "Too much disco," he confides in his thick New York accent. John Pawson, the award-winning British architect, recalls driving around Miami with Schrager. "We were listening to Neil Young and he had this voice-activated music system in the car. He started saying 'Radio off' and 'Radio on,' but it couldn't understand a word he was saying. Eventually he started shouting at it: 'Shut up, motherf***er!' He can sound like someone from Goodfellas."

A mile north of 40 Bond, Schrager has commissioned Pawson to design flats on top of his Gramercy Park hotel. Downstairs, the hotel, set to open next month, will be "bohemian, maximalist. Like an artist's studio. Matisse or Brancusi", says Schrager, who has his friend the artist Julian Schnabel working on the plans. Upstairs, buyers have been snapping up Pawson's stark, minimalist boxes in what was, until Schrager moved in, one of Manhattan's chintzier neighbourhoods. In Las Vegas, Schrager is building another apartment complex. It will cater to the rich, offering everything from food and a DVD library to a travel agent and baby-sitters.

"As old institutions fade and social structures fall away, the world is a smaller place," gushes the 40 Bond website. "We are more mobile, jetting from one side of the world to the other, moving from one role in society to another. Nationality and class have been replaced by lifestyle. People find their place in the world through intelligence and taste. There are tribes of taste today... Lifestyle is the way a person distinguishes himself or herself. It is the artistry of living."

"I can get a bit esoteric about this," warns Schrager. "But why should we all live in the same type of housing if we have very different tastes? You are what you eat, you are what you wear--why not where you live?" Most of us don't have the spare cash to define ourselves by our homes in quite the way Schrager can. But good design has a habit of trickling down, he believes. Once big companies see that there is money to be made in better design and better service, they may follow suit. It happened with hotels; perhaps it can happen with houses.

Schrager has had Pawson in mind for a project for years. The two are now working on a hotel in Miami as well as the New York apartments. "We are looking around the rooms with a rather timid hotel manager," says Pawson, "who would knock on the door quietly and quietly say, 'Housekeeping.' Ian would pummel on the door and shout 'Police!' or 'Show me your credit card!'"

Often seen as a shadowy figure, Schrager says he would rather stick to the corners at cocktail parties. He is a not uncommon contradiction: the shy showman, a man who doesn't like the limelight but loves the applause. These days more than ever, he appears to be front and centre having fun. It hasn't always been so. Last summer he parted ways with Morgans, the hotel company he founded in the 1980s with his Studio 54 business partner Steve Rubell. He also ended his working relationship with Philippe Starck, the French designer who had defined the look of his hotel empire. Now a public company, Morgans changed the way hotels look and run, says Schrager. "When we started, no one was doing anything innovative. Now there is a version of what we did in almost every major city in the world." Schrager introduced the world to design--conscious hotels with trendy bars and restaurants. Even hotel lobbies--dead space for 100 years--were remade by Schrager.

His nightclub career had ended in infamy and jail. Now he was the reformed, respectable head of a company about to go public. But while his guests seemed to be enjoying themselves, Schrager wasn't. "I was a suit that didn't wear a suit," he says.

"Sometimes in life you have to achieve something before you realise it isn't the answer." So last year he quit. He didn't do too badly out of it. According to financial regulatory filings, he received a salary of $1.07m in 2005, will receive $750,000 for _ 2006 and $500,000 for 2007--plus a bonus of about $1m in 2005, and up to $750,000 in 2006 and $500,000 in 2007. He continues to act as a consultant for the company; and will get reimbursements from Morgans for business, entertaining and business-travel expenses, as well as payment for use of a private aircraft; use of an automobile leased by the company; a full-time driver; a full-time secretary; and complimentary rooms at any of Morgans' hotel properties.

"Kinda makes me want to open up a successful nightclub, lie to the IRS [the US tax authorities], and serve some prison time," wrote one unkind soul on Curbed.com, a website dedicated to the fertile soil of New York property gossip. People have said a lot worse.

Schrager's upbringing was conventional middle class. He grew up in Brooklyn; his father worked in the garment industry. But the Schragers never wanted to be like the neighbours. "We didn't follow what other people did," he says. "We didn't put a covering on the couch. They didn't forbid kids to walk through the living room." His parents also liked to entertain. At one Saturday-night party his parents threw, Schrager recalls that they put out a stack of Sunday New York Times for their guests to take home with them. "I just thought that was so gracious," he says.

There have been other reports about Schrager's father, Louis. According to a story in Esquire in the late 1970s, a New York State Liquor Authority report linked Louis Schrager to the Jewish godfather Meyer Lansky. "I've heard those rumours," says Ian Schrager. "I don't believe them. I often wondered if that was why we had problems at Studio 54. Maybe they thought I was in some way involved. I didn't know anything about it."

A couple of blocks away lived Steve Rubell, the man who was to become the most important partner in Schrager's life. But the two didn't meet until they both attended Syracuse, a middling college in upstate New York. Rubell was extrovert and gay, Schrager introvert and straight. Schrager, an athlete, first caught Rubell's eye when he was playing basketball. Schrager's opponent was far bigger but he never backed off. The odd couple hit if off immediately and never looked back. After college, Schrager, a qualified lawyer, and Rubell worked together on a series of projects, including restaurants and nightclubs. As disco fever swept New York, the two stumbled across a huge club on 54th Street in Manhattan. It was a cavernous venue, and felt like a big bet. But the pair were sure they could pack it. "I remember people saying, 'Do you think that people still want to dance?' People always want to dance. There are certain things that, since the days of Sodom and Gomorrah, still rule," says Schrager.

Rubell was the front man out on the disco scene, doing the promoting. According to Anthony Haden-Guest in The Last Party, his history of Studio 54, Rubell stumbled between clubs spreading the word. "My naaaame's Steeeeeve...uhhhh...Roooooobellll...ees gonnna be caa...caaalled Stoooooodio ffffifdy ffffoooo," Rubell told one prospective customer, confessing he was high on Quaaludes. Schrager was the back-office guy. But he was already showing his parents' flair for party-planning. Norma Kamali, then designer to Diana Ross, Bianca Jagger and Cher, remembers Schrager coming into her shop for the first time. "He wanted something for Studio 54," she says. "I wasn't in the least bit interested but he was so dynamic." Every little detail about the club had to be right: he would go through hundreds of fabric samples to find exactly the right one. "It was all in the detail," says Kamali, who became Schrager's girlfriend.

The club soon became a New York mecca. Among the galaxy of stars it attracted were Andy Warhol, Elton John, Liz Taylor, Michael Jackson and Brooke Shields. While Rubell schmoozed, Schrager obsessed about the next big party. Hallowe'en would be coming up and it would seem like the whole city was planning what to wear to Studio 54. "People dressed to death," says Kamali. They had to if they wanted to get in. Schrager and Rubell realised that the surest way to make people want something was to tell them they couldn't have it. The velvet rope was born: Rubell would stand outside the club, dividing the club into hip and square, and creating a mad desire to be on the right side of the rope. It was a policy that was to be much imitated, and one, Schrager believes, that led to their downfall: "There was an exclusivity but not based on wealth. It was based on sensibility. But I have found that in the public arena, that attitude is not politically correct. If you have dinner at home you try and get a balance. We tried to do the same thing. Not too many gays, not too many straights, not too many blacks, not too white, not too many men, not too many women. We did it spontaneously, just to create a good party. It smacked of elitism but it wasn't. There is nothing more boring that a bunch of elite people in a room looking at each other. What gives it energy is the diversity. At Studio 54 we'd have old people dancing with young people, rich people dancing with poor people." Schrager wasn't dancing, "I never danced at Studio 54. Studio 54 wasn't a party place for me, it was my office. And because it wasn't a party place for me, I didn't get consumed by it, which happens to most people in that business. Very few people survive and go on. That's the nature of the business. It's very hard to be around people partying and drinking at 3am and maintain the clarity of your thinking."

But the two were consumed Studio 54, and only Schrager survived. In December 1978 the club was raided by the IRS, the event showing karma in full force: on a night out a month earlier, one of the IRS agents had been turned away by Rubell. ("I didn't have a problem getting in on my second visit," he later observed.) Inside the club, the IRS found nearly $1m worth of notes stashed in bin liners. It was estimated that a further $2.5m had been skimmed, and Schrager and Rubell served just over a year at the Maxwell federal prison in Montgomery, Alabama.

Once again, Schrager was first: getting sent down 20 years before corporate contemporaries such as Martha Stewart. The experience still stings: "There was nothing virtuous to come out of that experience. What separates us from animals is our ability to exercise discretion. Well, you don't get to exercise anything in prison. It was terrible. I was very ambitious, and when I got out of prison I couldn't get a chequing account. I couldn't get a credit card. I lost everything."

In Key West, Florida, shortly after his release, Rubell found his social standing had fallen as far as his credit rating. Having spotted friends dining with the playwright Tennessee Williams, Rubell approached an empty seat. "That seat is occupied!" snapped Williams. But the two still had friends and ambition. Donald Trump knew them from the Studio 54 days. "Ian and Steve treated me great before I was Trump," recalls the tycoon. "They were gracious when I was in an office with my father in Brooklyn. You don't forget that." The pair came to Trump for advice after jail. He said he was sure that Schrager would succeed. "He has a very rare ability: He can keep the cutting edge. Usually cutting edge is quick and over, but he's kept that edge." Realising that their disco days were over, they decided to go into hotels and scraped the money together for a 50% stake in the Madison Avenue hotel that was to become Morgans. The rooms were small, they had no baths and the pair wanted top rates. As with Studio 54, exclusivity and celebrity would be the hotel's selling point. Like the barmen in Studio 54, staff were hired more for their looks than for their experience. Cher and Bianca Jagger were among the first guests. It was an instant success and the beginning of a new era for hotels and Schrager.

Sadly, Rubell died of an Aids-related illness in 1989, just as the hotel business was really taking off. Schrager, the shadowy background player, had to come out into the light. He also emerged--for the first time--as a talent in his own right. Morgans was followed by the Royalton in New York, the Mondrian in Los Angeles, the Delano in Miami, and St Martins Lane and the Sanderson in London. The celebrities changed--Kate Moss and Jade Jagger ousted Cher and Bianca Jagger. But they kept coming. "You can't have a viable business built on celebrities," says Schrager, "but it helps. If you are riding down in the elevator with a celebrity, it's like the Good Housekeeping seal of approval."

Schrager's hotels became famous for their bars, restaurants and lobbies, most of them designed by Philippe Starck. At St Martins Lane, a classic Louis XIV chair would sit opposite stools shaped like garden gnomes, and bits of Vermeer paintings were blown up to make pictures and headboards at the Royalton. The style was widely aped, and hotels became the new nightclubs--lobbies were the in place to hang out.

But Schrager was bored. "No one was going to get excited about another Schrager hotel designed by Philippe Starck," he says. "I had got lazy." At the same time his marriage to the former ballerina Rita Norona was falling apart. The couple have two daughters, on whom he dotes. During the interview he let me listen to a message from one of his girls, who was on holiday. "This is going to ruin my image," he said. He told Talk magazine shortly before his divorce that he had been seeing a psychoanalyst twice a week for over 18 months. "I always wanted to prove myself and be the first and best at what I did. But even if you are successful, you find out it's not enough. You ask yourself, 'What's it for?'" Work cost him his marriage, he says. "I got too involved and self-absorbed in my business. It was probably one of the most devastating things I have ever gone through. It was a failure. I wasn't a good husband." The couple are on good terms now, and Schrager says he is as happy as he has been in years. "I'm just as hungry as I have always been. Maybe I still feel I have to prove myself," he says. There's not much "maybe" about it.