photo by Joe Lawton



Ian Schrager is running late, but that’s nothing new. This is a busy time for the owner of such high-profile, ultra-cool hotels as Morgans, the Royalton, and the Hudson in New York; the Delano in Miami Beach; and the Mondrian in Los Angeles. From the waiting area in his bright, spacious midtown loft office on Manhattan’s 10th Avenue, there are occasional glimpses of him moving quickly about the labyrinthine maze of cubicles and glass-enclosed conference rooms. Finally, he settles down in a conference room with mock-up designs of various parts of hotels in progress pinned to the walls. Dressed in an unpretentious T-shirt and slacks, he is gracious and remarkably focused, considering all that’s going on around him these days. “I’m sorry we had so much trouble getting together,” he says, “but I’m quite busy right now. We’ve opened three one-of-a-kind hotels in the last year and we plan to open three or four more in the next couple of years. We’re in a transition period from a mom-and-pop business to a larger business and this is a difficult move to make. Entrepreneurs bite off more than they can chew,” he continues, almost apologetically, “then, just when they’re ready to digest it, they take another bite.”
      This is not Ian Schrager’s first bite. If you recognize his name at all, it’s probably as part of a duo that was almost as famous in the mid- to late-’70s as Batman and Robin. Back then, it was Steve Rubell and Ian Schrager. And if you were living in New York City, ever visited New York City, read about New York City, or if you weren’t living in the Bat Cave, you knew about the infamous Studio 54 (and later the Palladium), hangout of everyone with just a first name—Liza (Minelli), Halston, Calvin (Klein), Cher, Bianca (Jagger), Andy (Warhol) and every celebrity, would-be celebrity, wannabe celebrity, and celebrity watcher.
      But as high as Rubell and Schrager were riding, and they were riding very, very high, that’s how low they fell. Low enough to spend a year incarcerated for tax fraud after skimming hundreds of thousands from their operations.
      F. Scott Fitzgerald once mightily proclaimed that there are no second acts in America, but certainly Ian Schrager puts the lie to that lofty pronouncement.
      Schrager’s first act started in East Flatbush, Brooklyn, where he was born and raised. In 1964, he entered Syracuse University, majoring in economics. “If I could do it again,” he says now, “I would choose history, because history puts things into perspective,” which is an interesting thought for someone who has so much history of his own.
      It was at Syracuse that Schrager, who pledged Sigma Alpha Mu his freshman year, met Rubell, a result of their both dating the same young woman. Although physically and emotionally at polar opposites—Rubell was short and outgoing; Schrager, tall, thin, and shy—they became close friends. Those college years were priceless to Schrager. “The socialization process was very important,” he says. “Above and beyond the education in the classroom, it was an eye-opener, a refining process. That’s where I came of age. And the friends I made in college turned out to be lifelong friends.”
      After college, Schrager enrolled in law school and then, following graduation in 1972, he took a job in a commercial law firm that handled estates and trusts. Steve Rubell was one of his first clients.
      As the ’70s wore on, the so-called sexual revolution took hold and Andy Warhol’s proclamation that everyone would have 15 minutes of fame was born. “I was intrigued by the new lifestyle,” says Schrager, 54, who is now married to Rita Narona, a former dancer with the New York City Ballet, and father to two girls, Sophia, 6, and Ava, 3. “It was a very exciting time—the period when people were waiting on line to get into discos and I realized that, without a lot of capital, this could be my access into the economic system.”
      And so, in 1974, the two partners opened Studio 54. “At first we didn’t even have a liquor license,” Schrager says. It didn’t matter. Studio 54 took off, and so did Schrager and Rubell, who had already tasted some success when he started up a chain of steak-and-salad joints on Long Island. But this was like nothing either of them had ever seen or dreamed of. Suddenly they were as famous as those single-name celebrities who were waved past those velvet ropes. Loads of cash came pouring in. And, as Schrager says now, “We did a stupid thing.” What they did was skim money and stiff Uncle Sam, who was not pleased. When the IRS finally raided the place, they found hundreds of thousands of dollars in unreported cash. Schrager and Rubell pleaded guilty to tax evasion and went to federal prison for 13 months.
      “It was the darkest period of my life, other than the death of my parents,” Schrager says, his voice dropping slightly. He does not shirk talking about this time, nor does he make excuses for it. “When we got out we were below ground zero, because we couldn’t get a liquor license, couldn’t get credit cards, couldn’t even open a checking account,” he says. “They took everything from us, but I’m not complaining. That’s just the way the system works. We lost our way, but that didn’t affect my enthusiasm or my ambition. As my mother and father used to say: ‘There’s no real harm in falling down. The harm is in not picking yourself up and moving forward.’ Any success I have is the result of being relentless.”
      After their release, the two men, still close friends and partners, decided to look in another direction. They gobbled up a dilapidated hotel on lower Madison Avenue, renovated it, added a hip sense of style, called it Morgans, and they were off and running.
      Why the hotel business? “Because it was a logical progression,” Schrager says, leaning forward, his arms on the table. “They’re both hospitality businesses. With nightclubs you have no discernible product—it’s just magic and cachet. It’s the same basic approach in the hotel business, although I do have a product—a bed. But you still approach it the same way. They have the same goal, to take care of guests. Only one place they sleep over and one place they don’t.”
      The differences between Rubell and Schrager worked to their advantage. “Steve was more of a person who got gratification from taking care of others. I’m more visual and perceptual. I like to overwhelm people, blow them away with the strength of my ideas. I feel this instinctively, that something could be special, that I’m tapping into the zeitgeist. Anything involving vision involves listening to your gut. I don’t believe in focus groups. I do it for me and evidently there are other people out there who are like me. You know, if I go to a movie that’s very popular and I don’t like it, I just keep going back until I can understand what the rest of the culture sees in it.”
      Rubell died of hepatitis in 1989, leaving Schrager to go it alone. “Steve and I complemented each other,” Schrager says. “He was very smart, clever, sensitive, and people-oriented. I don’t intrinsically enjoy the attention. Steve really enjoyed having a public persona. But in our case, one plus one equaled three.”
      Schrager took to the hotel business like Michael Jordan took to basketball. He listened to his gut and every one of his hotels has been a roaring success. To explain this, Schrager, who now owns 16 hotels across this country and Europe, says: “I’m not a manager—I’m an entrepreneur with vision. I’m not interested in cookie-cutter anything. That just doesn’t interest me. I like to go into a 24-hour gateway city and saturate it at different price points. I’m not interested just in concentration, unless it makes sense to me.”
      Schrager is far from finished. He plans at least three new hotels in the next couple of years, two in New York City—one on Astor Place, the other on Bond Street—and another in Los Angeles. The Hudson is his latest and it’s a hit, in large part because it’s affordable, with rooms going for as little as $99 a night. “I like the lower end of the market,” he explains. “It’s more modern. The money is really irrelevant. It’s what I call vertical marketing. It’s like with a nightclub,” he continues, moving back to his roots, getting some perspective from history. “Diversity and tension are what make it interesting.”
      And how much longer can he go? He smiles. “I’ll keep doing this as long as my passion stays with me.”




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