Salzberg et al.: Enterprise Zone Published by SURFACE, 2001 1 Syracuse University Magazine, Vol. 18, Iss. 2 [2001], Art. 4 Enterprise Zone . Life After Studio 54 In the disco days of the '70s, Studio 54 co-owner minutes of fame was born. "I was in­ trigued by the new lifestyle," says Schra­ /an Schrager helped define celebrity culture. Today ger, 54, who is now married to Rita Narona, a former dancer with the New he's shaking up the hotel industry with his unique York City Ballet, and father to two girls, vision and enthusiasm for catering to guests. Sophia, 6, and Ava, 3. "It was a very excit­ ing time-the period when people were By Charles Salzberg waiting on line to get into discos and I real­ ized that, without a lot of capital, this could be my access into the economic system." an Schrager is running late, but that's be celebrity, wannabe celebrity, and celeb­ And so, in 1974, the two partners opened Inothing new. This is a busy time for the rity watcher. Studio 54. "At first we didn't even have a owner of such high-profile, ultra-cool But as high as Rubel! and Schrager liquor license," Schrager says. It didn't mat­ hotels as Morgans, the Royalton, and the were riding, and they were riding very, ter. Studio 54 took off, and so did Schrager Hudson in New York; the Delano in Miami very high, that's how low they fell. Low and Rubel!, who had already tasted some Beach; and the Mondrian in Los Angeles. enough to spend a year incarcerated for success when he started up a chain of From the waiting area in his bright, spa­ tax fraud after skimming hundreds of steak-and-salad joints on Long Island. But cious midtown loft office on Manhattan's thousands from their operations. this was like nothing either of them had lOth Avenue, there are occasional glimps­ F. Scott Fitzgerald once mightily pro­ ever seen or dreamed of. Suddenly they es of him moving quickly about the claimed that there are no second acts in were as famous as those single-name labyrinthine maze of cubicles and glass­ America, but certainly Ian Schrager puts celebrities who were waved past those vel­ enclosed conference rooms. Finally, he the lie to that lofty pronouncement. vet ropes. Loads of cash came pouring in. settles down in a conference room with Schrager's first act started in East And, as Schrager says now, "We did a stu­ mock-up designs of various parts of hotels Flatbush, Brooklyn, where he was born pid thing." What they did was skim money in progress pinned to the walls. Dressed in and raised. In 1964, he entered Syracuse and stiff Uncle Sam, who was not pleased. an unpretentious T-shirt and slacks, he is University, majoring in economics. "If I When the IRS finally raided the place, they gracious and remarkably focused, consid­ could do it again," he says now, "I would found hundreds of thousands of dollars in ering all that's going on around him these choose history, because history puts things unreported cash. Schrager and Rubel! days. "''m sorry we had so much trouble into perspective," which is an interesting pleaded guilty to tax evasion and went to getting together," he says, "but I'm quite thought for someone who has so much federal prison for 13 months. busy right now. We've opened three one­ history of his own. "It was the darkest period of my life, of-a-kind hotels in the last year and we It was at Syracuse that Schrager, who other than the death of my parents," plan to open three or four more in the next pledged Sigma Alpha Mu his freshman Schrager says, his voice dropping slightly. couple of years. We're in a transition peri­ year, met Rubel!, a result of their both dat­ He does not shirk talking about this time, od from a mom-and-pop business to a ing the same young woman. Although nor does he make excuses for it. "When larger business and this is a difficult move physically and emotionally at polar oppo­ we got out we were below ground zero, to make. Entrepreneurs bite off more than sites-Rube]] was short and outgoing; because we couldn't get a liquor license, they can chew," he continues, almost Schrager, tall, thin, and shy-they became couldn't get credit cards, couldn't even apologetically, "then, just when they're close friends. Those college years were open a checking account," he says. "They ready to digest it, they take another bite." priceless to Schrager. "The socialization took everything from us, but I'm not com­ This is not Ian Schrager's first bite. If process was very important," he says. plaining. That's just the way the system you recognize his name at all, it's proba­ "Above and beyond the education in the works. We lost our way, but that didn't bly as part of a duo that was almost as classroom, it was an eye-opener, a refining affect my enthusiasm or my ambition. As famous in the mid- to late-'70s as Batman process. That's where I came of age. And my mother and father used to say: and Robin. Back then, it was Steve Rubel! the friends I made in college turned out to 'There's no real harm in falling down. The and Ian Schrager. And if you were living in be lifelong friends." harm is in not picking yourself up and New York City, ever visited New York City, After college, Schrager enrolled in law moving forward.' Any success I have is the read about New York City, or if you school and then, following graduation in result of being relentless." weren't living in the Bat Cave, you knew 1972, he took a job in a commercial law After their release, the two men, still about the infamous Studio 54 (and later firm that handled estates and trusts. Steve close friends and partners, decided to look the Palladium), hangout of everyone with Rubel! was one of his first clients. in another direction. They gobbled up a just a first name-Liza (Minelli), Halston, As the '70s wore on, the so-called sexu­ dilapidated hotel on lower Madison Calvin (Klein), Cher, Bianca (Jagger) , al revolution took hold and Andy Warhol's Avenue, renovated it, added a hip sense of Andy (Warhol) and every celebrity, would- proclamation that everyone would have 15 style, called it Morgans, and they were off S UMM E R 2 001 5 https://surface.syr.edu/sumagazine/vol18/iss2/4 2 Salzberg et al.: Enterprise Zone Schrager continued and running. ing to your gut. I don't believe in focus cookie-cutter anything. That just doesn't Why the hotel business? "Because it groups. I do it for me and evidently there interest me. I like to go into a 24-hour was a logical progression," Schrager says, are other people out there who are like gateway city and saturate it at different leaning forward, his arms on the table. me. You know, if I go to a movie that's price points. I'm not interested just in con­ "They're both hospitality businesses. very popular and I don't like it, I just keep centration, unless it makes sense to me." With nightclubs you have no discernible going back until I can understand what Schrager is far from finished. He plans product-it's just magic and cachet. It's the rest of the culture sees in it. " at least three new hotels in the next cou­ the same basic approach in the hotel busi­ Rubell died of hepatitis in 1989, leaving ple of years, two in New York City-one ness, although I do have a product-a Schrager to go it alone. "Steve and I com­ on Astor Place, the other on Bond Street­ bed. But you still approach it the same plemented each other," Schrager says. and another in Los Angeles. The Hudson way. They have the same goal, to take "He was very smart, clever, sensitive, and is his latest and it's a hit, in large part care of guests. Only one place they sleep people-oriented. I don't intrinsically enjoy because it's affordable, with rooms going over and one place they don't." the attention. Steve really enjoyed having for as little as $99 a night. "I like the lower The differences between Rubell and a public persona. But in our case, one plus end of the market," he explains. "It's more Schrager worked to their advantage. one equaled three. " modern. The money is really irrelevant. "Steve was more of a person who got grat­ Schrager took to the hotel business like It's what I call vertical marketing. It's like ification from taking care of others. I'm Michael Jordan took to basketball. He lis­ with a nightclub," he continues, moving more visual and perceptual. I like to over­ tened to his gut and every one of his back to his roots, getting some perspective whelm people, blow them away with the hotels has been a roaring success. To from history. "Diversity and tension are strength of my ideas. I feel this instinc­ explain this, Schrager, who now owns 16 what make it interesting." tively, that something could be special, hotels across this country and Europe, And how much longer can he go? He that I'm tapping into the zeitgeist.