Hard Rock Gets Foothold In Key Market: NYC

NEW YORK— Hard Rock Café International has cinched a deal that will give the growing Hard Rock Hotel brand a major boost via a prime gateway location with a property here in the heart of Times Square. Becker Ventures LLC, a partner with Hard Rock in its Chicago hotel, purchased The Paramount here, one of the first hotels developed by Ian Schrager. The company subsequently inked an agreement for Lifestar Hotels LLC, which represents the joint venture between Hard Rock Café and Sol Melia Hotels and Resorts, to manage the property. The Paramount will be re-branded as a Hard Rock Hotel following a multi-million capital improvement project slated for next year. Approximately $126.5 million was paid to Century Paramount LLC for the 610-room property, located at 235 West 46th Street in the Times Square neighborhood, according to Hard Rock. The deal was worked out in just a few short months, with news of negotiations staying below the radar for the most part, surfacing only recently. “This deal was a direct result of Hard Rock having intimate contacts in the industry. We were contacted by NorthStar and asked if we were interested in the property. The hotel never even went to market,” said Trevor Horwell, vp/hotels and casinos for Hard Rock Café International, in an interview with HOTEL BUSINESS®. Northstar Capital is the majority owner of Ian Schrager Hotels. After initial negotiations between Northstar and Hard Rock got underway, Hard Rock brought in Becker as the majority investor in the Manhattan hotel. Lifestar has a minority interest in the New York property, according to Horwell. In keeping with Hard Rock’s previously stated plans of growing in major markets, this deal gives the hotel chain a presence in one of the most desirable international gateway cities, in one of Manhattan’s most vibrant locations. “If you don’t have a New York presence, you can’t be regarded as a major player,” said Horwell. “This deal was key for us in our global growth strategy.” Plans call for the Paramount to remain open during its redesign. The architect/designer who will handle the property’s redevelopment is expected to be named within the next six weeks, according to Horwell.