NEW YORK—Despite all the coverage their properties get, the men behind some of New York’s most boldface, chi-chi hotels are two of the most intentionally low-profile hotel developers/owners in town, who, despite their best efforts, keep finding themselves in the spotlight. In their portfolio, Richard Born and Ira Drukier, the principals of BD Hotels, have hotels like The Pod, The Maritime, The Chambers, The Mercer, The Bowery, The Jane and The Greenwich. While these properties may not have the global recognition of a Holiday Inn (they own one of those, too), in the world inhabited by New York fashionistas, glitterati and cognoscenti, they are the type of hotels one must know about and, in many cases, be seen at. Born and Drukier have ownership interest in 22 hotels representing about 5,000 rooms, and 20 of those are located in Manhattan BD Hotels also developed and manages The Chambers hotel in Minneapolis and TownHouse in Miami. BD Hotels is the operating arm for the portfolio, which runs the gamut from the economic 347-room Pod Hotel that features bunk beds in 90 rooms and rates starting at $89 per night to the luxury Greenwich Hotel, which the pair opened with partner and actor Robert De Niro earlier this year in the New York neighborhood of Tribeca. Partners for more than two decades, Born and Drukier consider themselves real estate developers who have found a comfortable niche in New York hotels, even though they started across the water in New Jersey. “The first hotel we bought was a Howard Johnson at Newark Airport in 1987,” recalled Born, noting with that 347-room property everything that could go wrong, went wrong. “The hotel that we bought [the price]seemed cheap and we learned why. We paid $11.5 million and we renovated it for $16 million to $17 million,” Born added. But they held on to it. A few years later the team started buying properties in Manhattan. Born acknowledged they were “less discerning” at the time, largely due to tight money. “We tend to be situation driven, not vision driven. We don’t walk out there and say I want to build a four-star, boutique hotel in SoHo. We scour the marketplace—at this point in our lives we have the luxury of people knocking on our doors—looking at opportunities. Now when properties are presented to us we do the analysis to determine what works best,” said Born. The Bowery Hotel, located at Bowery and Third Street, is an example. The property originally was being constructed as a dormitory. The building permit reportedly was lost because of technical problems with the plans and it was recommended BD Hotels take it over. It did and, together with celebrity hoteliers Eric Goode and Sean MacPherson, Born and Drukier created an upscale property in an unexpected market that draws an elite crowd. BD Hotels also is partners with Good and MacPherson in the round-windowed Maritime and The Jane on West Street, a conversion of an SRO hotel formerly known as The Riverview. BD Hotels has a penchant for out-of-the-way properties. “We’ve always looked at the new areas only because, in general, they’re bad areas. When we went into The Maritime it wasn’t a neighborhood anybody wanted to go in. And nobody looked at putting a hotel in the Bowery because there were bad people on the street,” said Drukier. In determining the risk factor of such moves, Drukier said, “I think we’ve come to grips with the fact that when we put a good hotel in a location, it changes the nature of the neigborhood a little bit.” Born noted the economy Pod Hotel, a conversion of the Pickwick Arms on 51st Street, was as much an opportunity as some higher-end projects. “We were given the choice of gutting out to about 100 to 110 standard hotel rooms or, for less cost, leaving the existing configuration in place and having some 350 rooms. We just thought there’s intense demand for moderately priced rooms and we decided to go with the bigger number,” said Born. “We decided to take a shot at doing a hotel that is luxury in every sense except for the size of the room,” said Drukier. At the time, some industry observers were less than supportive of such a concept smack in the middle of midtown. “We have always been called ‘nuts.’ I remember walking through the Maritime hotel with Ian Schrager right after we bought it before we did any work. I remember Ian turned to me and said, ‘Tell me you’re not out of your mind.’ He didn’t understand the neighborhood (West 16 Street and Ninth Avenue), didn’t understand the building (its windows look like port holes), couldn’t understand what we were doing and why we were doing it,” said Born. Similarly, Drukier said that when the duo went to do The Mercer, a friend who owns an office building two blocks away said, “What are you guys crazy? No one’s going to stay down here.” Drukier added that friend “had been in that office building for 20 years and he didn’t see the area changing around him. That happens a lot. That was the case with The Bowery, too. Most people hear the Bowery, they turn away.” Drukier noted at The Maritime, while the rooms also are small, it is the common space, and notably the two restaurants, that drives the hotel. “It’s a fun place to be. It has a buzz and an energy. Hotels have become more than just the rooms. They have to fit the person who is staying in them, but you have to have some life in the bar, the lobby, so it feels like my bedroom’s upstairs, my living room, dining room are down below,” said Drukier. “There are very few projects that we had a lot of self doubt about. At this point, we’ve got a pretty good pulse,” added Born. Toward that end, The Pod has been “hugely successful,” crowed Born. “I would say at a $1 per square foot basis it takes in more money than any hotel we own.” Year-to-date the occupancy is 93% and the ADR is $170, Born said. At the opposite end is the Greenwich Hotel. With its high-profile connection to the celebrity world—actor Robert De Niro is a partner—the property is what Born describes as the “penultimate” hotel. “We probably spent not much less than $1 million a room building it,” he estimated. Part of that money came from approximately $39 million in tax-free Liberty Bonds offered as part of post-9/11 recovery efforts. “That was a real passion. Robert De Niro wanted to build something that he would feel comfortable in. There’s a lot of his own aesthetic, a lot of his own input about what he thought should go into a hotel. And Ira himself has a fairly artistic eye for things and they spent a lot of time really searching out stones and mosaic tile work. It really is a tour de force,” said Born. The 88-room hotel opened earlier this year adjacent De Niro’s Tribeca Film Institute and his Tribeca Grill restaurant. “Ira and I have a fairly interesting partnership,” mused Born, when asked what the dynamic is between the duo. “Our real division has to do with specific assets and projects rather than I do construction, he does design, or he does design and I do financing, although we probably have those affinities within that. The real division of labor is he has his projects and I have mine. We’re both 50-50 partners in everything we do. It’s also interesting in that we then each have somebody whose interests are aligned who’s not consumed with the day-to-day development/operations of any particular project that we can reach out to for advice.” Born said the duo is “happy to sort of be in the background and to fill in the blanks and do what needs to be done within a project” and feels the thread connecting BD Hotels is probably better known in the industry than to the traveling public. “The ‘thread’ is really a few things. Number one is we really operate very well. Efficiently is a funny way to describe it because it’s hard to describe something like The Greenwich as efficient. By definition it’s inefficient; it’s over the top luxurious. But the operation is still an operation that is controlled and managed very well and that flows over into the service that the guests receive. For the traveler, we have hotels that work; things you need to get done get done and that’s something that transcends luxury. Whatever we promise a guest should be delivered whether they’re paying $99 a night or $1,000 a night,” said Born. “The second thing that the industry knows is that Ira and I have grown our company pretty slowly—deliberately. We do one or two projects at a time. We’re very low leveraged and we’re very solid and we have met 2,000% of our obligations. That’s probably what we’re best know for in an industry that sort of has a lot of quirky people in it. The interesting thing about the niche we play is there are founding fathers of the real estate business that when they have hotel issues or questions, I get those calls all the time. So we have a little niche that’s understood on the inside, not to the public,” added Born. And as for all the hoop-la that surrounds a BD Hotels project, neither Born nor Drukier considers himself a celebrity. “We have partners who are celebrities but I’m not a celebrity. We just work with a lot with interesting people,” said Drukier. “Ira tells me, ‘Don’t fool yourself,’” said Born. “Frankly, I’m surprised when someone seems to know me. I guess my head hasn’t grown with my business.”
