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Hotel Chelsea's Money-Sucking Redevelopment Hits Another Snag

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One of the troubled project's redevelopment partners is splitting ways

The saga of Hotel Chelsea's redevelopment into a high-end hotel continues after minority owner Ed Scheetz has tapped out amid a bloated budget, delayed timeline, and litigious building tenants. The Post reports that majority stakeholders, investor Bill Ackman—of One57 fame—Leucadia National Corporation chairman Joseph Steinerg, and investment firm Wheelock Street Capital have parted ways with Chelsea Hotels CEO Scheetz (who, for what it's worth, renamed his King & Grove company after the iconic development.)

Ackman et. al. purchased the hotel with condos from Joseph Chetrit in 2013 with plans to finish off the renovation Chetrit already started and reopen the Queen Anne-style building as a luxury hotel with condos. But things haven't been going smoothly at the site, to say the least. Likened by the Wall Street Journal to a "Wall Street money pit," the investors have already funneled over $130 million into the project with no end in sight. The Post speculates remaining work on the project will cost about $150 million, and that doesn't include any setbacks caused by the building's longterm tenants, who aren't happy with how the bohemian haven is being co-opted.

As for who will step in and take Scheetz's place, Ackman and crew have been in talks with other hoteliers. The Post says that the group was in talks with Ian Schrager, but the conversation to bring him into the fold has dissolved. Rumor has it that boutique hotelier Richard Born of BD Hotels may step in to take Scheetz's place.

Hotel Chelsea

222 West 23rd Street, New York, NY 10011 Visit Website