July 7, 2006 - --Nicky Hilton will license her name to a South Beach hotel, establishing a new benchmark for hoteliers trying to leverage star power into higher room rates and profits. 

The deal to rename the adjoining Breakwater and Edison hotels the "Nicky O, a Nicky Hilton Hotel" will thrust the fashion designer -- best-known as the kid sister to Simple Life star Paris Hilton -- into an industry pioneered by her great-grandfather, Conrad Hilton. 

And while South Beach hotels routinely subsidize celebrities' vacations in hopes of being linked with them in press accounts, this is believed to be the first time a hotel paid directly for the rights to a star's name. 

'People want to be part of Hollywood and feel like they're in the 'in' crowd," said Robert Falor, president of the Falor Cos, the Chicago company converting the Breakwater and Edison into a condo-hotel complex. "Nicky brings that." 

Falor also will open a Nicky O in Chicago, and Hilton said Thursday she hopes to launch as many as 10 hotels across the country as part of her exclusive deal with the company. That would establish the 22-year-old as the newest competitor to Hilton Hotels, the lodging chain founded by her great-grandfather (and namesake) in 1925. 

A Hilton Hotels spokeswoman declined to comment on the matter Thursday, and Nicky Hilton said in a telephone interview that her lawyers saw no trademark concerns with establishing her name as a lodging brand. 

But Mark Stein, an intellectual property lawyer with Lott & Friedland in Coral Gables, said the matter might not be so simple. 

"It will be very interesting to see what Hilton [Hotels] does," Stein said. "On the one hand, you have to protect your trademark rights, and you don't want Paris Hilton or Nicky Hilton to open up a competing hotel chain. On the other hand, you also have some real challenges trying to get them to stop. It is their name, and they do have independent fame." 

Paris and Nicky's father, Richard Hilton, made a fortune as a real estate developer, but did not work for the hotel company. 

Falor said the Nicky O brand (the O stands for Hilton's middle name, Olivia) will set the tone for the entire look of the 95-room Ocean Drive hotel. From the mattresses -- Hilton wants the same found at the Waldorf-Astoria, where she grew up -- to the bellhop uniforms to the pens at the front desk, Hilton said she has been pushing for a particular style. 

"I just love the life of a hotel," she said. "The restaurant downstairs. The shops. Having housekeepers everyday. I think I know a good hotel, and I love good service." 

Along with her socialite status -- she's currently dating Entourage star Kevin Connelly -- Hilton gained attention for her "Chick" line of clothes and handbags. She said she signed well-known designers, including Roberto Cavalli, to decorate the Nicky O suites. 

"I want to bring a fashion element to the hotel, because that's what I do," she said. "I think it's definitely going to bring a trendy, fashionable person who's coming into town to have fun." 

Units at the Nicky O will start just under $500,000, with penthouses priced over $1 million, according to a sales website. 

Hilton has signed with a developer known for prolific deal-making and for tangling with business associates. 

Falor launched five condo-hotel projects in South Florida in the past three years, including the purchase of South Beach's Royal Palm and converting the Tides on Ocean Drive. But he has been sued by a former sales director and commercial broker over disputes and is currently fighting in court with his partner in the Breakwater and Edison deal. 

Though it's rare to have their names over the front door, Hilton joins a long list of celebrities bringing their fame to the lodging business. Francis Ford Coppola has a lodge in Belize, Bono owns a share of a Dublin inn, and Elizabeth Hurley announced Thursday her stake in London's Eleven Cadogan Gardens Hotel. 

Donald Trump might offer the closest parallel to the Nicky Hilton deal. The famous developer frequently licenses his names to projects -- including those in Sunny Isles Beach and Fort Lauderdale -- in exchange for a portion of condominium sales and hotel revenue. 

Falor said another company will operate the Nicky O, but that Hilton plans on living there for a month after it opens in October to supervise the property's launch. 

And while she's young and famous, Falor said he has been impressed by Hilton's business acumen. After signing on with Hilton, the developer said TV producers pitched creating a reality show out of Hilton launching the South Beach hotel. 

"Her manager and I were all over it," Falor recalled. 'She came back and said, 'Guys, why would we want to do that? If the reality series doesn't go over or do well, it reflects negatively on the project.' " 

Reached again Thursday evening, Hilton confirmed the account, saying she wasn't interested in being a reality-TV star. 

"I just think it's cheesy. Why sell out like that? It's tacky," she said. "I want to make this very elegant and sophisticated." 

-----

Copyright (c) 2006, The Miami Herald

Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. NYSE:HLT,