News for the Hospitality Executive
Orient-Express Acquires the Donnell Branch of the New
York Public Library for
$59 million in Cash; Will Build 150 room Hotel with a Rebuilt Donnell Library
in Mid Manhattan Adjacent to the '21' Club
|HAMILTON, Bermuda and NEW YORK, November 7, 2007 -
Orient-Express Hotels Ltd. , owners or part-owners and managers of 50 luxury
hotels, restaurants, tourist trains and river cruise businesses operating
in 25 countries, today announced that it has signed an agreement to acquire
the land and building of the Donnell branch of the New York Public Library
(the "Library"), located at 24 West 53rd Street in New York City.
Orient-Express plans to build a 150-room luxury hotel, including a rebuilt "state-of-the-art" Donnell Library location within it. The hotel will house contemporary dining, spa and wellness facilities, as well as expanded banqueting and dining space for the company's existing restaurant and dining business, '21' Club. '21' Club backs onto the Library premises in its location at 21 West 52nd Street and the two buildings will be connected. The property will be marketed under a new '21' Hotel brand name. The original '21' Club, a celebrated New York City institution, will be preserved at its current location in the heart of midtown Manhattan, with enhanced facilities.
"Expanding our luxury brands through select real estate development projects is a core strategy for Orient-Express," said Orient-Express Hotels President and CEO, Paul White. "In New York, everything points to the need for new luxury hotel rooms, especially in midtown Manhattan. We see this as an avenue to establish a new standard of boutique property and create a luxury experience for both leisure and corporate travelers."
"Our agreement with Orient-Express presents an extraordinary opportunity for us to create a modern, new circulating library at the same location as our current Donnell facility, which was opened in 1955, and is outdated," said David Offensend, Chief Operating Officer of the New York Public Library. "The cost of renovating Donnell is prohibitive. With this agreement, we'll be able to embark on the creation of a technologically advanced Donnell Library for our users, one that can set the standard for the 21st century."
Under the terms of the transaction, Orient-Express will pay the Library $59 million in cash, in addition to the value of the library space, which the Library will own and occupy. Construction, which is subject to Orient-Express obtaining all necessary permits, is scheduled to start in 2009. The hotel is expected to open in early 2011. The overall project is estimated at $220 million inclusive of the purchase of the Library.
The New York Public Library will retain approximately 28,000 square feet in the building for the new, "state-of-the-art" Donnell Library, which will occupy three levels, including the ground floor of the '21' Hotel building. The Orient-Express project will provide much needed upgrades to the library's outdated infrastructure, including overhauls to its HVAC system and elevators. The library will close to the public in fall 2008, and the rebuilding is expected to be completed in no more than three and one half years. During construction, the Library will seek a temporary site to provide Donnell's essential services to the public and develop a detailed plan to make its collections available at other New York Public Library locations. All information about the temporary site and relocation of Donnell's essential services will be available on the Library's web site (http://www.nypl.org) well before the scheduled start of construction.
Orient-Express noted that over the last several years, the conversion of many New York City hotels into condominiums has taken much high-end lodging supply out of the market. Smith Travel Research data shows 23 hotels have closed in New York since 2000, with many of the hotels converted to luxury condominiums during the housing boom. The hotel room reduction coincides with demand surging from overseas travelers capitalizing on a weak U.S. dollar. This has resulted in higher rates and corresponding profits for the New York hotel industry. Recent industry studies show that New York City could absorb a further 10,000 room supply without affecting overall occupancy and pricing. Manhattan's luxury tier hotel occupancy rate for 2007 year to date is currently 76%. There has been a 46% increase in average hotel rates from 2002 thru mid-August 2007. According to Cushman & Wakefield, despite new hotel developments currently in the pipeline, the additional rooms fall short of providing adequate supply, and most of the planned properties are select service hotels that are smaller and limited in scope.
About The New York Public Library
Orient-Express Hotels Ltd.
|Also See:||Orient-Express Spurns Indian Hotels' Overtures; The Indian Hotels Company Acquires 10% Stake in Orient-Express Hotels for US$ 211 million Seeking Proposed Alliance / September 2007|