How to build North America’s tallest hotel
 
How to build North America’s tallest hotel
09 JANUARY 2014 7:07 AM

Developer Harry Gross combines Courtyard and Residence Inn in a 68-story midtown Manhattan building.


NEW YORK—Harry Gross, the developer behind the new 639-room Courtyard/Residence Inn Central Park in midtown Manhattan, has a simple philosophy on building hotels.
 
“My approach is never to ask for favors from the city, state or anybody else,” Gross said. “I have built all my buildings from the ground up as of right.”

During an interview with Hotel News Now after the ribbon-cutting ceremony for North America’s tallest hotel, Gross, president and CEO of G Holdings, combined humility with ambitious goals, which included “reinventing the hotel business.” 
 
Gross, 73, was born in Israel and moved to the United States in 1967. He has already been instrumental in reinventing several Marriott International brands, being among the first to create an urban Courtyard by Marriott with a location in Manhattan.
 
“Marriott has evolved; they used to be so strict about their brand standards, but now they are accepting of change,” Gross said.
 
His latest project, which sits between Times Square and Central Park on a prime site in midtown Manhattan, is a dramatic one in itself. The building houses a Courtyard from floors 6-33 with 378 rooms and a Residence Inn from floors 37-65 with 261 suites. 
 
Gross also owns a Courtyard in Times Square; a Residence Inn near Bryant Park in Manhattan; a Courtyard at JFK International Airport; a Residence Inn in Philadelphia; and a Marriott Hotel in Ghent, Belgium.
 
At a news conference to mark the opening of the dual-build project, Marriott CEO Arne Sorenson said: “This hotel is an extraordinary jewel. All 68 stories are dedicated to hotel rooms and facilities. And the timing is perfect because of the miracle of New York City as a global destination that has seen more than 54 million visitors in 2013, with a strong driver of that international business.”
 
Sorenson said 160 employees would work in the hotel, which is expected to welcome 1,000 people every day. 
 
At the news conference, Gross said he was only able to build the hotel because of a construction loan from Wells Fargo that he was given shortly after the 2008 crash. He said he approached the bank when there was little funding for development and “they gave me what was their first loan after the crash.”
 
The developer said the city was nothing but helpful throughout the process, as far as permits and policies. While sharing the stage with officials for the new administration of Mayor Bill de Blasio, Gross praised the now-departed administration of Michael Bloomberg but said he looked forward to working with the new mayor and his team. 
 
Surpassing standards
The Courtyard/Residence Inn surpasses standards for both brands, according to executives, with upgraded bedding, furnishings and amenities. The building, with a dramatic multi-layer exterior, cost $344 million to develop, according to Gross. He said he is projecting year-round occupancy of more than 90% with rates of $300 and up for the Courtyard rooms and $350 and up for the Residence Inn rooms—both above the averages for the market.
 
According to STR, parent company of Hotel News Now, New York’s occupancy for 2013 through November was 84.6%; average daily rate was $254.32; and revenue per available room was $215.26.
 
The property offers atypical versions of both brands. Because of the design, every room has a different configuration and is of a different size.
Rooms are smaller than typical for both brands; the Residence Inn offers all “studio suites” instead of the traditional one- and two-bedroom options. There is a single lobby for both hotels but separate elevator banks. 
 
A small footprint
Everything about the hotel is large … except the site itself. Gross said, “We have 100 feet by 100 feet and our job was to maximize the use of that limited footprint—so we built up.” 
 
That included purchasing a variety of air rights in the years since Gross bought the site. “This would be possible only in New York,” he said. “And it gave us the opportunity to think outside the box.”
 
Gross bought the site for $32 million in 2001, when it was occupied by three nondescript buildings. 
 
“We were told we had overpaid at the time,” he said. “So I asked Harry Helmsley (the legendary New York developer and founder of Helmsley hotels) about how he had succeeded. And Harry told me, ‘I always overpaid,’ so I felt OK about that.”
 
The Residence Inn breakfast and reception areas on the third floor are the only parts of the hotel’s public spaces that aren’t shared by both brands. There is 5,000 square feet of meeting space in seven meeting rooms at the bottom of the building. The fitness center, on the 35th floor, is shared by guests of both hotels.
 
Gross’s original concept was for a luxury condo and hotel combination. At the time, he said, the condo market was strong. But before he could put it together in 2008, the market crashed and Gross was left with a decision to make on where to go next.
 
“I did a lot of homework on brands. I looked at full service versus select service, and I saw that full-service guests are paying for things they don’t use, like ballrooms,” he said. “These brands allow us to save at least 20% on labor.” 
 
Having been so successful with the Courtyard and Residence Inn in Manhattan, Gross decided to bring those two brands to his project … with all the brand adaptations necessary to make them fit. 
 
“At the end of the day, Marriott approved,” Gross said.
 
He said there were multiple advantages to having the “two-pack” of brands, including two reservations systems targeting demand for the same building as well as many efficiencies due to the sharing of staff (there is one GM) and back-office departments, such as accounting.
 
Family game
G Holdings is very much a family business. Ron Gross, Harry’s son, oversaw the construction of the Courtyard/Residence Inn Central Park, completing it in 30 months after an initial projection of 36 months.  Ron Gross attributed that to “good design and a good team that we have worked with before.”
 
Another son, Etai, is building a Courtyard as part of a mixed-use development in Long Island City, Queens, another hotbed of New York development.
 
Despite being a family company, the “G” in G Holdings does not stand for Gross. 
 
”My first real estate venture was a group of single family homes in Mendham, New Jersey,” Harry Gross said. “I bought the land and then discovered there was a massive piece of granite right in the middle that had to be removed.” Therefore, Gross named the company G Holdings after the granite incident.
 
The opening for the new hotel was held Tuesday in zero-degree weather.
 
“New York City embraced us and offered us a chance to build this extraordinary hotel overlooking both Times Square and Central Park. So please come stay with us,” Harry Gross said. “Where else but in New York and America can someone who came here with two suitcases eventually build the tallest hotel in North America? God bless America.”
 
 

1 Comment

  • sallyam@optonline.net March 16, 2015 9:33 AM

    I am interested in contacting one of the developers of the Gross family. I have a customer interested in purchasing Please contact me if interested Sally Morris Thank YOu

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.