Arena | November 1999

SCHRAGER AGAINST THE MACHINE

and I are getting on famously. We are up in his sixth floor bedroom at St Martins Lane, his new London hotel, in the early afternoon. He's dimming the lights. I'm drawing the curtains. Now he is growling it's that gruff Brooklyn accent that sounds like he is chewing golf-balls. 'OK,' he says to himself, 'put dal over...' He fiddles with something by his bed. The wall behind begins to glow blue, or is it green?

There is a knock on the door. Oh no, it's his wife!

Honestly, we were just testing out his interactive lighting system. Rita Schrager, a lissome, beautiful, Cuban-American ballerina, glides past in stretch top and jeans, clutching a Voyage shopping bag.

'How was it, honey?' Schrager says, gazing at her, rather in awe. She looks unimpressed. 'Yeah, it was neat,' she says, finally. 'You had lunch yet?'

Schrager, a trim, greying fiftysomething in white slacks and blue leisure shirt, appears contrite.

'Nah.'

Too busy talking. She rolls her eyes.

'He wouldn't eat if I didn't make him,' she says, turning to me and raising her perfect crescent eyebrows.

'Whadda tell ya,' whispers Schrager, nudging me in the ribs and giving me a little wink as we follow her physique down the plastic-sheeted hall, 'my wife, she sets the social agenda now.'

You have got to admire Schrager. He is the bounce back king. Twenty years ago he had the world queueing up to get into his Studio 54 nightclub in New York. Then he and his partner Steve Rubell blew it spectacularly. Caught skimming cash - millions of dollars of it - out of the business to avoid tax, they were banged up in jail for a year. They came out, they went back into business, ran another nightclub to fund their move into hotels, and leapt.

Fifteen years later, Rubell is dead and Schrager is acclaimed as a hotel genius. His Morgans, Royalton and Paramount hotels in New York, as well as the Delano in Miami and the Mondrian in West Hollywood, are hailed as masterpieces of chic, minimalist design which have set a new standard in chintz free accommodation for style-conscious urbanites.

And now, for the first time, here he is in London, working with his American team plus long term collaborator Philippe Starck to open St Martins Lane in London's West End, and next year The Sanderson, a block north of Soho. Then, who knows, Manchester, Birmingham, Paris? This wiry, 53 year old is ambitious and, as he indicates to me, he needs to get on with things before others beat him to it.

In fact, others in London already have. The capital has a fistful of boutique hotels - One Aldwych, The Metropolitan, Blakes, The Hempel, Covent Garden - all now competing aggressively for style points and diary column mentions. Schrager, while acknowledged as the master, will have to be on top form to elbow his way past the pack. He says it's the kind of challenge he likes.

St Martins Lane is a good start. A clever conversion of a drab Sixties office block, under which the old LumiËre cinema used to lurk, and in a dream position straddling Covent Garden and Soho, it is pitched as much at the dine out, London crowd as it is at hip, incoming tourists. Up top, 204 white, spartan rooms with floor to ceiling windows split off smooth, cool corridors; down below, there is the usual Schrager Starck floorshow, with bars, restaurants and cafes spilling out of the lobby on to the sidestreet pavements.

Anyone familiar with Schrager's Paramount in New York will know the score: the rooms at St Martins Lane (which start at £125 per night) are good value for the increasing numbers of people who would rather pay a little more to stay in a non chain environment. Sanderson, however, will be more expensive, like the Royalton in New York. All four hotels share the same core values: the experience is about the quality of the materials and the visuals - the tone of the stone on the floor, the wit of the giant vases stuffed with out of season delphiniums, the precision of the slabs of colour on the walls.

And it's also about the buzz, attracting the right crowd: in this case, London's ever growing advertising and media crew. Schrager already has ambitious plans to convert the old cinema space underneath St Martins Lane into a complex of screening rooms, with bar, bookshop and restaurant, tagged Tribeca London, and linked to Robert de Niro's synonymous facility in New York. A similar star link up with Madonna, who is a partner in the Blue Door restaurant at the Delano, worked wonders for publicity in Miami.

Schrager bounds up to me in the lobby when we meet. 'I'll just be a minute,' he says, beaming with excitement. He has a dark blue wind cheater tied round his baggy white casuals, and looks like he is just going for a stroll on Miami Beach. It is the week before opening and the lobby is a pandemonium of skinny women with clipboards and crew cut men looking taut. You can feel the anxious excitement, like the hours before a theatre curtain goes up on first night.

Schrager touches me lightly on the arm when he returns. It is the first of many touches, on the shoulder, on the back, on the elbow. 'Touchy feely', as one Brit property developer describes him, barely does it justice. Schrager is Tactile Man incarnate: basically shy ? 'I love talking business. I can't do small talk, yunno?' - he is constantly looking for reassurance, and always trying to gauge the feel of things, even people. It is probably why he is so good at producing environments that capture others' imaginations.

He learnt that knack relatively late. Bronx born but brought up in Brooklyn, a better class of neighborhood, Schrager's was a second generation, immigrant family: Dad, a clothing manufacturer, was German Jewish stock, his mother's family was Polish. They had ambitions. My son the lawyer, my son the doctor. Schrager's younger brother became a cardiologist. Schrager practiced law for a handful of years before realizing that he preferred business and joining up with a former college chum, Steve Rubell. They ran restaurants and launched a nightclub in Queens. That was their dry run. Then they launched Studio 54 in Manhattan and for 33 months Rubell and Schrager became the most famous nightclub owners in the world.

They were a good pair. Rubell, frenetic, loquacious, gay, charmed the media and glad handed the rich and famous. Schrager, quiet, determined, straight, organized the workforce and planned the visuals. He never danced.

'I never felt comfortable,' he says. Too much on his mind. He was as dose to Rubell as to a twin. When Rubell died suddenly in 1989 (of Aids related illnesses), Schrager was devastated. He rebounded into marriage with his then girlfriend. Now everyone in America knows him as the goof who cancelled the ceremony on the day of the wedding, when all the guests were already assembled for a huge society bash. People whispered that it was because his girlfriend wouldn't sign a pre-nuptial agreement. What does that say about him?

'I just made a fool of myself, yunno?' he says, running his hand over his head. 'But it would have been the worst mistake I had ever made in my life. I broke a cardinal rule: never make a major decision in life for a year after being traumatized.' Since then, he has met and married Rita, and had two daughters, and is clearly happier than ever. But both his parents died before Studio 54 opened, his big sister died of heart failure three years before Rubell. Talking to Schrager, you get the impression he still carries a lot of loss around with him.

He has always loved London, it's like New York, he says, without the attitude or aggression. Apparently he and Rubell looked at opening a Studio 54 here - it was going to be in the Old Vic - but it fell through. He could have opened a hotel elsewhere, he was offered Dublin and he knows it's a cool place, but he wants to be somewhere he has a feel for. 'I only want to do hotels where I want to go, really,' he says. Nervous about opening?

'I am nervous,' he says, 'because I want it to be great. It's not because of the money. My payoff is if people get blown away by it, say they have not seen anything like it before. The money is a natural consequence of that.'

We are up in his sixth floor bedroom, commandeered as a makeshift office. Schrager leans back in a clear plastic, Starck chair, sticking out his chin and speaking slowly, methodically, like a boxer explaining a fight. Only his deep brown eyes, darting restlessly round the room, betray the anxious energy that spurs him on.

After his early foul up with the law - 'Organized crime,' he mutters. 'We were disorganized crime!' (He and Rubell hid their skimmed cash in dustbin bags in Studio 54's ceiling, which says a lot about their youthful naivetÈ) - Schrager has proved an astute businessman. Hotels is now a near $300m turnover company, posting profits of around $120m. His outlets, he says, are looking at margins of around 30-40 per cent and getting bigger all the time.

How does he do it? First, by his unfailing nous for what's hip. He's lucky, he explains, people love his taste, and he and his team can parlay Starck's designer vision into workable reality at different price levels. 'It's not an intellectual exercise for me, I do what I like and because I am not doing it for 100 million people it works.'

Second, he keeps a tough grip on the figures. 'He is incredibly sharp,' says Nick Leslau, the former boss of Burford, the British property group which is partnering Schrager in his UK launches. 'Ask him why he has this kind of cloth rather than that in his rooms and he will tell you, this costs $1.25 to launder, that cost $1.75. He is just bloody good at the operations side.' Other hoteliers point out that Schrager is also smart about what he spends his money on, namely, really expensive lobbies. The rooms, where clean lines and funky designs camouflage a lack of space and a scarcity of basic furniture, are far cheaper to kit out.

And third, he is a total perfectionist. For Schrager, the hotels are about more than just bodies in beds, they are about superb visuals, but also attitude and ambience, good looking staff, happy vibes, the right feel. Leslau tells of how he suggested to Schrager that, once the two London outlets were up and running, they could then bang out the same formats all over Europe. 'Nah, Nick,' Schrager responded, 'ah gotta contemplate it...' Schrager says that Leslau's reaction was 'Contemplate it! What do you fucking mean, contemplate it!'

It is this insistence that he work at his own pace, and that with each hotel he 'reinvents the wheel', that boggles those who work with him. Schrager describes his chief quality as being 'relentless' - he keeps banging away till he gets something right. 'Until recently I never thought I had more talent than anyone else, I just worked harder.' And he has had to be tough. Psychologically, he tells me, the year in jail almost broke him. He would never have gone into nightclubs if his parents had still been alive, they just wouldn't have allowed it, and he found it hard to handle how stupid he had been.

Plus the fact that when he got out, moving back into business was like climbing Everest. No one wanted to put money behind a jailbird. No one wanted to grant him a liquor license. Rivals from the nightclub world accused him of grassing them up to the tax authorities. Then there were the whispers about the Mob, namely that Schrager's father had been an associate of the notorious racketeer Meyer Lansky. That still hurts, says Schrager.

Was it true? 'I don't know anything about it,' he says, looking rather helpless. 'I don't think it is.' What he does know is that his father would hate his name being dragged through the mud.

So he's been through the grinder and still has something to prove. Friends say he craves acceptance by the business establishment. He is a competitive man, and hated being dismissed by the big hotel groups as someone who just did 'trendy' hotels in New York. 'People used to say that the only people who went to my hotels wore black and lived in SoHo,' he shrugs. He was only taken seriously once he set up in LA and Miami. Now he wants Europe, so that people understand he is a real player.

And he is thinking about other schemes, plotting them from his base at New York's Paramount, where he works with his ideas pinned up on the walls around: tearsheets from magazines - he loves glossy mags - drawings and photos. The current phase of expansion is enormous: as well as the St Moritz, Henry Hudson, Empire and Barbazon hotels in New York, Schrager is redeveloping the Miramar in Santa Barbara, the Ritz Plaza in Miami Beach and opening the Clift in San Francisco. Then maybe he is going to start selling Schrager linen and furniture on the internet, or maybe he will buy a cheap motel chain, trying to produce something special and edgy for around $45 a room.

What drives him on? Fear, mainly, that he is going to be overtaken by others - a fear engendered by those highly competitive years in the New York nightclub market. 'I don't want to be the man who invented McDonald's only for Ray Kroc to take the idea and do it,' he says, citing the burger baron who, famously, took someone else's neat concept and rolled it out into his own multi-billion dollar, world-beating operation.

And fear that his knack might just disappear. Certainly, the more he adopts the lifestyle of the multimillionaire business whizz - the gorgeous, young wife and family, the many million dollar home he's building in Manhattan, the big house on the beach at Southampton in Long Island - the more anxious he seems to be that his touch may some day slip.

'If I ever lose my contact with the street, and lose who I am, and turn what we do into an intellectual exercise, then I will fall flat on my face,' he says at one point.

'But I am still hungry, I still care, here I am at the property, sitting here like I am waiting for a birth to happen. I don't have to be, I could say "Call me when it's ready, I'll come take the bows." But really that's not me.'

He doesn't miss anything from the nightclub days?

No, he hates all the stuff about the drugs and the sex that's been hashed up in recent films. He'd rather leave that behind. The only thing he really misses, he says, is his old partner Steve. 'He was a really, really bright guy, yunno? I used to turn around after we had done something and say, "Hey Steve, is it good, do people like it?" and he would know and I would trust him.'

For a moment his face clouds over. In his head, he says, he is still having the same dialogue, walking round the hotel, notebook in hand, looking for things to make better. Hey Steve, is it good? Do people like it?

And would Steve have liked St Martins Lane?

'Yeah, I think he would,' says Schrager. Then he brightens up. 'Hey, I haven't shown you the interactive lighting yet...'