A Gamble on Manhattan

The millions of people who think that New York City is a nice place to visit--even if they wouldn't want to live there--normally keep the city's hotels as busy as any in the world. But rising costs and the business recession have driven many New York hotels into the red. In the first three months of 1971, their occupancy rate sank to 65%, the lowest in eight years. One of the few hoteliers who remains undaunted by that gloomy statistic is Real Estate Operator Harry Helmsley. This month he boldly opened Manhattan's first new hotel since 1965: the Park Lane, a $30 million tower overlooking Central Park.

Snob Appeal. Helmsley's gamble on the Park Lane is all the more remarkable because it ignores the hotel industry's growing reliance on conventions and banquets as a primary source of revenue. Like its older Manhattan neighbors, the Plaza, St. Regis-Sheraton and Pierre, the elegant Park Lane is designed mainly to lure well-heeled individual travelers, whether they are in New York for business or pleasure. Helmsley spent nearly $50,000 for each room, many of which are lavishly decorated with original paintings. Overnight rentals vary from $32 for a single to $140 for a two-bedroom suite. Says John Mados, director of Helmsley's hotel operations: "You won't find any men with funny hats and name badges in my lobby." The snob appeal may pay off: hotels charging $30-and-up per night have suffered less from the slowdown than those with more economical room rates.

Helmsley, a tall, spare man of 62, is used to taking risks in real estate, and has done well enough at it to become owner of the firm (now called Helmsley Spear) that hired him in 1926 after he left high school. He is one of the nation's largest real estate operators. Helmsley either manages or has an interest in properties worth $2.5 billion, including Manhattan's Empire State Building and Tudor City apartment complex, office buildings in Chicago and Detroit and apartment houses in Los Angeles, Houston and San Francisco.

Canyonized City. Despite the recent moves of several major corporations out of New York (TIME, April 26), Helmsley is convinced that his native city is still a good investment; he currently has interests in newly rising buildings that will add 3,300,000 sq. ft. of office space to the canyonized city. "The companies that are moving out are being replaced by new companies and by expansion of old ones," he says. Other builders agree: fully 25% of the office space currently under construction in the U.S. is located in Manhattan.

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