Leonard Grunstein Works to Enable Sale of Hotel Pennsylvania

The Hotel Pennsylvania, located across the street from Pennsylvania Station and Madison Square Garden, opened in 1919. An immediate sensation, the Pennsylvania’s 2,200 rooms made it the “largest tavern in the world,” offering guests luxuries such as the “servidor” – a small compartment built into bedroom doors for deliveries; ice water in every room; and a number of private and public cafes, dining rooms and ballrooms.

The 27-story tower was designed by McKim, Mead and White as a complement to the original Pennsylvania Station, which stood across 7^th Avenue until 1963. The firm – established in 1879 by Charles Follen McKim, William Rutherford Mead and Stanford White – was essential in popularizing the Beaux-Arts aesthetic in New York, making its mark throughout the city with buildings such as Columbia University’s Low Library, the Brooklyn Museum and the Manhattan Municipal Building.

Statler Hotels, which had managed the Hotel Pennsylvania since its construction, acquired the property in 1948 and changed its name to The Hotel Statler. Over the years, as ownership changed, the hotel was renamed three more times, finally returning as the original Hotel Pennsylvania in 1992 when Penta Hotels, the owner at the time, filed for bankruptcy.

Six years later, Vornado Realty acquired the property in a $160 million joint venture with Planet Hollywood and Ong Beng Seng, a Singaporean hotel development and investment firm. Within two years, Vornado had purchased the remaining 60 percent stake from both partners, valuing the hotel at $210 million.

Over the years, as Vornado negotiated plans for redevelopment, the Hotel Pennsylvania fell into a state of disrepair. Following strong opposition from the community and local preservationists, the company abandoned plans to demolish the building and replace it with an office tower, choosing instead to renovate the existing structure and invest to make the hotel profitable again.

As a partner at Herrick, Feinstein, Leonard Grunstein helped create the unique financing and tax structures that enabled the sale of the Hotel, as noted above.

Tagged: Herrick Feinstein, Hotel Pennsylvania, Leonard Grunstein, Madison Square Garden, Pennsylvania Station, Vornado Realty