LAS VEGAS — The Hospitality Show, held here this week at The Venetian Resort Las Vegas, held a second day of tech and operations sessions, coupled with adjunct activities on the trade-show floor for the more than 3,500 attendees at the inaugural event produced by the American Hotel and Lodging Association and Questex, parent company of Hotel Management Magazine.
On the final day of THS, AHLA President and CEO Chip Rogers and MCR Hotels Chairman and CEO Tyler Morse sat down to discuss “The Art of Public/Private Partnerships” in a casual Q&A. MCR, an owner/operator in the United States with more than $4 billion in hotel assets under management, has been involved in a number of creative concepts that require innovative deal structures and public/private partnerships. One in particular made headlines several years ago when Morse fixed his sights on reinventing the iconic TWA terminal designed by architect Eero Saarinen and Associates at John F. Kennedy Airport in New York, with hotel space in mind. While eventually successful in the pursuit, the road there was not the easiest one, Tyler indicated.
“I love the building but it’s a tortuously complex entitlement process,” Morse told the audience. “We dealt with 22 government agencies, we had nine law firms working on the project, 176 consulting firms. We had to deal with eight federal agencies, the Secretary of the Interior, the FAA.”
Still, Morse and MCR weren’t deterred and were able to open the hotel—the first in-airport one at JFK—in May 2019, with 50,000 square feet of event space, 500 meeting rooms and 512 guestrooms.
“We built it so you would feel like you’d walked into 1962—without cigarette smoke,” he said, adding: “We actually trademarked the year 1962 for the project (the terminal was erected between 1959 and 1962, when it opened).
Another such project was the transformation into the current High Line Hotel of the General Theological Seminary of the Protestant Episcopal Church, founded in Manhattan in the 1800s on land donated by real estate developer Clement Clarke Moore, also the author of the famed poem “A Visit from St. Nicholas.”
Morse noted it was a law from 1811 that established what’s known as the Manhattan grid that enabled MCR to acquire the property. “The East/West streets are residential, the North-South streets are commercial and that law from 1811 is the only reason we could buy [the site] because the commercial overlay gave us the FAR (floor area ratio) we needed,” he said.
Acquisitions
MCR proved to be an opportunistic buyer of assets during the pandemic as well, acquiring 75 hotels. “We invested about $3.5 billion … we bought everything that wasn’t nailed down,” Morse said.
With so much activity, Rogers asked the executive how much of a factor local politics, local public policies play in a deal decision.
“It very much does,” said Morse. “You’ll notice we have very few hotels in California. It’s a very difficult state to invest in because the laws keep getting worse, workers’ comp keeps getting stratospherically more expensive; far outstripping inflation. There are labor issues.”
That said, Morse stressed he loves doing challenging projects. “Ones that other people say can’t be done. Those are the special ones and those are the unique ones … you gotta have a spine if you’re going to go for it,” he said, noting without going into detail that MCR currently has five projects in the pipeline, including billion-dollar projects in London, New York and Los Angeles.