PIA’s Roosevelt Hotel Leased out to NYC for Three Years against $220 Million

Lahore: The government has finally leased out its precious asset in the United States —Roosevelt Hotel, a property of the Pakistan International Airlines (PIA) — to the New York City Administration for a period of three years against USD 220m.

A contract has also been signed between the government and the NYC administration/government, according to Federal Minister for Railways and Aviation Khawaja Saad Rafique.

“After various exhaustive exercises, we finally succeeded in finding a way out to overcome the challenges to the country’s most precious asset/heritage in New York (USA). So, we have signed a contract with the NYC administration that will operate the hotel for a period of three years. Under this contract, we will receive US $220m that will enable us to clear the hotel’s various liabilities besides earning handsome revenue for our country’s treasury,” the minister said while talking to journalists at a press conference here on Sunday.

“Since our property was already facing a threat of being landmarked, this contract has also saved it from such a big threat. Had the hotel fallen into the landmarks category, we would have been restricted to use it for the hotel purpose with the current 19-storey building alone that, after coming out of this danger, can now be used for a high-rise up to 40-storey with change of business,” he maintained.

Sharing further details of the contract, he said, the three-year term included a guaranteed-income for a period of one-and-a-half years. In the last few days, the possession of 600 of the total 1,025 rooms had been handed over to the NYC government and the possession of the remaining 425 rooms would also be handed over to the authorities in NYC within the next 30 days. Under the contract, according to him, the room charges for the first year would be USD202, followed by USD205 in the second year and USD210 in the third year. Moreover, the hotel, which is about 100 years old, would be handed over to the government of Pakistan (PIA/Civil Aviation Authority) after three years in the same condition as of today.

Talking about the background to the property, the minister said, the hotel was closed in 2020 (Covid time) and its expenditures (during its closure) were US $25m per annum. A liability of US $20m already existed on part of the hotel. Moreover, the hotel union, considered very powerful in NYC, was also demanding US $66m. The danger of being put into the category of landmarks was also looming over the property.

“Keeping in view all this, our predecessors (the PTI government) decided to run the hotel under the public-private-partnership (PPP), which was the right decision. But it couldn’t do so, so the PDM government inherited this issue and finally resolved it,” Mr Rafique said.

“It is really a wonderful contract that has benefitted our government,” he claimed… - Dawn