New York's Four Seasons hotel in dispute with Beanie Babies mogul - and could stay closed for years

New York’s Four Seasons hotel in dispute with Beanie Babies mogul – and could stay closed for years

New York’s Four Seasons Hotel has remained conspicuously closed since the start of the pandemic – and insiders say it is likely to remain closed for years due to an increasingly bizarre dispute with the billionaire founder of the Beanie Babies toy empire.

The luxury icon designed by architect IM Pei at 57 East 57th St. — whose lavish Ty Warner penthouse suite was charging $50,000 a night before the hotel closed in March 2020 — now looks like an abandoned building.

The grand, Art Nouveau-inspired entrances to the 54-story tower are blocked off with metal pedestrian barricades. The flags of the French limestone facade are taken down and the windows are covered with brown paper and advertising posters.

This is despite the fact that all of the Four Seasons’ luxury rivals – The Ritz-Carlton, The Palace, the St. Regis, The Carlyle and the Mandarin Oriental among them – reopened more than a year ago, and would have done solid if not spectacular business as demand for luxury travel returns.

An abandoned Four Seasons, with a person sitting on the ledge of the shop window.
The entrances are barricaded and the shops’ once-chic windows are covered in brown paper.
Helayne Seidman for the NY Post
The Four Seasons Hotel on E. 57th St. has been closed since March 2020.
The Four Seasons Hotel on E. 57th St. has been closed since March 2020.
Helayne Seidman for the NY Post

Neighbors are skeptical of a claim on the Four Seasons website that the landmark in Midtown Manhattan is ‘temporarily closed as it undergoes major infrastructure and maintenance work that is expected to last through 2022’ – a parlance in place since last fall, even as the hotel told union representatives, it was aiming to reopen in the spring of 2022.

“I’ve never seen trucks parked outside the building carrying stuff,” said August Ceradini, who operates Eight and a Half, the swanky restaurant in the lobby at 9 West 57th St., the tower of chic offices nearby. “There’s not the type of activity that suggests they’re rebuilding something inside.”

In fact, sources told the Post that the hotel has been held hostage by an epic contract dispute between management company Four Seasons and Ty Warner, the reclusive toy magnate who owns the swanky skyscraper. The problem is, the hotel has been losing money for years — even before the pandemic hit, according to property records.

Ty Warner leaning on a balcony.
Ty Warner bought the NYC Four Seasons property in 1999 for $275 million.
Corbis via Getty Images

Warner — a former door-to-door encyclopedia salesman who made a Forbes-estimated $3.8 billion fortune organizing the Beanie Babies plushie craze in the 1990s — balked at the high maintenance fees demanded by the Four Seasons, the sources said. In response, the hotel chain denied its request to adjust its fees to be commensurate with the hotel’s profitability or lack thereof, the sources said.

“It’s clear that Four Seasons and Ty Warner are not very much in agreement, which makes it difficult to come to an agreement and move forward,” said a source with knowledge of the situation.

Warner and the Four Seasons – which owns none of the more than 100 hotels worldwide under its banner, but operates them for different owners – have been in talks for about 18 months under a clause in their contract covering dispute resolution, keeping secret negotiations out of public view. It is not uncommon for such cases to take years to resolve, industry experts told The Post.

The entrance to the hotel in better days.
The hotel was once the most expensive in Manhattan, charging well over $1,000 per night.
Seth Gottfried

“It’s in limbo…he’s not selling the building,” another hotel insider said of Warner, estimating it would be three to four years before the hotel opened. “It’s not an owner in distress and Four Seasons has a management agreement and they’re at war.”

As travel returns to the Big Apple, industry insiders wonder if the city’s most expensive hotel will ever regain its stature. As The Post previously reported, the extended shutdown is fueling speculation that the 78-year-old Warner tried to wriggle out of his long-term deal with Four Seasons. Industry insiders say it would likely be a tough climb.

“The owner is burdened with a deal – he can’t throw them away and choose Rosewood or Dorchester,” a hotel insider told the Post, referring to the owners of the Carlyle and Beverly Hills Hotel in Los Angeles, respectively. .

“To me, what’s more interesting is how people can have such an amazing asset and just keep it there,” the source added.

Ty Warner surrounded by Beanie Babies.
Ty Warner became a billionaire in the 1990s from Beanie Babies.
Getty Images

A representative for Ty Warner did not return calls and emails for comment. Four Seasons Hotels and Resorts also did not respond to requests for comment.

Warner bought the property in 1999 for $275 million – just seven years after the hotel opened at a cost to its developers of $475 million. At the time, the hotel was generating $30 million a year in operating revenue. But business has had a bumpy road since, several industry insiders told the Post.

“Ty didn’t like the way Four Seasons was running the hotel because he wasn’t making any money and that was the genesis of the whole argument between them,” said Ceradini, a veteran hospitality executive and former manager of the St. Régis Hotel. “From what I understand of Ty Warner’s personality, he won’t stop until he gets what he wants.”

According to city records, the Four Seasons lost money in 2018 and 2019. According to Sean Hennessey, a professor at York University’s New Jonathan M. Tisch Welcoming Center.

“There are few things that make an owner more upset than when the property is not generating any profit while the manager is being paid handsomely,” Hennessy said.

Ty Warner in a suit and tie.
Ty Warner and Four Seasons Hotel and Resorts are said to be locked in a bitter dispute over the terms of their contract.
Tribune News Service via Getty I

Another problem, according to an industry source: “The Four Seasons has a lot of rooms. They are big, and it is difficult.

Hotel workers have meanwhile sued Warner and Four Seasons, claiming they were ‘deliberately blocking the reopening’ to avoid paying millions of dollars in unpaid wages and severance pay, according to the proposed class action lawsuit filed. in lower Manhattan federal court in August.

A similar lawsuit was filed in February in Santa Barbara, Calif., by employees of Warner’s still closed Biltmore Hotel – also a Four Seasons property – leading some to speculate that Warner is waging a ” guerrilla war” against Four Seasons, according to a report by the Santa Barbara Independent. Biltmore’s 450 employees say they are owed up to $8 million in severance pay.

The hotel is closed “for reasons other than what they present to the complainants,” the New York complaint alleges, noting that the hotel has undergone multiple renovations over the years “and has never been closed to clients”.

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