ISLAMABAD, Wednesday, July 15, 2020 (WNP/DL): As the government goes about deciding which line it should eventually take to turn the PIA-owned Roosevelt Hotel in New York into a profitable entity, the luxury property has piqued the interest of a name all too familiar in American real estate: Donald Trump.
The revelation came as a top Pakistan International Airlines (PIA) official informed the National Assembly Standing Committee on Privatisation on Wednesday that the United States president is interested in purchasing the hotel, located in New York’s Manhattan borough.
At the outset of the meeting, committee member Khawaja Asif of the PML-N inquired from PIA officials whether anyone had shown interest in buying the property. Asif, a former foreign minister, then noted that Trump had wanted to purchase it.
At this, PIA Investment Limited Managing Director Najeeb Sami disclosed that the American president “is still showing interest in Roosevelt”.
Billionaire-turned-president Trump already owns seven luxury hotels and several resorts and clubs in a number of major cities across the US, according to The Washington Post.
In his briefing to the committee, Sami said that Roosevelt is a three-star hotel which had been profitable for 99 years. However, the hotel suffered a loss of $1.5 million last year, the official added.
He said it was not profitable for PIA to run the entire hotel on its own and it should, therefore, be replaced with offices and hotels.
“It has been decided to give Roosevelt Hotel on lease on a long-term basis,” Sami told the lawmakers.
Earlier this month, the Cabinet Committee on Privatisation (CCoP) had decided against selling off the Roosevelt and to run it through a joint venture instead.
The CCoP had directed the Privatisation Commission to appoint a financial adviser to start the process for the transaction in light of a report by accounting firm Deloitte from July 2019 which recommended that “the highest and best use of the Roosevelt Hotel property is to redevelop the site into a mixed-use [property] (through joint venture) of primarily an office tower over retail and condominium.”
Asif said although his party did not oppose privatisation “at all”, this wasn’t a suitable time to privatise any entity because the coronavirus pandemic has caused market prices of almost everything to fall.
He said the rights of employees should be protected whenever privatisation is carried out and they should be provided enough funds to start their own businesses. People who own real-estate businesses abroad should not be made part of the body deciding the hotel’s fate as it could lead to corruption, Asif added.
The PML-N lawmaker observed that PIA itself could not be privatised in the current circumstances either. He acknowledged that it was a “mistake” on PML-N’s part that it remained unable to privatise the national flag carrier during its tenure.
Privatisation Minister Muhammad Mian Soomro informed the committee that various options were currently being looked into regarding the fate of the Roosevelt, adding that a financial adviser will take the decision regarding leasing out the hotel.
The PIA-owned 19-storey hotel with 1,025 rooms plus allied facilities in New York is considered a valuable property that also carries cultural significance for Pakistan. It has remained in the news for the last several years over its proposed auction. However, the management of PIA in the past had always rejected the claims of auction, etc.
The hotel was acquired by PIA Investment Limited on lease during the year 1979 with an option to purchase the property. The airline had purchased the hotel for $36.5 million against a demand of $59.5m by contesting a lawsuit against the owner in 1999. The Roosevelt has been managed by Interstate Hotels & Resorts since 1997.