NEW YORK: Federal Aviation Minister Khawaja Saad Rafique in a press conference on June 4 defended and praised the decision of the federal government to hand the Roosevelt Hotel owned by the PIA Investment over to the New York city administration on lease for three years. He said the government’s decision had saved a national asset of the country. However, it would have been better had the federal minister shared with the journalists present in the press conference copies of the official agreement inked with the New York city administration. In that way, it would have been easier to analyse the pros and cons of the decision and foresee the future of the Roosevelt Hotel.
The 19-story hotel named after a former American president was constructed in 1924. After passing through various owners, the landmark hotel came in the possession of the PIA in 1978 on lease. The national carrier bought the hotel in 2000. The story of the hotel, which was closed during the Covid-19 pandemic, from 1978 till 2000 is marred with tales of greed, mismanagement, financial irregularities and embezzlement and such reports are saved in the archives of Daily Jang and The News. This analysis is about the pros and cons of the recent decision to hand over the hotel on lease for three years so that the claims of the federal minister may be verified or negated. In this regard, some facts and some questions are stated below so that the real owners of the hotel, the people of Pakistan, can form an informed opinion. 1. During the government of Imran Khan, the Roosevelt Hotel was closed on the pretext of the Covid-19 pandemic. However, even then some influential Pakistanis tried to derive financial benefits from the hotel but could not succeed. Now, after remaining closed for over two years, the hotel has been acquired by the New York city administration on May 15 under a three-year agreement. The city administration plans to utilise the building to accommodate foreigners seeking asylum as well as those who enter the United States illegally from South American countries and other countries.
In the first phase, 175 rooms have been prepared in the hotel, which has more than 1,000 rooms and is adorned with beautiful windows. All the remaining rooms are to be prepared for accommodation in a phase-wise manner.
2. Neither the federal aviation minister nor the PIA Investment seem willing to disclose the lease agreement and its details. Similarly, the New York city administration also appears not willing to disclose the agreement.
However, this can be construed that in the next three years, the hotel’s building and its standards would face degradation as it would be used by illegal immigrants coming from impoverished countries who would have no acquaintance with the American lifestyle.
It is proved that other buildings that are being used for the similar welfare purposes have downgraded and turned messy and the crime rate increased in their areas.
The Roosevelt Hotel, which is situated in a historic and expensive locality of New York, is a property worth approximately $700 million. After three years, the hotel would have lost its current reputation and value, and millions of dollars would be required for its renovation and decoration.
With the agreement not available so far, the information circulating in New York suggests that a large chunk of the rent that would be collected in the three years would be spent on clearing the dues of its employees as per an agreement reached with their union. After this payment and meeting other requirements, the PIA would only get $8 million in three years. The federal minister can verify or deny this figure.
Apparently, the total rent earned during the three years would be $225 million but after clearing the dues of employees and covering other expenses, what amount will the PIA get?
3. According to the information available, the New York city administration will have the right to cancel the lease agreement after 18 months. In that case it is not clear how the building would be used.
The Jang correspondent has been trying to get the text of the agreement from the New York city administration. If the document becomes available, more revelations and details may surface.