Be sure to check out Chris Shott’s piece in The New York Observer about BD’s shameful attempt to evict a dying man, Jann Paxton. So what about it Marlene? Is it so important to win your war against Stanley Bard that you’re willing to abandon ever last shred of common decency? We think that, as a show of good will, you should at least pledge not to evict Jann Paxton. — Ed Hamilton
Living with Legends
Hotel Chelsea Blog
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Things are getting a little bit ridiculous here at the Chelsea. This powerful, egomaniacal businesswoman, Marlene Krauss, who should have better things to do with her time, has, for the past 20 years, been engaged in a mindless and destructive Vendetta against the majority shareholder and former manager of the Chelsea Hotel, Stanley Bard. Recently, with the aid of BD Hotels, Marlene was able to oust Stanley from the position he had held for almost 50 years. Time to uncork the Champagne, right, Marlene?
Surely you jest. For we have reason to believe that Marlene is still going after Stanley, apparently determined to dig up the dirt on him—whatever that might turn out to be—in order to force him to sell his beloved Chelsea. Marlene apparently so hates this small, elderly man–with an unreasoning ferocity bordering on psychosis–that even the wholesale demolition of the Chelsea is unlikely to sate her unholy bloodlust. Will she rest when Stanley is thrown into prison to spend his last few years scrapping with young toughs and busting up rocks in a quarry? We doubt it. Even when Stanley is dead and buried, we expect Marlene to dig up his bones and grind them to dust with a mortar and pestle—to season her foul witch’s brew.We have come to believe that the feud with Stanley is the root of Marlene’s disagreement with BD. She wouldn’t let them do their job because she was more concerned with using this place to get back at Stanley. Since BD—though hardly known for their good works–wouldn’t cooperate to this end, they’re out of here. (We’ll have more on this in a later post.)
So where does that leave the tenants of the Chelsea? Well, obviously, right smack dab in the middle of the battlefield. Now we have no manager! Can you believe that?! Nobody’s running the place at all. Nobody is making up the schedule for the workers, and nobody is here to pay them. And what if there’s a fire, or some other kind of emergency? Who’s going to make sure that the residents get out safely? All kinds of transients and other strangers are in and out of this building every day. Some of them may be crazy, or on drugs. Who’s going to deal with such potentially explosive situations?
Anyway, regardless of Stanley’s supposed sins, why should we residents have to pay for them? Is it just because we respect him and want him back? Or is it that Stanley was the one who brought us into the Chelsea, and Marlene won’t rest until she wipes every last vestige of his influence from the building?
Stop it, Marlene! Back off. Enough’s enough. If you can’t bring yourself to return the Chelsea to the Bards, then at least hire a manager who will run the place the way it should be run: as the haven for the arts it has been for 125 years. — Ed Hamilton
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BD Hotels sued Arthur Nash in housing court, alleging that his apartment was not rent stabilized. But last week, when the judge asked BD to provide evidence to that effect, they couldn’t do it, and didn’t even try. Arthur, on the other hand, had a letter wherein BD admitted that another Chelsea Hotel resident was rent
stabilized. The judge took one look at this letter and threw the case out. (He dismissed the case with prejudice, which means that BD can refile if they come up with new evidence, but chances are they won’t be able to.)
Arthur’s case is important for another reason as well, because he represented himself, and it shows that tenants don’t need to back down from BD and their high priced lawyers. Judges in housing court don’t necessarily expect tenants to have lawyers, and they are likely to be reasonable if you do your homework as Arthur did, and know your rights.
Artie weighs in "… Krauss and Elder’s attorneys came on with bullying tactics and it was under this pressure at least a half dozen residents i’m aware of left the hotel. there are probably more. But from the start their case consisted of a bluff; they got called on it and crumbled, actually admitting to [Judge Wendt] they had no proof to support the claim that has had us in courtrooms, researching and writing legal motions since last november. Moreover opposing counsel conceded they’d be unlikely to find that proof in the future. Some would call this type of lawsuit ‘frivilous’. If there is a ’round two’, the only consolation might be that we’d get to use the rest of the research in support of our counterclaims." -
I went to the arbitration hearing today and it was cancelled. According to BD’s attorney, BD has withdrawn its petition which was seeking to block their termination. So BD is no longer in the house!
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No one from BD has shown up yet at the Hotel as of 9:30 a.m. Reportedly the locks on the manager’s offices have been changed. Maybe Marlene Krauss can send in some armed guards to keep them out like she did the Bards. We’re afraid they might cart off pieces of the famed staircase.
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Legends has managed to obtain a copy of the arbitration filing that will ultimately determine who will manage the Chelsea Hotel. What happened in this case is that BD filed suit against the hotel (essentially Marlene Krauss, since she is the one running the show), alleging that Marlene fired them without cause, and that she has failed to pay them the Incentive Fee that she owes them.
In a March 14, 2008 letter, Marlene (through a lawyer) charged BD with “Default and Willful Misconduct.” The “default” charge means they didn’t perform certain of their duties (for instance, perhaps, as we speculated in last Thursday’s post, they didn’t renovate rooms as they were supposed to); as for the “willful misconduct,” that, too may involve some of the problems we discussed on Thursday. We will have to wait until we can get copies of the supporting documents in the case to know for sure what Marlene alleged.
Anyway, Marlene used these charges to justify firing BD, and also for withholding BDs Incentive Fee, which BD claims (and they say Marlene agrees) is a whopping $2,717,285! Marlene gave BD a month to leave the hotel, which means they should have been out by April 14, but they will apparently continue to manage the hotel (at least this is what they say) until the arbitration case is decided.The case is scheduled to be heard on Monday May 5, although, of course, a decision probably won’t be reached for awhile.
(The document also reveals BD’s astonishing claim to have increased net operating income of the hotel by 225%, revenue per available room by more than 35%, occupancy from 73% to 88%, and room nights sold by 41%.) — Ed Hamilton
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Artie Nash has won his case against BD’s lawyers! Guess those banners won’t be going anywhere after all. We’ll post an interview with Artie a little later.
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So guess what, a real reporter — as opposed to electronic kind — has had the sense to go down to the courthouse and look at the papers. Chris Shott of The Observer reports that Marlene has fired BD for "willful misconduct" (wich no doubt includes some of what we discussed yesterday.). BD, in turn is suing the Hotel for $2.7 million in "incentives" it says it is owed for increasing the hotel’s profits 225%! Wow — and they said Stanley was cooking the books! I wonder where all that new revenue could have come from. Certainly it couldn’t have been from renting rooms, since they slashed the rates. Must be from that new spa in the basement and that rockin’ club on the roof — you know the one with the new express elevator jetting the hipsters skyward. — Ed Hamilton
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We have received reliable information to the effect that, as of May 5, BD Hotels will no longer be
managing the Chelsea Hotel. They have reportedly been fired by minority shareholder Marlene Krauss, Harvard MBA, who, together with lobby layabout David Elder, controls the Chelsea’s Board of Directors. (Alternately, it’s possible that the courts may stall the transition: though Marlene has already sent BD a termination notice, they are contesting it.) (Photo of the hoteliers during happier days. As usual, David Bernstein is missing.)Sub-Prime Crisis Derails BD’s Plans
To the best of our knowledge, here’s what happened: BD, with the connivance of the minority shareholders, had planned all along to buy the Chelsea Hotel. To accomplish this they needed a smoking gun to pressure the Bard Family into selling the building. But apparently Stanley ran a pretty tight ship: teams of accountants working 24-hours-a-day could find no such smoking gun. So the Bards have no reason to sell. And now, due to the sub-prime crisis, BD Hotels—which we hear had a chunk of its assets financed by Bear Stearns — has no money to buy the building anyway. So the “two guys with cell phones,” Richard Born and Ira Drukier (who own BD), have been forced to retrench in order to focus on their leveraged properties, and now will have their hands full simply managing the buildings they own. They can’t afford to buy any new buildings at this point.
Marlene’s Beef
Over the course of BD’s tenure, plumber’s daughter turned corporate raider Marlene Krauss has reputedly had several general complaints:
1. No one from BD does any work (this is directed specifically at Director of Operations Glennon Travis, who sits in his office all day and rarely takes an active role in hotel operations, or in addressing guest’s and resident’s concerns)
2. The supposed general manager, David Bernstein, is rarely on the premises
3. BD is not fixing up the hotel. In particular, BD is not renovating rooms, as promised, but merely warehousing them
4. The hotel is reportedly losing money (or at least not making as much as it did under Stanley Bard), due to the slashing of room rates, and also, in part, to residents withholding rent
Besides these general complaints, in the past week Marlene has had to come to the hotel repeatedly to micromanage the repair of a resident’s apartment. That, together with a few other things that we’ll discuss in a future article, appears to represent the straw that broke the camel’s back.
Fife to Head Chelsea
If our sources are as reliable as we believe them to be, good riddance to bad rubbish. The ass-clowns of BD have truly been the Marx Brothers of hotel management, and we’ve all had a good laugh, but now it’s time to move on. Which brings us to the next question: who will Marlene hire to manage the hotel now? She promised the rest of the shareholders that they would make more money with Stanley out of the picture, but instead they are losing money. She’d better make the right choice this time.
We can’t read Marlene’s mind, but the rumor—nearly unbelievable, and we hope it’s not true—is
that she intends to appoint David Elder as manager of the hotel! So here’s the story: we are going from this (supposedly) elite hotel firm that was going to transform the Chelsea into an exclusive boutique hotel, to a complete nincompoop and moral midget with absolutely no experience doing anything, much less managing a large Manhattan hotel. (Elder’s “job” at the Chelsea seems to consist of hanging out in the lobby, occasionally attempting to coax members of our community into spying for him. For the past few years he has been engaged in a court battle with his stepfather, noted Author Piri Thomas, attempting to deny the elderly man his dividends from the Chelsea Hotel.) If BD wasn’t qualified, then how is this lunkhead—who apparently is being manipulated by Marlene and various lawyers– going to do the job?Obviously, Marlene thinks she can continue to control Elder, but we’re not so sure; we think she may be creating a monster. If Elder is manager, will he be the one reporting the profits? Taking into consideration what he’s doing to Piri Thomas, what makes Marlene so sure she can expect to collect her dividends?
Haven’t the residents of this hotel been through enough? Please, don’t torture us like this, Marlene. This is going to be like the episode of The Andy Griffith Show where Barney Fife gets to be Sheriff for the day. Only, I fear, without the laughs. "Nip it in the bud!" — Ed Hamilton
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Artie has a new banner to celebrate the news! We’ve all heard that Marlene Krauss has handed BD their walking papers. Check back for more details as they become available. Read the posts from earlier this week to catch up on what you’ve missed.
Living with Legends 
