Lucrative Deal
Owners of the Park Savoy, a no-frills hotel that’s gotten middling reviews on travel websites, would receive $2.6 million in annual rent payments from the city for the duration of the shelter contract. That’s not a bad deal for a hotel landlord in Manhattan, where revenue per available room fell 0.5 percent in 2017, according to lodging-data firm STR Inc.
“It definitely takes the volatility out of your math,” by eliminating the costs of marketing or selling discounted rooms through online travel sites, said Jan Freitag, senior vice president at STR. “You’re getting paid for a non-discounted room, and you don’t have distribution costs if you do a direct deal with the city.”
Paul Pappas, identified in building records as the managing member of the entity that owns the Park Savoy, didn’t return a call or email seeking comment.
Mastro, the coalition’s lawyer, said the group is exploring all legal avenues to challenge what it views as a poor use of public funds.
“That the city decides to spend $50,000 per person -- far more than has ever been spent before -- when its resources are constrained, and then tell the public that it’s basically a fait accompli, that’s not only intolerable,” Mastro said, “that’s illegal.”
This article was provided by Bloomberg News.