The six Villard Houses were commissioned in the 1880s by
Henry Villard, then the president of the
Northern Pacific Railway. The houses took six years to build. They served as the family residences of several prominent New Yorkers through the late 19th and early 20th centuries. In 1968, the
New York City Landmarks Preservation Commission (LPC) designated the Villard Houses as official landmarks, preventing them from being modified without the LPC's permission. The Archdiocese of New York bought number 457 in early 1971 and moved out of the entire complex two years later. At the time, the archdiocese said it hoped to find a lessee for the Villard Houses rather than sell them.
Planning and construction Initial plans In early 1974, the archdiocese was negotiating to sell developer
Harry Helmsley the
air rights above the Villard Houses. The transfer of air rights would allow the tower to be taller than would be usually allowed. The rear portion of the Villard Houses' center wing would need to be demolished, as well as part of a 1909 addition to the south wing. The arcaded entrance to the Villard Houses' center wing would be walled off. The north and south wings would remain unchanged and would not be part of the hotel. The LPC scheduled a meeting to discuss the plans in December 1974 because any alterations to the houses needed the agency's permission. Architectural writer
Ada Louise Huxtable said the proposal was "a death-dealing rather than a life-giving 'solution'". By late 1974, the archdiocese had leased all of the Villard Houses to Helmsley for 99 years at around $1 million per year. In January 1975, the LPC approved Helmsley's hotel proposal in principle but objected to some elements of the design. Roth's original plan had called for vertical travertine marble piers rising the height of the tower, which would be connected at the top by arches. The original iteration of the hotel plan entailed demolishing the Gold Room in the south wing, to which
Community Planning Board 5 objected. A Helmsley-Spear vice president said the hotel's plans included a lobby on a lower elevation than the Gold Room and that, due to the slope of the site, the room would have to be demolished to make way for the lobby. Following these objections, Helmsley presented a modified plan in June 1975, designed by the Roth firm. Huxtable spoke negatively of the revised plan, saying: "By any measure except computerized investment design, the results are a wretched failure." The same month, Planning Board 5 requested the archdiocese release records of its finances so the board could determine whether the archdiocese was allowed to lease the Villard Houses to Helmsley under a "hardship" preservation. The
New York City Board of Standards and Appeals scheduled a public hearing for Helmsley's plan in July 1975. Just before the hearing was scheduled to occur, it was postponed to September because the archdiocese had not sufficiently advertised the hearing. Helmsley almost quit the development entirely because of these delays.
Further revisions and approval The first economic details for the hotel were announced on August 31, 1975; at the time, the 725-room hotel was expected to cost $42 million. The Villard Houses were placed on the
National Register of Historic Places on September 2, which restricted the use of federal funds to demolish any part of the houses without federal approval. Several days later, Helmsley presented yet another proposal for the hotel and withdrew the previous plans for the hotel. The new plans preserved the Gold Room as a cocktail lounge. The archdiocese hired William Shopsin in January 1976 to conduct a historical survey of the Villard Houses. Shopsin recorded the houses' existing design components for the
Historic American Buildings Survey. The commission released draft legislation in early June 1976, which would enable the hotel to build 15–18 percent more interior space than would be normally allowed. Later that month, Helmsley presented his updated proposal for the hotel, which had been reduced to 51 stories. There would be 775 rooms, but the amount of office space had been reduced by three-fourths. The hotel plans had been downsized because of the city's poor economic condition at the time. By that July, Helmsley and the archdiocese had agreed to preserve the Villard Houses' exterior and partial interior. The public would be able to access "significant interiors" such as the Gold Room, and restrictions would be placed on how these "significant" spaces could be used. Despite the opposition of two community planning boards, the City Planning Commission had ended all public comment on the hotel plan by September 1976. The commission approved the hotel on a 5–1 vote that month. The hotel received unanimous approval from the
New York City Board of Estimate that October. The final plans called for 31 stories of hotel rooms and stories of residential apartments. Darcy Lewis of the Society Against Villard's Extinction (SAVE), which opposed the hotel, called it "an esthetic abortion" that was akin to a "human abortion". Morse-Diesel Inc. was hired as the
general contractor for the hotel by mid-1977, and demolition of existing structures on the site was expected to begin later that year. Helmsley provided $25 million of the hotel's projected $75 million construction cost, and he borrowed the remainder from
MetLife and
MassMutual, two insurance companies. The site of the hotel's tower had yet to be cleared at that time. For comparison purposes, photographs of the interior were taken before the decorations were disassembled and after they were reassembled. The Gold Room was renovated and turned into a cocktail lounge. The lobby was renovated with marble and wood paneling as well as gilded columns, while the old library was refurbished with 4,000 false books. The old drawing-room of the south wing was redesigned as a cocktail lounge as well, while the old dining room became the hotel's Hunt Bar. though the easternmost section of the complex was demolished. The space was to contain the Urban Center, the headquarters of four civic organizations. Two months later, Capital Cities Communications, which had been a tenant in one of the Villard Houses on 24 East 51st Street, leased space in the tower. During the hotel's construction, one of the houses' roofs was damaged that October when a heavy object fell through it. The Urban Center's space ultimately opened in August 1980, while its bookstore opened that October. According to Huxtable, despite Helmsley's initial opposition to the houses' preservation, he ultimately concluded that the restoration of the houses "justified the money and effort, both as an investment and in the degree of value-added beauty and style obtained for the hotel."
Helmsley ownership The Palace Hotel opened on September 15, 1980; at the time, only the 10th through 23rd floors were ready for occupancy. The Palace Hotel was one of 13 large hotels, with a combined 9,000 rooms, that had opened in New York City during the early 1980s.
Christopher Gray of
The New York Times disapproved of the tower, saying that it "has absolutely none of the quality of the older building to which it is joined", but he described the Villard rooms as "the finest public rooms of any hotel in New York". Upon its opening, many potential guests of the Palace Hotel mistakenly contacted a similarly named budget hostelry at 315
Bowery, prompting complaints from the latter's operators. To avoid confusion, the Madison Avenue hotel was renamed the Helmsley Palace Hotel. By the end of 1980, half of the 947 rooms were ready for occupancy, and the completed rooms had an occupancy rate of 80 percent, despite a downturn in the hospitality industry. The Helmsley Palace had to reject some potential guests, such as
Charles, Prince of Wales, because of a lack of available space. The hotel began to lose money the following year, with losses of over $1 million in each of the first three months of 1981. Furthermore, the Helmsley Palace had overrun its construction budget. A limited partnership agreed to give up to $23 million for the hotel, but the investors refused Harry Helmsley's request for a $20 million second mortgage. The limited investors sued Harry Helmsley in 1982 over the hotel's inflated costs, alleging that he acquired hotel furnishings and equipment at great profit to his own companies. A New York state judge ruled that Harry Helmsley had to refund the investors $3.5 million. The finances of the Helmsley Palace were not publicly revealed, but the hotel's spokespersons maintained that it was still performing well financially, despite a general economic recession. ''
Crain's New York'' magazine characterized the operation of the Helmsley Palace as "an obsession" of Harry and
Leona Helmsley, who would visit the hotel every day. By the late 1980s, the Helmsley Palace consistently had a lower occupancy rate than similar luxury hotels in midtown despite charging above-average rates. At the time, Leona was gaining more control over the hotel after Harry had suffered a stroke. The next year, Leona Helmsley was convicted of tax evasion and several other charges and was sentenced to prison. The hotel's limited partners Lepercq, de Neuflize & Co. attempted to seek arbitration in February 1990 to take majority ownership of the hotel from the Helmsleys. The limited partners said the hotel had gone through six general managers as well as seven directors of food and drink in ten years. The limited partners claimed that Leona Helmsley's conviction was part of the reason behind the hotel's declining finances. The hotel recorded a net loss of $10 million during 1991.
Receivership and Brunei ownership An arbitration panel for the
New York Supreme Court appointed a third-party receiver in July 1992 to manage the hotel. The Helmsleys appealed the receivership for several months, even as the receivers were seeking a second mortgage loan of $7.5 million. After the second mortgage offer was withdrawn over concerns that the Helmsleys did not waive their right to challenge it, the Helmsleys dropped their appeal in April 1993. Leona Helmsley reportedly requested that people not mention the Palace Hotel in her presence because, according to ''Crain's New York'', she was "distraught" over the possibility of losing control. The receiver had found a buyer for the hotel by October 1993, just as Leona Helmsley was to be released from prison. The sale was finalized at the end of that December for $200 million. By 1995, the New York Palace had offered to provide a restaurant space for
Le Cirque, though Le Cirque's owner
Sirio Maccioni initially was hesitant to do so. In June 1996, Amedeo hired
Lee Jablin of Harman Jablin Architects for a renovation of the hotel and Villard Houses. The renovation was to reduce the number of rooms from 1,050 to 900 and would add 14 suites, a gym, and conference areas. Jablin would redesign the lobby in the Villard Houses, while Le Cirque would take up the Gold Room and other rooms in the south wing. A Mediterranean restaurant named Istana opened in March 1997 near the 51st Street lobby entrance, and the new Le Cirque location opened the next month.
Adam D. Tihany designed the Le Cirque space with multicolored coverings over the previous interiors. The suites were redesigned by Pierre Court, who designed four triplex units in the tower, all with nautical decorations. The rooms on the tower's 41st through 55th floors were branded as the Towers, and the interiors were redesigned with both modern and traditional decorations. The hotel remained open during the renovation, which was completed in late 1997. A dispute arose in the late 1990s when Sultan Bolkiah alleged his brother
Prince Jefri was misappropriating state funds to pay for his own personal investments. In 2000, a Bruneian court authorized the
government of Brunei to take over the New York Palace. Amedeo filed a lawsuit in the New York Supreme Court, arguing that the Bruneian court's ruling should not be enacted because it would give the Bruneian government majority control of the hotel. A further dispute occurred the same year when the archdiocese was scheduled to increase the annual rent under the New York Palace and the Villard Houses. The royal family of Brunei argued that the houses reduced the hotel's value and would only pay $4.5 million, while the archdiocese wanted $9 million. Le Cirque was replaced by another restaurant, Gilt, in 2005. The Bruneian legal disputes continued until 2007 when a British court ruled that Jefri had to abide by the 2000 court ruling from the Bruneian court, and by extension, hand over control of the New York Palace to the Bruneian government. In early 2008, the
Brunei Investment Agency acquired the hotel from Jefri. The Municipal Art Society moved out of the Villard Houses' north wing in 2009.
Northwood ownership Northwood Investors, an American real estate investment firm, bought the hotel from the Sultan of Brunei in May 2011 for $400 million. The deal valued each of the hotel's 889 units at $445,000. As a term of the sale, Northwood was to pay the Archdiocese of New York $10 million annually for the ground lease. Northwood then spent $140 million on refurbishing the hotel.
Jeffrey Beers International, as well as
Amy Beckman of
HOK, renovated the hotel's lobby, bars, restaurants, and specialty suites. All of the guest rooms received new decorations, and a reception area was built near the 50th Street entrance. The New York Palace retained eight specialty suites, including the four triplexes, but two of the specialty suites became branded luxury suites. The hotel's new owners sought to lease the Villard Houses' north wing for at least per year. The Trouble's Trust bar opened shortly afterward. At the time, the hotel had 1,232 rooms. The hotel was to undergo a major renovation that included converting some units to condominiums. and the property was renamed the Lotte New York Palace Hotel. Lotte New York Palace Hotel rented out some of the rooms in the southern wing of the Villard Houses in 2016. A restaurant named Villard opened the same year within the southern wing, and Pomme Palais reopened the following year. In 2017, the Archdiocese of New York mortgaged the land under the Lotte New York Palace Hotel and the Villard Houses for $100 million to pay settlements to
Catholic sexual abuse victims. The Gold Room restaurant was opened in 2019 within the room of the same name. The Ila Spa, designed by
Anthony DiGuiseppe, opened on the eighth floor of the hotel the same year. == Guests and events ==