RBETWEEN them, the two princes of New York night life, Ian Schrager and Rande Gerber, own some of the hippest, coolest and chicest hotels, bars and restaurants in town.
Now the two are locked in civil litigation – and a very uncivil war that goes way beyond healthy competition.
Call it the Bar Wars.
The stakes are immense, for the winner may get to redraw the nighttime map of New York, Los Angeles and half a dozen other places, including London and Miami, where people love to party.
“Ian has a history of falling out with people he does business with,” said a top Manhattan restaurateur of the battle.
“He did it with me and countless others. But this one with Rande Gerber – I don’t remember Ian ever being so angry or so threatened before. I don’t recall one this personal or so far reaching.”
Hotelier Schrager is the entrepreneurial genius whose uncanny ability to capture the spirit of a decade gave us Studio 54 and disco in the ’70s and the boutique hotel concept in the ’80s and ’90s.
His vision is epitomized by Morgans, The Royalton and Paramount in New York, the Mondrian in L.A. and the Delano in Miami Beach.
HE is now suing his business partner, 38-year-old Rande Gerber, the husband of supermodel Cindy Crawford, in Manhattan Supreme Court.
He’s accusing Gerber, who operates bars in his hotels, of forming an unholy alliance with Schrager’s main business rival, Barry Sternlicht.
Sternlicht is the chairman and chief honcho of Starwood, which operates the W chain of boutique hotels that go head to head with Schrager’s.
What angered Schrager most is that Gerber has opened the Wet Bar at W in direct competition to the Whiskey Bar in the Paramount and Morgans Bar at Morgans Hotel.
And Gerber’s company is about to open a bar in the Park Sunset Hotel – right next door to Schrager’s Mondrian, where Gerber operates the Skybar. The suit claims the new bars violate their deal.
Schrager is apoplectic with rage.
“In all my years in the business,” he said, “I have never witnessed such an obvious disregard for both the spirit and the letter of a written agreement.”
Gerber counters that his brother Scott actually runs the two bars in question, but it’s a claim that might appear disingenuous, for both Scott and Rande control Gerber’s companies, and almost all promotion up to now has portrayed the bars as Rande’s.
SAID Gerber’s spokesman Andrew Wintner: “What the lawsuit is claiming is that Rande is involved with Wet Bar and the L.A. property next door to the Mondrian.
“He is not. His brother Scott is involved in that. They work together on some projects and work separately on other projects.
“I wish I knew what is going on in his mind. This doesn’t make any sense,” he said of Schrager’s evident outrage.
“From day one, when these projects were a speck in somebody’s mind, Rande was smart enough to know that he would be getting into a potential legal conflict.
“He’s had a great relationship with Ian. He wouldn’t have wanted to jeopardize that.”
Answered Schrager: “This flies in the face of reason and is contrary to what we all know. It would be absurd to distinguish Scott’s activities from Rande’s activities. Scott could not and would not operate independently.
“I gave Rande his start. I expected nothing in return other than the decency and integrity to honor his word.”
As the feud intensifies, restaurateurs Brian McNally, Pino Luongo and Jeffrey Chodorow, all of whom have their own deals – and have had their own spats – with Schrager, seem destined to be drawn into the core of the conflict.
Everything important in the life of Schrager seems to have followed – like rows of falling dominos – from seemingly trivial events.
His long and profitable partnership with the late brilliant night life impresario Steve Rubell led to Studio 54 and from there to prison for tax evasion.
Schrager’s relationship with Gerber grew from a little acorn, too.
Gerber grew up on Long Island and graduated from the University of Arizona with a degree in film and marketing.
His rugged, red-suspender machismo, sheer-cliff forehead and lay-one-on-me-chin qualified him as a male model. He was working in real estate for megabroker Edward S. Gordon when he first met Schrager.
He was assigned to find a managing tenant for a bar space at The Paramount. None of the candidates was ideal and Schrager ultimately suggested Gerber take on the bar himself.
“He had no experience operating a bar. He was a male model and a real-estate broker,” Schrager recalls. “I have always tried to select people for my organization that I believe will work hard and repay my trust with loyalty.
“I thought I saw in him a promising novice to whom I might teach the business. Unfortunately, no good turn goes unpunished.”
OVER the next several years, Gerber and his brothers, Scott and Kenny, opened and successfully ran the bar in Morgans, the Whiskey Bar and mezzanine bar in Paramount, and the now legendary Skybar in the Mondrian in Los Angeles.
The bars are the exact opposite of noisy nightclubs, but what the bar and club concepts have in common is a hip, cool ambience and a celebrity-laden clientele. The Skybar and the Whiskey Bar are star magnets and their reputation brings in the nubile and well-heeled as well as the well-known.
Kate Moss and Claudia Schiffer, Leonardo DiCaprio, Mel Gibson, John Travolta, Marilyn Manson bandmate Twiggy Ramirez and a host of other celebrities hang out in Rande Gerber’s bars.
So eager were some wannabe trendsetters to get in, they checked into Schrager’s hotels to be sure of a place at the bars – even if they lived just a block away.
As he expanded his business, Gerber also forged a partnership with Giorgio Armani to operate five Armani cafes in Emporio Armani boutiques.
In less time than it takes to graduate from law school, Gerber’s initial deal with Schrager grew into a corporation making $15 million a year.
But then Gerber forged the alliance that Schrager found threatening.
Sternlicht’s Starwood, named after the Colorado ski resort, began with a group of well-heeled real-estate investors looking for sweet deals.
Sternlicht was sitting in a hot tub when he hit on the name.
Since 1993, Starwood has swallowed 100 hotels, including the St. Regis Hotel and the entire Westin and Sheraton chains.
When Sternlicht launched W hotels as a boutique chain, he brought in Schrager’s protégé Gerber to run the bars for him. Clearly he wanted Gerber to do for W what the Skybar had done for the Mondrian and Whiskey Bar for the Paramount.
At first, Schrager seemed to give Gerber’s relationship with Sternlicht his blessing.
In a September 1998 New York Magazine story about the boutique hotel explosion, Sternlicht, Gerber, architect David Rockwell and restaurateur Drew Nieporent were pictured frolicking on the same bed at W.
“I feel friends with Barry,” Schrager was quoted as saying. “I admire him very much. And I feel flattered that he likes what we do. There’s no rivalry. I wish him well. I mean, Barry met Rande Gerber at my office!”
Even so, Gerber seemed to anticipate trouble: “Ian’s probably not happy about me doing other things. But I can’t sit around and wait. I like to move.”
Soon, Schrager began to smell a rat in Gerber’s dealings with Starwood.
LAST year, Gerber turned to Schrager for more financing to expand his fledgling empire and offered to sell him a large share of his company, Midnight Oil. Schrager turned the offer down.
Then Starwood, Schrager’s rival, bought a 49 percent stake in Midnight Oil – in a deal that entitles the hotel giant to two seats on the board.
Schrager claims that gives Starwood access to proprietary information about his hotel business.
“I can’t permit anybody to pirate my concepts, leverage their success and violate their agreements,” fumes Schrager.
For their part, Sternlicht’s spokesman Dan Gibson said Gerber is unlikely to have access to any secrets.
“They operate bars, not hotels, so it’s silly to talk about hotel secrets,” Gibson said. “We are kind of surprised that Ian is feeling so threatened. We must be really cool.”
Rande Gerber claims there may be another reason Schrager is throwing down the gauntlet now.
Schrager is involved in several deals with restaurateur Jeffrey Chodorow, creator of the China Grill and Asia de Cuba, located in Morgans and reputedly the most popular nightspot in Manhattan.
Soon Chodorow will have a new restaurant inside another Schrager hotel, The Hudson, on West 57th Street.
Gerber’s associates say Schrager wants the bar spaces at Morgans, Mondrian and Paramount back from Gerber so he can let Chodorow run them.
Gerber’s deals with Schrager still have up to nine years to run. The lawsuit may provide an opportunity to tear them up.
THE 44 restaurant in the Royalton run by Brian McNally will fall vacant in four years. Schrager’s relationship with McNally is cool and their agreement is unlikely to be renewed.
Testy Tuscan Pino Luongo runs the Coco Pazzo Teatro at the Paramount. That will also eventually fall vacant because Schrager’s relationship with the temperamental Italian genius is also strained.
Chodorow and his ace chef and first lieutenant, Alain Ducasse, are being tipped to take over those spaces too.
The Schrager-Gerber lawsuit is likely to be but the first shot in a longer battle for control of the city’s hippest nightspots – and there are already signs that it is likely to get very dirty.
“Make sure you remind people that Schrager’s the convicted felon,” snarled a close Gerber business associate. “And that Rande’s the upstanding businessman.”