Getting There: A Book of Mentors (2015)




I grew up in Brooklyn. Back then it was very middle class and everyone was striving to improve their lot in life. I’m happy I wasn’t raised somewhere more affluent. I think it made me hungrier. I had no idea where I was going or what road I would travel on, but I knew I wanted to be successful.

I have always been very competitive and driven, in sports or whatever. I think that’s a quality you either have or you don’t. In the end, there’s so little that separates people. Those who want success the most and are relentless about pursuing it are the ones who get it.

I realize now that it’s practically impossible to know what you want to do when you start out. For most people, it’s usually a process of experimentation and elimination. I went to Syracuse University and majored in economics, and then went on to law school—not because I really wanted to practice law but because I wasn’t sure what I wanted to do. I figured that wherever I landed, being a lawyer and learning how to think analytically would be beneficial. I ended up practicing law for about three years. One day a friend asked, “Why would you want to advise people who are out there doing things instead of doing them on your own?” That really resonated with me. I decided I wanted to do something entrepreneurial and partnered with my college friend, Steve Rubell. We chose to go into the nightclub business, in large part because there were very few barriers to entry—it didn’t require a tremendous amount of capital and there wasn’t a huge learning curve.

I don’t follow the adage that it’s not good to do business with friends. I think it is good. It’s nice to share success with a friend, and a friendship can help resolve difficulties that might arise. But it’s important to choose a partner who complements your skill set rather than someone who excels at the same things you do. Steve and I were perfect together for that reason.

I’ve always been shy. It is very difficult for me to make aimless banter, and I’m not very interested in socializing. I suppose there’s a contradiction in possessing those qualities and being in the hospitality business, but as a result, I’ve always relied on the strength of my work to carry the day. I am creative and there isn’t a detail that I’m not interested in. Steve, on the other hand, was extremely social. He loved the people, the visibility, and the stage. There were no mutually exclusive responsibilities, but we each gravitated to our individual sphere of expertise. I’ll never forget our opening night at Enchanted Garden, the first club we opened in Queens. Steve went right to the bar and spent the whole evening hanging out with the kids. I went right to the DJ booth and spent the entire time playing with the lights and making sure the ambiance was just right. Together we were much more formidable than either of us would have been on our own. It was one plus one equals three.

Enchanted Garden did well and about two years later, in 1977, we opened Studio 54 in Manhattan. It was a tremendous hit. There were, of course, other nightclubs around at the time, but Studio 54 really took things up a notch. We had a theatrical approach and added a lot of glamour, design, and sophisticated special effects. We were like a couple of kids (I was thirty at the time) holding on to a lightning bolt that struck at the right place at the right time. Such great success at an early age was intoxicating, and as a result, Steve and I sort of lost our way. We began thinking that the rules didn’t apply to us and we didn’t pay income taxes. It was very stupid behavior. We got caught and were punished. We lost everything and ended up going to federal prison for thirteen months. It was devastating, humiliating, and almost destroyed us. If my parents had been alive at the time, it certainly would have killed them.

Doing time in prison is absolutely terrible. You are robbed of all human dignity and discretion. You are told when to eat and when to shower. It’s a depressing state. I could never get comfortable and didn’t thrive in that environment. But something that really helped me through my stay was reading books on great men who had either come from nothing and prospered or suffered travails in their lives and overcame them. I also remember being encouraged by David Halberstam’s book, The Powers That Be. He wrote about the prominent media empires of this country like Time, the New York Times, the Washington Post, and CBS. They all had difficult interludes that interrupted their progress—but it was during those recesses that they decided to take another course and eventually achieved major success.

It was during my time in jail that I figured out what my next career move would be: hotels. At that time Donald Trump was doing a hotel called the Grand Hyatt New York and Harry Helmsley was doing the Helmsley Palace. The media was making a big deal about the rivalry between the old guard and the new guard. That type of competitiveness was alluring and dragged me in. I thought, Steve and I can do that! In my mind, it was an adjunct to what we had been doing: The nightclub business centers around taking care of your guests. They are not supposed to sleep over, but opening a hotel was a logical progression as far as I was concerned.

When Steve and I got out of prison, we were in major debt. We owed more than $1 million in legal fees, as well as some $750,000 in various taxes, penalties, and interest. In an effort to start paying off our debts, we were forced to sell the Studio 54 building in exchange for a promissory note.

Having nothing made me even more ambitious, and I was determined to get back to where I had been before losing it all. Unfortunately, the hotel business is very capital intensive and we couldn’t get anyone to invest with us. In people’s minds, we were nightclub guys. We were untested. No one wanted to risk their money to see how we would do in another field. As for banks, some wouldn’t even allow us to open checking accounts, let alone lend us money. It was very discouraging.

David Geffen, a friend and role model, said something to me at the time that was very simple yet profound: “You don’t begin until you begin.” What he meant was that if I ever wanted to achieve success again I had to start somewhere. I couldn’t expect to immediately build a multimillion-dollar hotel business. I had to get out there, start with what I knew, wait for opportunities to come my way, and respond to them. That’s the secret: Don’t allow yourself to get dispirited and give up.

One day the opportunity we had been waiting for presented itself. The person we had sold Studio 54 to couldn’t pay us back, so we traded the promissory note in for his hotel on Thirty-eighth Street and Madison Avenue.

Like we did in the nightclub world, we wanted to create something outside the box and give our patrons an elevated experience. Utilizing a lot of the elements that made us so successful in the nightclub field—the stagecraft, the alchemy, the style—we put a lot of effort into renovating the hotel and reopened it as Morgans in 1984. It was another natural success. Our concept triggered the “boutique hotel” revolution and changed the entire industry. Following this, Steve and I bought another hotel, the Royalton, where we launched the concept of “lobby socializing,” where the hotel lobby became a new kind of gathering place for guests and the city’s residents alike.

But in 1989 our comeback together was cut short. Steve was hospitalized due to extreme dehydration, and two days later, at age forty-five, he was dead. I was traumatized. Steve and I had seen each other every day since 1964. I don’t know who was the husband and who was the wife, but I loved him. The transition from working with Steve to branching out on my own was extremely difficult. I was anxious and insecure about whether I would be able to do it alone, but I realized I had no choice and picked up the baton where we left off. I’ve expanded a lot since then. I think Steve would be proud.

My whole tax evasion debacle—getting in trouble, going through the legal process, fighting it, going to jail, coming out, and getting on my feet again—cost me about ten years. That’s the amount of time it took to get back to where I left off, both financially and emotionally. Thank God it all happened at an early age, and I didn’t lose my enthusiasm or zest for life. Steve and I were able to pick ourselves up, dust ourselves off, and start over. I don’t recommend prison to anyone, but I am certainly living proof that the system works. What I went through taught me the importance of playing by the rules and not cutting corners. I’ve always tried to take the high road since then. To that extent, it benefited me and made me stronger than I was before.

It took about thirty years before I was comfortable even speaking about the whole experience (being embarrassed about it in front of my kids was a huge factor). Although the wound has never fully healed, I am now happy to tell my story. I want to give back and help others who are trying to make good.


Images How one deals with obstacles is what separates the men from the boys. No matter what field you are in, there will always be stumbling blocks. Don’t think about everything that can possibly go wrong. Just put one foot ahead of the other and, step-by-step, get everything done. I give the same advice to my daughter when she is overwhelmed with homework. I tell her to do one thing at a time and it will all get done. There is no other way.

Images Don’t be afraid to follow your dreams, don’t be afraid of trying something new, and don’t be afraid of failure. Fear of failure often paralyzes people and prevents them from succeeding. They think: If the decision I am making now is a mistake, it’s all over. That’s not generally the case. There are very few things in life that you can’t recover from. When you realize this, it’s easier to make choices and keep moving forward. If you play it too safe, you won’t get anywhere.

Images People naturally gravitate to their comfort zones. I built what I did around my sphere of capabilities. Stick to what you do well and don’t do what you don’t do well.

Images Sometimes your greatest assets can also be liabilities. To be successful in a creative field you need to have a visceral, emotional connection to what you are doing. Unfortunately, that enthusiasm and passion can’t always be directed to where it serves you well. I, for example, believe that success is all about the details and I am a painstaking perfectionist. When this perfectionism makes its way into my personal life, it can be oppressive to others and myself. My wife and I recently put a lot of effort into our dream home. I think it came out picture-perfect. The problem is, I didn’t want anybody to sit on any of the couches. That’s the type of quality I wish I didn’t have, but it helps to be aware of this and try to keep that kind of emotion where it belongs.

Images Walt Disney and Steve Jobs really inspire me because they pursued their visions and accomplished feats that others couldn’t even imagine were possible. When Disney did his animation in the 1920s, the same techniques were available to everybody else—he just did it in a magical way. Same with Jobs. Other people were producing technologically advanced computer devices when he was, but the way he put his products together had a certain spark. You don’t have to completely reinvent the wheel to be successful—the key is to do whatever you do in an imaginative, original way.