KARACHI: Pakistan plans to redevelop its Roosevelt Hotel in New York into a high-rise building through a joint venture (JV) that could involve up to $5 billion in equity and debt financing, Prime Minister Shehbaz Sharif’s aide on privatization Muhammad Ali told Arab News on Friday.

The hotel, a century-old Manhattan property near Grand Central Terminal and Times Square, is one of Pakistan’s most valuable overseas assets and is owned by the state through Pakistan International Airlines.

Closed since 2020 due to losses, the hotel has been under review for years as successive governments have weighed whether to sell, lease or redevelop it while pursuing state-owned enterprise reforms linked to International Monetary Fund bailouts.

“The redevelopment project would require up to $5 billion equity and debt capital,” said Ali, who also chairs the Privatization Commission of Pakistan.

Ali said the government had decided against an outright sale of the property after a detailed study conducted last year showed the site could support a significantly larger structure, potentially rising to 60 stories.

“The redevelopment under the JV privatization model is expected to increase value of the property and thus Pakistan’s stake by more than 200 percent [in terms of value],” he continued.

Under the proposed joint venture structure, the government would contribute the land while a private partner would inject equity, with the remaining financing raised through debt, Ali said

He added that that while Pakistan’s economic interest in the project would rise, its ownership share would be reduced to about 50 percent once the transaction is completed.

He said a range of international players, including commercial banks and technology firms, had expressed interest in developing their own premises at the site, though he declined to identify potential partners.

Ownership of the hotel was recently transferred to PIA Holding Company Limited, the parent company of Pakistan International Airlines Corporation Limited, which the government privatized last month, with the airline now owned by a consortium led by the Arif Habib Group.

ADVISER RESIGNATION

Pakistan’s plans for the Roosevelt Hotel have faced repeated delays in recent years as authorities weighed competing options, including demolition, amid shifts in government policy.

On Dec. 24, a day after the PIA privatization, Defense Minister Khawaja Asif said the government was working on structuring a transaction for the New York property.

Meanwhile, a privatization ministry official said on condition of anonymity that the country’s financial adviser for the hotel’s sale, Jones Lang LaSalle Americas Inc. (JLL), has resigned due to a “conflict of interest.”

The official said JLL stepped down after the transaction structure was approved by the federal cabinet and the Competition Commission of Pakistan in July.

“The Privatization Commission will finalize the new adviser in the next four to six weeks,” he said, adding that expressions of interest will be issued after the new appointment is made.

Asked about the development, Ali said the new adviser would engage with potential joint venture partners on behalf of the government.