Yellowstone Files Plans to Convert Times Square Migrant Housing Site to 265-room Hotel

Yellowstone Real Estate Investments has filed plans to convert a former McDonald’s turned migrant shelter into a 265-room hotel located at 220 W. 42nd St. in Times Square. The proposed hotel would occupy the upper floors of the building, which has been housing migrants since 2023.

Site Background and Conversion Proposal

The building, a historic 24-story structure that once housed media offices, has been vacant for years. Previously home to a bustling McDonald’s, it was repurposed as a shelter in response to New York City's "right to shelter" policy. The conversion to a hotel is part of Yellowstone's strategy to revitalize the building, with CEO Isaac Hera leading the project.

Challenges and Regulatory Considerations

Yellowstone faces regulatory hurdles, as new hotel developments require special approval since 2021 to assess potential adverse effects on neighborhoods. Critics view this regulation as an attempt to protect unionized hotel workers. Despite these challenges, Yellowstone aims to secure approval for its hotel proposal.

Rationale for Hotel Conversion

In its filings, Yellowstone argues that the building's location cannot compete with nearby Hudson Yards' amenitized office towers. Conversion to a hotel and retail space would revitalize the area and contribute to economic activity on West 42nd Street.

Ownership History and Current Status

The building, known as the Candler Building, was acquired by Yellowstone in 2022. It has been functioning as a shelter since March 2023, housing over a thousand migrants. Recent incidents, such as a stabbing outside the premises, highlight challenges associated with its current use.

Company's Hotel Strategy

Yellowstone has demonstrated a keen interest in hotel investments, notably acquiring the Watson Hotel on West 57th Street and reportedly purchasing the mortgage for the New Yorker Hotel on Eighth Avenue. Despite the ongoing impacts of the pandemic on the hotel market, Yellowstone sees potential for growth in the sector.

City's Accommodation Needs and Future Outlook

The city faces a projected shortage of hotel rooms by 2035 if supply doesn't increase. While the hotel market is expected to recover by 2025, ongoing challenges from the pandemic continue to influence the sector's dynamics.