HOTELS: Mr. Schine Goes West

For months, hotelmen had been quietly tilting for control of Los Angeles’ luxurious Ambassador Hotel, whose 500 rooms, famed Cocoanut Grove, swimming pool and golf course have long been run by a bondholders’ trust. Conrad Hilton, owner of Chicago’s Stevens (“world’s largest”) and twelve other hotels, thought he had the inside track. Hilton started dickering last year, first offered $22 apiece for a controlling quantity of the 58,200 trust certificates issued after the hotel went bankrupt in 1935, gradually raised this to $44, with no takers.

But while he and other hotelmen cautiously debated upping their bids a bit, in stepped Junious Myer Schine, 54, who has picked up over $30,000,000 worth of choice hotels* in less than three years in the business. He talked turkey to a group of California brokers who held a fat chunk of the trust certificates. To the consternation of Hilton et al., Schine last week paid $55 apiece for 51% of the certificates. For his $1,621,510 he got control of the hotel.

Profits from Rolling. For such infighting, Myer Schine had plenty of rough-&-tumble business experience. A Russian immigrant, he went to school in Jamestown, N.Y., worked as a candy butcher on trains, then as a dress salesman. In 1918, he and his brother plunked down $1,500 in savings to lease a dilapidated building called the Hippodrome at Gloversville, N.Y. (pop: 23,329). With the Hippodrome, variously used as a theater, roller-skating rink and dance hall, he made enough money to buy Gloversville’s two movie houses. Snapping up other small-town theaters by the dozen, he soon owned one of the biggest independent circuits in the U.S. His Schine Chain Theaters, Inc. now operates upwards of 150 theaters in New York, Ohio, Delaware, Maryland and Kentucky.

Profits while Lolling. Schine took to lolling in Florida. He was tired of watching “snowflakes slide down windowpanes” (nonetheless, he still keeps up a home in Gloversville). But he was not tired of making money, and when he got a chance to buy the Roney Plaza for $1.6 million early in 1944, he grabbed it. Then he went scouting for other properties.

Schine reluctantly admits that all his hotels are booming, but will not tell how big the boom is. And he figures that his first venture in the West was a good buy. The Ambassador was making plenty of money (1945 net before taxes and bond payments: $1,279,000). Out of profits, its bonded indebtedness had gradually been reduced from $5,800,000 to $3,700,000. Technically, Schine still lacks full control of the Ambassador. Said one California financier: “All Schine bought is the first place in line.” But it was really more than that. Schine can now do one of three things: 1) acquire full ownership by paying bondholders off outright; 2) sit tight and wait for profits to wipe out the bonds; 3) sell certificates of his holdings to a higher bidder. Few people who know Schine expect him to sell.

* Choicest: Miami’s razzle-dazzle Roney Plaza and, 40 miles up the Florida coast, the ultra-plush Boca Raton Club. Other Schine properties: Miami’s McAllister, Albany’s Ten Eyck, Atlantic City’s Ritz-Carlton, the Breakwater Court at Kennebunkport, Me., the Northampton Hotel and Wiggins Old Tavern at Northampton, Mass.