Jeffrey Epstein’s Past Ties to Life Hotel

20 minutes read

The Life Hotel in Herald Square was supposed to be restaurateur Stephen Hanson’s big comeback.

After selling his hospitality company, BR Guest, to Starwood in 2007, in 2013 Hanson unexpectedly left the group, which ran popular city eateries like Dos Caminos, Blue Water Grill and Ruby Foo’s. For his next big project, he wanted in as a developer, not just the guy in charge of a restaurant.

He formed a partnership with David Mitchell, an under-the-radar real estate guy who had just come off a successful condo project a few blocks south, to develop a hotel. Their Life Hotel was supposed to revive the former headquarters of Life Magazine and residences where Norman Rockwell once lived and worked into a chic hotel with a celebrity chef, reestablishing Hanson’s role as one of New York City’s elite restaurateurs.

But someone else’s fingerprints were all over it: their longtime mutual friend, Jeffrey Epstein.

Epstein’s involvement with the hotel provides a window into how he operated and how he leveraged small investments to extract benefits. Epstein had no known stake in the Life Hotel, but steered its operating and financial decisions, acting as an advisor and mentor figure to both. In return, he offered friends jobs at the hotel and requested free VIP rooms, which he used for women and friends visiting the city.

It also allowed him to dole out perceived favors to Hanson and Mitchell, often while pitting the two men against each other. Hanson and Mitchell did not respond to requests for comment.

Emails released by the Department of Justice related to its investigation into Epstein’s sex trafficking operations show the hotel imploding in spectacular fashion. Mitchell and Hanson seemed to immediately run out of money for both the restaurant and the hotel and blamed each other for the demise.

At times, Mitchell sought small, short-term cash infusions from Hanson of roughly $2,000 just to keep the hotel running. The partnership between the two men also quickly devolved, with each leveling harsh allegations against the other. Hanson once called Mitchell “a piece of shit” in an email while Mitchell referred to Hanson as “toxic” in another email.

But the two never lost faith in Epstein or blamed him, instead thanking him profusely for his advice along the way.

“Thank you so much for your supreme acts of friendship,” Mitchell emailed Epstein.

Origin stories

Mitchell and Hanson had grand ambitions for the Midtown property. “The Life Hotel will bring back the spirit of the 1920s,” Hanson told the New York Post before it opened.

It appeared to be their first public project together, but they had known each other — and Epstein — for years. In 2011, Hanson and Mitchell emailed Epstein that they were at a beach party together and wanted to get dinner with him. Two years later, the three men went for a night out on the town in Williamsburg.

Mitchell was a wheeler-dealer with an array of business ventures from condos to a deli to rare coins. He and Epstein were coming off the success of a 2013 boutique condo project they invested in together, the Whitman, on the north side of Madison Square Park, which attracted celebrity buyers like Chelsea Clinton and Jennifer Lopez. Mitchell often found himself in money trouble though, and would frequently ask Epstein for loans.

The hotel appeared to be Mitchell’s idea, and he signed a contract to buy the hotel in January 2015 for $41 million. The former site of Life Magazine’s headquarters, the property had been stripped of much of its Beaux-Arts grandeur and turned into the relatively staid Herald Square Hotel by its previous owner in the 1980s.

Mitchell had initially offered Epstein a piece of the deal. But it was Hanson who was more interested. He claimed he no longer wanted to be a “restaurant bitch” and wanted in as a developer.

Emails between Hanson and Epstein show the pair also had a close personal relationship. They would go to movies together, seeing the critically panned film Entourage, and comedy shows in West Palm Beach. Hanson offered to help Epstein find staff for one of Epstein’s homes in the Virgin Islands.

The partnership between his two friends gave Epstein a chance to get inside the project without putting up any money. Eventually, he took advantage of comped hotel rooms. He also used the opportunity to deepen his friends’ reliance on him.

“Day one , when we talked about this , we discussed this as a marriage,” Epstein wrote to Hanson in July 2017, in his characteristic typo-laden and grammatically incorrect text style. “ill help anyway I can.”

Money troubles

By the middle of 2016, with the hotel set to open early the next year, Epstein was expressing concern that Mitchell was not focused enough on the project.

The hotel partially opened in April 2017, but Epstein’s concerns were validated when, by the summer, Mitchell and Hanson ran out of money to cover the rest of the construction at the hotel. Hanson’s restaurant, which was leasing the ground-floor space from the hotel, was also not ready to launch, and each of the men claimed their side of the operation needed more money.

“One wanted a hotel with a restaurant, the other wanted a restaurant with a hotel,” one person who worked closely with Mitchell and Hanson said.

To bridge the financing gap, Mitchell sought a loan modification from Deutsche Bank to up the hotel’s loan to $41 million from $36 million. Mitchell and Hanson had to personally guarantee the debt, and Epstein helped get them to the signing table, emailing and calling both men in the days leading up to the deal.

Epstein went so far as to guarantee Mitchell’s side up to $1 million. As collateral for Epstein’s guarantee, Mitchell offered to pledge two sculptures he had in possession.

“Steve will sign, i told him i guarantee your side,” Epstein wrote to Mitchell before the loan signing on July 18. Epstein then had phone calls with Hanson and Mitchell the morning of the signing.

Hours later, Mitchell emailed Epstein that the hotel received its extra $5 million.

Still, Epstein preferred to keep his distance from the hotel. “i prefer no tie to hotel,” he told Mitchell around the time of the loan modification.

Downfall

The extra money proved to be little more than a Band-Aid, and just months later Mitchell and Hanson were once again scrambling — and turning to Epstein.

The hotel was operating on a razor-thin margin with construction delays. As the two partners feuded, Mitchell needed more loans or to cover small charges. Hanson kept delaying the opening of his restaurant, further straining the relationship.

On October 25, 2017, Mitchell asked Hanson for $2,600 after he was hit with an overdraft fee. “Can not transfer,” Hanson replied, saying he needed the money for the restaurant’s payroll.

In November, Hanson’s lawyer told Mitchell’s lawyer that there was “a total breakdown in communication.”

Epstein stepped in to try and resolve the bad blood. He had started pushing for his friends to just sell the hotel, and was growing frustrated with Hanson’s refusal to provide financial information to Mitchell, who was facing pressure from lenders. He also pushed Hanson to open the restaurant, which he thought would help a potential sale.

“[You] are WAYYYYYY overeacting to feeling you are getting fucked,” Epstein wrote in an email. He ordered Hanson to put his “head down get it open.”

A month later, Hanson obeyed Epstein’s order. He opened his much anticipated restaurant, the Henry, in December 2017.

But the restaurant failed to save the property. No one was coming in. On one January day, the Henry generated a meager $998 in sales on 31 customers. Hanson blamed a delayed opening for a lack of momentum.

During that time, the hotel’s general manager reported receiving calls from collection agencies on behalf of unpaid vendors. Mitchell was once again trying to negotiate a new capital raise, but Hanson refused to put in any more money.

Hanson said the situation with him and Mitchell was so bad he referred to it as the “Middle East.” Epstein noted in one exchange that Mitchell and Hanson were close to a fistfight.

Ultimately, Hanson wanted a divorce from Mitchell. Less than six months after opening the Henry, a consultant told Mitchell that Hanson, “wants out and no longer wants to be in business with you.”

A new restaurant replaced the Henry later that year and in 2019, Mitchell brought on Luxe Hotels as a co-operator. Four years later, he lost it in foreclosure.

The man behind the scenes

Epstein’s involvement in the hotel reveals how a man known as a master manipulator used a failing hotel to further his ends.

Epstein used the hotel to book VIP stays, often for women visiting the city.

“Jeffrey is asking if you could check and see if a friend of his who arrives NY city tonight could possibly stay at your Life Hotel for One Night,” Epstein’s assistant emailed Mitchell on November 17, 2017. Mitchell booked her a VIP room, free of charge. (Emails show this same guest flew home to Geneva the next day where a black car service was scheduled to pick her up to “take her to school.”)

In August 2018, Epstein suggested putting up two women — whom his assistant referred to as “2 of Jeffrey’s friends” — at the hotel instead of 301, referring to the condo building at 301 East 66th Street where it has been reported he kept many of his victims. Mitchell gave them a VIP room for no extra cost, emails show.

Epstein also requested other favors from Hanson and Mitchell. Epstein got his friend Julia, in the city on a green card, a job at the hotel in September 2015. In June 2017, Epstein’s assistant asked if Epstein could use Hanson’s Hamptons house for “the girls” for a weekend.

Meanwhile, Mitchell relied on Epstein to help fill shortfalls at the hotel. Epstein provided a short-term $70,000 loan to Mitchell in October 2018.

Epstein, meanwhile, did not have any equity in the hotel. He had no recorded loss.

But Hanson fell out of his orbit. With no hotel, no big hot-ticket restaurants in Manhattan, Epstein no longer had use for his former friend.

“Haven’t seen you in months,” Hanson emailed Epstein in January 2019. “not sure how much longer you will be around.”

Epstein didn’t respond.