Why cash-strapped Pakistan has signed a pact with US to redevelop NYC’s Roosevelt Hotel

The hotel stopped operating as a luxury establishment at the end of 2020 (Image: Reuters)

• Pakistan, US sign deal to redevelop Manhattan's Roosevelt Hotel
• Hotel owned by Pakistan International Airlines since 1979
• Deal seeks to maximize value, not sell, amid Pakistan's cash crisis

Did our AI summary help?

Despite its ongoing economic challenges, Pakistan has signed a pact with the United States to jointly redevelop the Roosevelt Hotel in Manhattan, which ceased operations in 2020.

The agreement between Washington and Islamabad was negotiated by US special envoy Steve Witkoff under the leadership of President Donald Trump.

Who owns Roosevelt Hotel?

The Roosevelt Hotel opened in 1924 as part of a larger plan to develop the area around Grand Central Terminal. Named after former US president Theodore Roosevelt, the property changed hands several times before Pakistan International Airlines took a lease on it in 1979 and later acquired full ownership.

The hotel stopped operating as a luxury establishment at the end of 2020. Thereafter, it operated as a reception and shelter centre for asylum seekers, while the city worked to manage a growing number of newcomers under its right-to-shelter provisions.

Why Pakistan pursued this deal despite being cash-strapped?

The restructuring and privatisation of state assets form a cornerstone of Pakistan’s $7 billion agreement with the International Monetary Fund (IMF), with the century-old Midtown Manhattan hotel owned by the national airline seen as a key component of the plan.

Rather than a quick outright sale which could undervalue the property – valued by the cash-strapped South Asian country at over $1 billion -- the deal focuses on cooperation for operation, maintenance, renovation, and redevelopment to "secure maximum value" for the property.

Additionally, collaboration with the US introduces American real estate expertise into the project -- with the deal negotiated by Witkoff under the leadership of Trump -- and could open the door to improved financing, strategic partners, or stronger market access in New York.

"The objective remains to secure maximum value for this property in alignment with the government's privatisation strategy while strengthening Pakistan-United States economic ties," Reuters quoted a statement by Pakistan’s finance division.

While cash constraints have restricted Pakistan’s ability to undertake big-ticket projects, the collaboration offers an opportunity to convert a valuable yet unused asset into a source of revenue, supported by the US and in line with its push to monetise assets under severe economic pressure.

The MoU was executed by General Services Administration (GSA) administrator Edward C Forst on behalf of the US and finance minister Muhammad Aurangzeb on behalf of Pakistan, and witnessed by Pakistan Prime Minister Shehbaz Sharif and United States special envoy Steve Witkoff.

The US GSA primarily manages federal property and procurement for US government agencies, and its publicly stated mandate does not typically include commercial redevelopment of foreign state-owned assets.