NYC ends lease with Pakistani-owned hotel used as migrant shelter

The termination of the $220 million lease is a serious hit for Pakistan’s flagship airline, which has owned Midtown’s iconic Roosevelt Hotel since 2000.

By THE MEDIA LINE/ARSHAD MEHMOOD FEBRUARY 27, 2025 22:54

Roosevelt Hotel (photo credit: SHUTTERSTOCK)

[Islamabad] The flagship Pakistan International Airlines (PIA) has suffered a major financial setback following New York City’s decision to terminate a $220 million lease agreement for the Roosevelt Hotel, a 19-story building owned by the airline. The hotel has been used by the city as a shelter for migrants since 2023.

New York City Mayor Eric Adams announced plans to shut down the migrant processing center and shelter at the hotel in a video message posted on the X social media platform on Monday.

“While our commitment to those in need remains, today marks a significant milestone in our efforts to manage an unprecedented international humanitarian challenge,” Adams said, noting that the hotel, which serves as an arrival center and emergency response hub, had helped process over 173,000 of the 232,000 migrants who arrived in New York since 2022.

Largely as a result of the Venezuelan refugee crisis, New York City has faced a massive influx of migrants in recent years. 

That situation has put Adams in a difficult position, balancing New York’s longstanding status as a sanctuary city and the stark reality that resources are increasingly stretched thin and that some migrants have been involved in violent crimes. 

A Pakistan International Airlines (PIA) passenger plane prepares to take off from the Benazir International airport in Islamabad, Pakistan, February 9, 2016. (credit: REUTERS/FAISAL MAHMOOD/FILE PHOTO)

Adding to his challenges, a federal corruption probe into Adams’ 2021 campaign has weakened the mayor’s political standing, allowing President Donald Trump to capitalize on the situation. 

President Trump has used the crisis to pressure Adams into adopting stricter migration policies in exchange for the Justice Department dropping the corruption charges.

Adams said that policy reforms have resulted in a significant drop in the number of migrants arriving each week, from 4,000 at the peak to 350.

His announcement follows scrutiny over the use of taxpayer funds and criticism from Trump's close aide Vivek Ramaswamy, who, in December 2024, condemned the New York City administration’s deal with PIA.

Ramaswamy’s remarks highlighted the broader political and economic implications of the lease termination, reflecting the evolving dynamics of US domestic and foreign policy.

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“The hotel receiving taxpayer funds to house illegal immigrants is owned by the Pakistani government. 

This means New York taxpayers are essentially paying a foreign government to shelter illegal immigrants within our own country,” Ramaswamy said.

PIA and Saudi Prince Faisal bin Khalid Al Saud bought the hotel in 2000, more than 75 years after the Midtown luxury hotel’s opening in 1924, and PIA then acquired Prince Faisal's ownership stake. 

In December 2020, the hotel shut down after a downturn in the tourism industry caused by the COVID-19 pandemic.

In May 2023, PIA leased the Roosevelt Hotel to the New York City Health and Hospitals Corporation as part of the airline’s strategy to monetize assets and generate revenue through hospitality ventures. 

A $220 million agreement was reached by the stakeholders. Since then, the hotel has functioned as an arrival center for migrants, providing access to vaccines, food, and other essential resources.

The hotel’s conversion into a shelter brought numerous issues, including concerns over gang activity, an influx of unregulated delivery bikes, and overcrowding that left many migrants sleeping outside when the facility reached capacity.

A termination agreement that raises concerns 

For Pakistan, the abrupt termination of the agreement raises concerns, particularly regarding PIA’s anticipated revenue. The $220 million lease was a crucial financial lifeline for the struggling national airline.

According to Pakistan’s Dawn News, the hotel's condition has worsened after serving as a shelter for over a year, with reports of damage to rooms and amenities due to continuous use by residents. 

While city officials have acknowledged the need for repairs, the cost of restoring the property before handing it back to PIA could place an added financial strain on New York taxpayers or the city government.

Three days have passed since the New York mayor’s announcement, yet Pakistan has remained silent, with no official response or statement issued.

According to a San Francisco-based international law expert Ahsan Qazi, the lease termination says more about changing domestic politics than it does about US-Pakistan relations.

“This move aligns with evolving migration policies and the broader political climate under President Donald Trump,” Qazi told The Media Line.

He said that President Trump’s foreign policy is focused on Israel and Ukraine and that “a policy change toward Pakistan is not currently on the agenda.”

Depending on the contract and the local laws, PIA may seek compensation for the lease termination, Qazi said, noting that “enforcement will largely depend on the US political climate.”

Azeem Khalid, a New York-based international relations expert, described the lease termination as a “major blow to Pakistan” and its national airline. “This setback further strains Pakistan’s weakening economy, already burdened by inflation and debt,” he told The Media Line.

“Increased reliance on international aid or loans, particularly from the US or IMF, could deepen external dependencies, giving Washington greater leverage in diplomatic and policy matters,” Khalid said. “For PIA, the loss of this income worsens its financial woes, potentially accelerating restructuring efforts.”

Khalid noted that the US sees Pakistan as an important ally in terms of regional security and balancing China’s influence. The strategic partnership with Pakistan might push the US to look for other ways to collaborate with the country in light of the lease termination, he explained.

“Both nations could renegotiate terms or explore new uses for the hotel, addressing financial concerns and easing tensions,” he said.

Ashfaq Ahmed, chair of the politics and international relations department at Pakistan’s University of Sargodha, told The Media Line it was hard to say whether the decision reflects a broader shift in US policy around Pakistan. He alleged that the US’s “strong Indian lobby” influenced Mayor Adams’ decision to break the lease.

“This lobby played a key role in shaping anti-Pakistan policies during the Biden era and continues to exert influence in the new administration,” he said, pointing to Adams' recent participation in the Indian National Day parade in New Delhi as a sign of this ongoing influence.

Political instability and corruption in Pakistan have compromised the country’s ability to successfully lobby in the US, Ahmed said.

Leading Pakistani analyst Mubasher Lucman called for the iconic hotel to remain in Pakistani hands, despite the financial strain.

“The Roosevelt Hotel is a symbol of Pakistan's global presence and national pride, not merely a property asset," Lucman told The Media Line. He said that selling the hotel would be “a significant blow to our collective identity and prestige.”

Pakistan ought to prioritize long-term national interests over short-term gains, he said.

“While economic factors are important, they should not come at the cost of losing such a valuable landmark,” Lucman argued. “Pakistan must explore all possible avenues to retain and revitalize the Roosevelt Hotel, ensuring it remains a testament to the nation’s legacy.”