The contract begins on 15 May and includes a $200 per-night rent for the first year. Credit: Engin Akyurt from Pixabay

Pakistan-owned Roosevelt Hotel has received a three-year rental offer from the New York City Government (NYCG) for its 1,025 rooms, reported Dawn.

This deal is expected to bring in around $18m in net cash flows in place of more than $160m in carrying costs for the same period.

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The Economic Coordination Committee (ECC) of Pakistan’s Cabinet authorised the offer in principle.

A four-member committee was formed to discuss the agreement with NYCG and the hotel’s worker union.

While the Aviation Division and Pakistan International Airline-Investment Ltd (PIA-IL) had been collaborating on a strategy under government directives to relaunch the property through revamp and severance cost with the hotel’s worker union, New York City offered to use the building’s 1,025 rooms.

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These rooms will accommodate immigrants for three years, starting at $200 a day.

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The offer includes a 14-month guaranteed duration and a four-month termination notice period.

The contract will begin on 15 May, with a $200 per-night rent for the first year, $205 for the second year, and $210 for the third year.

New York City will cover the taxes and make a monthly rent payment of $1.74m in advance on the first of each month.

PIA-IL has to deliver approximately 500 rooms to New York City immediately on the initial day of the agreement of 15 May.

This will be followed by 400 more rooms before 30 days and 125 rooms after that. This needed $1.145m for re-opening works and was already available as a government grant through PIA-IL.

The ECC also permitted PIA-IL/RHC (Roosevelt Hotel Co) to pull out $1.14m from the remaining funds available as bridge funding to begin the hotel’s re-opening work.