On this day in 1977, crowds gathered outside 254 West 54th Street in New York City waiting and hoping for a chance to enter what would soon become the global epicenter of the disco craze and the most famous nightclub in the world: Studio 54,.
The masterminds behind Studio 54 were Steve Rubell and Ian Schrager, college roommates at Syracuse University who got into the nightclub business after their first venture, a chain of steak restaurants, failed to flourish. But before taking Manhattan by storm and becoming famous for openly and shamelessly excluding all but the most chic, famous or beautiful patrons from their establishment.
Rubell and Schrager sunk about $400,000 to renovate the old CBS studio which was a giant risk.
A relatively unknown woman who deserves the lion’s share of the credit for making 54 into the celebrity playground that it became was Carmen D’Alessio, a public-relations entrepreneur in the fashion industry, whose Rolodex included names like Bianca Jagger, Liza Minnelli, Andy Warhol and Truman Capote. Her buzz-building turned the grand opening into a major item in the New York gossip columns, and her later efforts—like having Bianca Jagger ride a white horse into the club for her 30th birthday party—stoked the public’s fascination with Studio 54 even further. Not just the usual celebrity suspects—actors, models, musicians and athletes—but also political figures like Margaret Trudeau, and even Jackie Onassis.
We’ll never know the amount of cocaine that went up nostrils at Studio 54 – suffice it to say, the tons of glitter dumped from the ceiling helped conceal the thin layer of wall-to-wall powder. While blue-collar Americans stood in line to never make it past the velvet rope, the popular people snorted and cavorted under big sparkly disco balls.
Ian Schrager, took more of a behind-the-scenes role, but Steve Rubell basked in the glory of his newfound celebrity status. Rubell was often spotted in gay NYC clubs, and was infamous for pressuring his own bartenders and busboys to sleep with him to stay employed and get ahead, but still, for some reason, remained in the closet. Soon, this double lifestyle and intense drug use took its toll.
Rubell could be a real dick to his employees. Attribute it to his drug use and insane lifestyle if you wish, but whatever the case, it created some disgruntled employees…. one in particular would cause the whole thing to come crashing down.
A male waiter went to the IRS and told them about Rubell and Schrager’s shady bookkeeping practices. Apparently, they had been keeping vast sums of cash in Hefty garbage bags and stowing them in the ceiling. Turns out, Rubell and Schrager had only paid $8,000 in taxes since they opened, while were making more than $75,000 per night.
Rubell hired close friend and the infamous and vilest closet case lawyer Roy Cohn to represent him and also bargained with the IRS, saying he would reveal a big secret if they’d be lenient.
The secret? Rubell claimed that President Carter’s Chief of Staff, Hamilton Jordan, had snorted cocaine in the Studio 54 basement. The allegations couldn’t be substantiated, but they made life miserable for Jordan. They brought scandal to the White House and had the FBI knocking on Jordan’s door.
In the end, Rubell and Schrager pled guilty and were sentenced to three years in prison.
Studio 54 was over. Liza Minnelli sung “New York, New York” at the farewell party and the doors were closed. It reopened in the 1980s under new management, but it just wasn’t the same. Disco was dead.
After serving their sentences, Rubell and Schrager amazingly rebounded and became “respectable” hotel operators – making more money than ever.
Steve Rubell died of AIDS in 1989, but Ian Schrager has kept the hotel business thriving to this day.