Jay Pritzker, Who Built Chain Of Hyatt Hotels, Is Dead at 76
By ANTHONY RAMIREZ
Published: January 25, 1999
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Jay Pritzker, whose hunch in the 1950's that America's restless business executives would flock to hotels near airports prompted him to build the Hyatt hotel chain, died on Saturday of cardiac arrest at Northwestern Memorial Hospital in Chicago. Mr. Pritzker, who had a history of heart trouble, was 76.
Despite a personal aversion to publicity, Mr. Pritzker and his brother Robert were routinely celebrated on the world's financial news pages for their business acumen.
But Mr. Pritzker, his wealthy family and their business empire were also involved in controversy and conflict. The Internal Revenue Service accused the family of trying to avoid taxes on the estate of Mr. Pritzker's father. After Government regulators struck deals with Mr. Pritzker and other investors to aid troubled savings and loan associations, many of those deals were criticized in Congress as being too generous. And Mr. Pritzker became one of the best-known corporate raiders of the 1980's.
As two of the world's richest men, Jay and Robert Pritzker built their company, the Marmon Corporation, into a conglomerate that over the years had interests in Braniff Airlines, McCall's magazine, Levitz Furniture and Ticketmaster as well as casinos in Las Vegas and Lake Tahoe, Nev., and Atlantic City. Last year, Forbes magazine estimated the brothers' net worth at $13.5 billion, up from $6 billion the year before.
Jay Pritzker was a trustee of the University of Chicago and in 1979 endowed the Pritzker Architectural Prize, sometimes called architecture's Nobel Prize, which carries a $100,000 award. He also founded the Nancy Friend Pritzker Laboratory for the study of clinical depression at Stanford University. It is named for his daughter.
A lawyer and accountant by training, Mr. Pritzker began buying small companies when he was 29, first timber mills, then a small metal-goods company. But he was best known for the business deal he hatched in 1957 over a cup of coffee at a coffee shop called Fat Eddie's at Los Angeles International Airport.
While waiting for a flight, Mr. Pritzker noticed that Fat Eddie's seemed to be unusually busy, and that the hotel in which it was situated did not have any vacancies. The hotel -- named after its owner, Hyatt von Dehn -- was for sale, and Mr. Pritzker decided on the spot to buy it and Fat Eddie's, writing his offer of $2.2 million on a napkin.
Mr. Pritzker bet, correctly, that business executives like himself would want to stay at a high-quality hotel near a large airport. The Hyatt was ''simply the first first-class hotel that I had ever seen at an airport,'' Mr. Pritzker later told The Chicago Daily News.
After building a second Hyatt hotel in Burlingame, Calif., near San Francisco International Airport, the brothers went on to develop properties near airports in Los Angeles, San Francisco and Seattle, then around the country and internationally. The Hyatt Hotels Corporation, which last year had revenue of $3 billion, has 182 hotels, with 34 under construction.
''He had a lot of guts,'' said Douglas G. Geoga, president of the Hyatt Hotels subsidiary, recalling that Mr. Pritzker in 1967 bought a half-finished hotel in Atlanta and turned it into the Hyatt Regency. The first of the giant atrium hotels, the Hyatt Regency Atlanta struck doubters as a white elephant, Mr. Geoga said.
Mr. Pritzker, he recalled, said that some visitors were actually worried that the Regency's atrium was so tall that hot air would rise, condense and form a miniature rainstorm inside the hotel. Mr. Pritzker liked to gently scoff that ''that sort of concern reflected a degree of overeducation,'' Mr. Geoga said.
Despite the Pritzker clan's wealth, after Mr. Pritzker's father, Abram Nicholas Pritzker, died in 1986, his heirs contended that no estate taxes were due. They noted that for years the elder Mr. Pritzker had been shifting his assets into trusts in the Bahamas that held the assets on behalf of his children and grandchildren. His heirs said that when he died, he no longer owned enough to owe any taxes.
The I.R.S. called the trusts a sham and sent a bill for $53.2 million. But in 1994 it settled with the Pritzkers for $9.5 million plus interest. One of the I.R.S.'s problems was that the Bahamas has strict secrecy laws, and it could not get enough records to accurately place a value on the holdings.
Also in the 1980's, the ITT Corporation staved off a hostile takeover bid begun by Mr. Pritzker, who was flexing his raiding muscle.
In the same decade, after loosened lending rules and a real estate collapse left many savings and loan associations buried in bad loans, regulators decided that the cheapest way to heal the lenders was to encourage them to merge with healthier institutions or find new investors. That was why regulators struck deals with Mr. Pritzker and others -- and the Congressional criticism followed.
In 1996, the Supreme Court ruled that the Government had betrayed investors by changing the rules of the bailout at the height of the savings and loan crisis. In November 1998, Mr. Pritzker was among those who sought billions of dollars through civil lawsuits contending that Washington had unfairly changed the deals' terms by ending a favorable accounting practice.
And the Pritzker family's 17-year partnership with Donald J. Trump in the Grand Hyatt Hotel in New York was often rancorous. The two sides wrestled over the management of the property and sued each other in the early 1990's before Mr. Trump sold his half interest to the Hyatt Corporation for $140 million in 1996.
Jay Pritzker was born on Aug. 26, 1922, to Fanny Doppelt and Abram Nicholas Pritzker and was the grandson of Nicholas and Annie Pritzker.
Mr. Pritzker majored in accounting and received a bachelor's degree from Northwestern University in 1941. His grandfather founded a Chicago law firm, now called Pritzker & Pritzker, where Jay Pritzker worked for a time after graduating from Northwestern University Law School in 1947 and serving in World War II as a naval aviator.
Mr. Pritzker is survived by his wife, Marian, their four children and 13 grandchildren and his brother, Robert.
Mr. Pritzker's brother Donald and his oldest child, Nancy, died in 1972.
Photo: Jay Pritzker (Associated Press, 1992)
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