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Likely Stories Mansion Maker

He built Rosewood into the world’s most respected luxury hotel company, then brokered the deal that will finance its expansion. Now he’s out. Here’s why.
By Kimberly Goad |

THE HAPPY COUPLE WAS FLUSH with the promise of good looks and wealth.

Rosewood Hotels & Resorts was the blueblood bride who had chosen as her intended the hotel investment group Maritz Wolff. It was clearly a marriage of convenience: The well-born Rosewood (parent company of The Mansion on Turtle Creek and Hotel Crescent Court) needed cash to maintain its aristocratic lifestyle. And Maritz, a well-to-do commoner, was willing to provide it.

But the ink on the contract was barely dry when the matchmaker who made the introduction and helped consummate the deal was pushed aside. Rosewood president and CEO Atef Mankarios had offered the bride in marriage, only to find himself excused like a bad relation.

On the day Rosewood announced the merger, an attorney with the firm passed Mankarios in the hall. He had composed the press release announcing the joint venture and wanted to run a few salient points past Mankarios.

“By the way.” the attorney said, holding a copy of the release in his hand, “you’re the new chairman of the company.”

Mankarios knew at that moment he would not be part of the new fam-ily picture. Real appointments aren’t made in passing. Indeed, in the days to follow, Mankarios found himself left out of meetings. Decisions regarding the staff of the new venture were made without his consent. Rosewood matriarch Caroline Rose Hunt, the oil heiress who founded the company in 1979, grew distant.

“The family didn’t anticipate or foresee what was going to transpire,” Mankarios says, in defense of Hunt and her five children, otherwise known at Rosewood as “the family.” “Unfortunately, like any other large family business, there is always the odd person in the hierarchy. You know what they say: It’s not the king; it’s the king’s servant. Usually there is a king’s servant somewhere who is overzealous and eager to gain favor.”

The servant, in this case, was one of Hunt’s attorneys. And apparently, the king was listening when the servant cried, “Off with his head!”

MANKARIOS WAS-STILL IS-THE ORIG-inal details man, It was Mankarios who took Rosewood’s flagship. The Mansion on Turtle Creek, from a rich woman’s plaything to an internationally respected five-star hotel and restaurant. As the hotel’s managing director from 1987 to 1989, he instituted what has become a tradition at all Rosewood hotels: the morning “arrivals meeting” at which department heads review the day’s arrivals through a computerized dossier listing each guest’s likes and dislikes. What distinguishes any luxury hotel, he used to tell the staff of every Rosewood property, is the attention to detail, “hundreds of thousands of details-on a daily basis.” Linens were not simply all-cotton, but all-cotton sheets of 200 thread count. Room service wasn’t simply available 24 hours a day. but with items featured on the menu of the hotel’s five-star restaurant.

Mankarios was an old-style hotelier in a world that had largely forgotten about the personal touch. He visibly winces at the notion of computerized anything in a luxury hotel. When he left Rosewood in January 1998, he was still debating Jeff Trigger, the managing director of the Mansion, over the merits of voice mail.

His philosophy, not coincidentally, was perfectly reflected in the company’s matriarch. By 1990. the year Mobil Travel Guide awarded the Mansion the much-coveted Five Star Award. Caroline Hunt had promoted Mankarios to president of Rosewood. He promptly set the family business on an aggressive course of expansion. With the opening of the Lanesborough in London, Hotel Al Khozama in Saudi Arabia, and Las Ventanas AI Paraiso in Los Cabos, Mexico, among others. Rosewood became known in the industry as the boutique operation in Dallas, Tex., with an uncanny knack for developing and operating luxury hotels on little capital.

“Right or wrong-and obviously it proved to be wrong in the end-1 always considered Rosewood my own company,” Mankarios says. “In making decisions, in carving a path. I always behaved in that manner. But at the end of the day, you get a rude awakening. Someone says, ’Oh by the way. we’re selling half the company’ or ’We’re bringing new people in. ’And then you realize this really isn’t your baby. You’re raising someone else’s child and the parents now want it back.”

Initially, they didn’t even want it back; they simply wanted a little help with the finances. Rosewood had grown into an internationally known operation, with seven hotels and resorts on four continents, without benefit of outside money.

However, in early 1997, Rosewood, though extremely profitable, was in need of an infusion of cash if it were to compete for properties and management contracts with the real estate investment trusts that were suddenly dominating the market. As Mankarios saw it. the family had two options: ante up the money themselves or find a strategic partner to supply the cash. The family voted for the latter. And Mankarios went looking for a potential suitor. By spring, he’d found Maritz Wolff, the parent company of five Four Seasons hotels. By September, marriage was imminent.

Glasses were raised. Vows were exchanged. Maritz liked the prestige of its new bride. Rosewood liked its wealthy new in-laws who seemed sincere when they promised not to upset the family tree.

But why would they? The industry had long known Rosewood as the hotel management firm doing surprising things without money.

“We collectively-mistakenly-thought, ’This is working, this is very successful. Why tinker with a successful formula?’ But you don’t buy a new toy and not play with it,” says Mankarios, who, with the benefit of hindsight, feels naive, “even clumsy.”

“I should’ve tried to get more involved in the initial setting up of the venture. I should’ve been more alert,” He should’ve asked for a prenup.

Ultimately, the matchmaker who arranged the marriage was forced out in a divorce cloaked in secrecy.

“Whenever you have a divorce, there are hurt feelings-on both sides,” he says. “So friends begin to speculate: ’Did he have an affair? ’ ’ Did she have an affair?’ ’ Did he take the money and gamble it away in Las Vegas?’ Both parties felt it was time to move in different directions. Both parties felt there was life without one another.

“It was a true divorce.”

Indeed, by the time Mankarios packed up his things and left-three months after the merger-he and Hunt were no longer speaking.

IT IS A YEAR LATER WHEN MaNKARIOS agrees to meet with me to talk about his new family: Foresthills Hotels & Resorts. Like Rosewood, Foresthills is tar-getting the high-end luxury hotel market. Unlike Rosewood, Foresthills will allow each property to develop its own individual identity.

I am sitting in the company’s conference room waiting for Mankarios to appear when a pinstriped executive walks in, introduces himself, offers his business card and a handshake, and then takes a seat at the round table. Soon, a second executive makes his entrance, introduces himself, offers his business card and a handshake, and then takes his seat at the round table. He is followed by a third. And a fourth.

When Mankarios enters the room, he has a big smile on his face. A year after the divorce, he is the patriarch of a new dynasty, a dynasty made up of former members of the Rosewood family. He’s taken custody of Rosewood’s controller, ils VP of marketing, director of training, VP of engineering and construction, and its VP of development, as well as assorted secretaries and assistants.

“It has always been my belief thai people are not interchangeable, they’re not spare parts,” says Mankarios, who, in the end, was treated like nothing more than a spare Rosewood part. “You can’t say, ’I’m going to get another CFO or another developmental engineer.’ It doesn’t work that way.

“We have all been together for the past decade. We built Rosewood from the Mansion and the Crescent into a global company operating on four continents. We schlepped our presentations 5,000 miles, we slept in airports together, we spent days on long trips to Asia peddling what was in our heads.”

With that, Michael Matthews-the former Rosewood exec turned Foresthills VP of marketing and sales-begins scribbling notes on a piece of paper. ’I’m not as polite as Atef,” he says, reviewing his notes and then folding the piece of paper and hiding it in his coat pocket. “There’s something that happens in everybody’s life that counts far more than anything else. It’s a simple word called “loyalty.”There’s tremendous loyalty to Atef.”

After the merger, “the culture at Rosewood changed almost immediately from ’no manuals’ to ’manuals,’” Matthews adds, in an oblique reference to the famous Mankarios dictate that company manuals are for black-and-white thinkers.

Mankarios launched Foresthills three weeks after he left Rosewood. Once he secured the financial backing for his new company nine months later, he began luring his old cronies.

By the end of last year, Rosewood had lost the guts of its operation.

With Foresthills, Mankarios is looking for more than a paycheck. He’s looking to prove that his aesthetic is still valid in a changing world, a world in which even the top hotels fly the flag of a parent corporation. Of course, this is the man who still gets worked up over the larger implications of installing voice mail in a hotel like the Mansion or the Lanesborough or Las Ventanas, the three Rosewood children he says he’s most proud of.

“I like voice mail as much as everyone else,” he says, unconvincingly. “But do you really need it to take over your life and be rubbed in your face continuously wherever you go? Or do you need a little bit of a respite?”

Mankarios and Hunt, meanwhile, still haven’t spoken, although her oldest son, Stephen Sands “has called to say, ’How are you? I’m thinking of you,’” says Mankarios.

As for Hunt, a savvy businesswoman who rarely turns down an opportunity for press, she refused my request for an interview. Through her New York publicist she offered this terse assessment of Mankarios: “Atef made significant contributions during his tenure at Rosewood. Since his departure, our new team headed by Jim Brown has made excellent progress.”

“I don’t know if she can show support,” says Mankarios. “Not that she doesn’t have it. 1 just don’t think that politically…”

He pauses midsentence. This man who. even in casual conversation, speaks in metaphors, is fumbling for the right words. “1 wish we’d had the opportunity to say goodbye to each other. But we live in the same city. Ultimately, we will run into each other.”