The cofounder of Studio 54 and inventor of boutique hotels explains why he opened his new luxury hotel in one of the most-hated parts of New York City

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Ian Schrager just opened his New York EDITION hotel in Times Square.

• Legendary hotelier Ian Schrager just opened a new luxury hotel in one of the most-hated parts of New York City: Times Square.
• Schrager says he's almost always opened his hotels in "terrible" neighborhoods, and it's always worked out.
• He said he thinks Times Square will start seeing more great hotels and restaurants and "sophisticated retail."
• "I see Times Square continuing to evolve," Schrager told Business Insider. "It has always been, even in its heyday, a mixture of highbrow and lowbrow. That's what gives it an advantage."

Some might see opening up a new luxury hotel in one of the most-hated parts of New York City as a risky move.

But Ian Schrager isn't worried.

The legendary hotelier just opened his New York EDITION in Times Square, the crowded, widely-hated neighborhood avoided by most New Yorkers. The 452-room luxury hotel includes a restaurant run by a Michelin-starred chef, an outdoor terrace, and a nightclub.

Schrager, who's credited with creating the boutique hotel, told Business Insider he's opened almost all of his hotels in "terrible neighborhoods" - and it worked out just fine.

"I did it in Miami with the Delano. Terrible neighborhood when I opened that up," he said of Miami Beach. "I did it in West Hollywood with the Mondrian. That was a terrible neighborhood when I opened up."

Nikolas Koenig

A restaurant at Schrager's newly opened New York EDITION.

In fact, Schrager has been working on projects in Times Square for years. He co-founded the legendary nightclub Studio 54 in the area, which was known for its wild, star-studded parties in the 1970s and early '80s.

"So for those who think we won't be able to attract the kind of people that we want to come here, all they have to do is come to the hotel on any day and see who's here," Schrager said.

Times Square will continue to evolve and 'create excitement'

For Schrager, Times Square is just going through a low period.

"Any great city changes or evolves and goes back and forth like the ebb and flow of a river," he told Business Insider.

Schrager pointed to now-trendy Manhattan neighborhoods like Tribeca and the Meatpacking District, not to mention Bushwick and Williamsburg in Brooklyn, all of which were once far from glamorous.

He says Times Square has always been "a mixture of high brow and low brow" - and that's what gives it an advantage.

"That's what made Studio 54 so successful," Schrager said. "High brow and low brow, high art and low art. And I think that combination always creates excitement."

For Schrager, Times Square is on the precipice of transformation.

"I have a hope that this hotel will attract a lot of other great hotels, a lot of other great restaurants, and a lot of other more sophisticated retail," Schrager said, "and be [the] thriving, bustling, naughty and bawdy place that Times Square was historically."