DEATH : N.Y. Disco Owner Steve Rubell Dies

Steve Rubell, who revolutionized New York night life with the Studio 54 disco in the 1970s and with the Palladium in the 1980s, died today at a Manhattan hospital. He was 45.

Rubell, who went to prison with his partner, Ian Schrager, for tax fraud, died at Beth Israel Medical Center from complications resulting from hepatitis and septic shock, a form of shock that spreads through the bloodstream, said Dan Klores, a spokesman for the family.

Rubell and Schrager opened Studio 54 in 1977 and the former theater-turned-disco immediately drew leading celebrities such as Bianca Jagger, Calvin Klein and Andy Warhol at the height of the disco craze.

With his mother in the basement counting the take, the 5-foot-6 Rubell ran the door at the exclusive nightspot, blessing the elite with a nod of approval and entry to the disco temple as eager rejects milled outside, waving and crying out his name.

But the club closed in 1980 after Rubell and Schrager pleaded guilty to avoiding taxes on about $2.5 million in profits from the club.

They both served short federal jail sentences at Maxwell Air Force Base, Ala. Rubell and Schrager, however, rebounded to start the Palladium, which became just as chic and filled with celebrities as Studio 54.

Rubell is survived by his parents and a brother.