N.Y. Hotelier Schrager Buys the Mondrian : Acquisition: The West Hollywood landmark goes for $17.4 million. A $15-million renovation is planned.

Ian Schrager, the disco impresario, convicted tax evader and New York hotelier, has purchased the stylish Mondrian hotel in West Hollywood for $17.4 million.

Schrager, 48, who with his late partner Steve Rubell helped define 1970s glitz with his Studio 54 disco in Manhattan, completed the purchase of the Mondrian Friday from a group of banks that had taken control of the hotel from previous owners Severyn Ashkenazy and his brother.

The Mondrian, located on the Sunset Strip and site of an annual post-Oscar gala, is slated for a year-long, $15-million make-over, Schrager said Monday. The renovation will include a new restaurant and club.

Schrager bought the hotel with help from the Amstar Group, a Denver-based real estate investment firm that has joined with Schrager in previous hotel deals.

The Mondrian, an all-suites hotel where rooms start at $125 a night, is Schrager’s first Los Angeles-area venture.

“I’m a big believer in the L.A. market,” Schrager said. “We want to inject our culture and our aesthetics into (the hotel), make it special and make some magic here.”

In the 1990s, Schrager has concentrated on buying and renovating boutique hotels, including the exclusive Morgans, Royalton and Paramount hotels in Manhattan and the Delano in Miami.

The hotels, characterized by intimate rooms and avant-garde design, have proven popular with celebrities, said a spokeswoman for Schrager’s Morgans Hotel Group.

Schrager first made his mark on the hospitality business in partnership with Rubell, whom he met in college. The two presided over Studio 54, New York’s most exclusive nightclub, at the height of the disco era.

The party ended in 1979, when the two were convicted of tax evasion in connection with a cash-skimming scheme at the club.

Schrager eventually served 13 months in federal prison. The pair sold Studio 54 afterward; Rubell died in 1989 from hepatitis.

In Los Angeles, meanwhile, the Mondrian was a jewel in the crown of luxury hotels owned by Ashkenazy and his brother, Arnold, an art dealer in West Los Angeles, through various partnerships. Their holdings included the Bel Age, L’Ermitage and other boutique hotels in West Hollywood.

In the mid-1980s, low occupancy and high debt caused liquidity problems for Ashkenazy Enterprises, the partnership that owned the Mondrian and other hotels, and another partnership that owned L’Ermitage, said Michael Morris, a lawyer who represented the partnerships from 1986 to 1994.

The partnerships filed for bankruptcy protection in the mid-1980s in an effort to restructure their debt loads. Ultimately, however, banks foreclosed on the hotels and sold them off.

The L’Ermitage was sold for $12 million in 1993 to a New York investment group after Independence One Bank of California assumed control.

Crossland Federal Savings Bank in New York led a group of lenders that took over the Mondrian in the early 1990s. It was that group that sold the hotel to Schrager last week.

Last year, Ashkenazy Enterprises converted its bankruptcy filing to Chapter 7, or liquidation, and effectively went out of business, Morris said.

On Monday, Severyn Ashkenazy was traveling in Russia and could not be reached, an assistant said. Arnold Ashkenazy declined to comment.