Jay-Z‘s 40/40 Club opened in 2003 to much fanfare, garnering callouts on its owner’s songs, hosting birthday bashes for basketball players and generally becoming a hub of celebrity carousing in New York.

But for trendy nightspots, fame can be as fleeting as it is for the luminaries who populate them. The 40/40′s star faded over the years, dogged by declining attendance and labor disputes with workers. The club developed the worn-out air of a frat house the day after a big party. Even Jay-Z seemed tired of the place, instead frequenting locales like The Spotted Pig, a West Village gastropub he co-owns.  It was clearly time for a change, and last year the 40/40 Club closed down for renovations.

Six months and $10 million later, the club re-opened this past January with a party hosted by Jay-Z for his friends and admirers, including Spike Lee, Wale, Ashanti, C.C. Sabathia and Warren Buffett. Designed by Jeffrey Beers, the new layout is much more open–the main room features stadium-style seating opposite a wall of jumbo HD televisions. A “champagne tower” soars behind the bar, comprised of golden Armand de Brignac bottles valued at $1 million (retail, that is–for a more detailed exploration of Jay-Z’s champagne, check out Chapter 7 of my book on the rapper).

There are ample resources to fund the club’s renovation, as Jay-Z boasts a personal fortune of $450 million by our last estimates; his co-owners no doubt have significant resources as well. But being a savvy businessman, Jay-Z certainly isn’t interested in pouring money into ventures that won’t provide a substantial return. So how profitable is the club, and how long will it take to pay of the renovation?


Two years, according to manager Tommy Rebello, whom I interviewed last week after a private media tour of the club. By that back-of-the-envelope math, that means 40/40 is projecting profits of $5 million per year, about $415,000 per month or $14,000 per day. Rebello says at least 12-15% of that is expected to come from rentals of private rooms, which command upwards of $2,000 per night for rental and food/drink fees.

The refreshed club has already undergone some adversity, briefly closing the day after its grand re-opening because of health code violations. But Rebello seemed optimistic nonetheless, suggesting that the renovations will bring in more visitors from the after-work crowd in addition to new weekend partygoers. He also touted the new menu created by Mike Shand, Jay-Z’s personal chef (the New Zealander traveled the world with the rapper on his Blueprint 3 tour and still cooks for him outside of the 40/40).

In the end, the speed with which the club can recoup its renovation cost will depend on the rate at which it can attract patrons–and with its most famous founder spending fewer nights out on the town in the wake of Blue Ivy Carter’s birth, the 40/40 Club will have to stand out on its own to a much greater extent this time around.

UPDATE: Through a spokesperson, 40/40 Club co-owner Juan Perez has informed me that the club is now projected to pull in annual profits of $10 million, not $5 million. If those projections are accurate, the cost of the renovation will be covered in one year, not two.