Ian Schrager has seen many things in his life, but nothing quite like this. The 73-year-old Studio 54 co-founder is freaking out on the phone.

“It’s funny after 40 years! Forty years!” he exclaims. “Doing an exhibition on Studio 54? In a world-class museum? I don’t think anyone would have believed that – but they were too busy dancing.”

The sprawling exhibition Studio 54: Night Magic will open soon at the Brooklyn Museum, featuring more than 650 objects, artworks and memorabilia that pays tribute to the legendary disco nightclub. From black-and-white photos to records, cameras, couture, platform heels and VIP drink tickets designed by Andy Warhol, it traces the influence of this beacon of New York nightlife (and yes, there is a booming soundtrack playing disco classics, including I Will Survive, in the background).

“It’s kind of amazing the way, all of a sudden, it has exploded,” says Schrager. “I finally felt comfortable after all these years of really not talking about it; it almost destroyed me.”

Studio 54 is the subject of a recent documentary on Netflix and a Rizzoli book, where the first page reads: “Only one person can tell this story.” (His business partner, Steve Rubell, died of Aids complications in 1989.) Though the club is remembered as a celebrity hotspot – Mick Jagger, Elizabeth Taylor and David Bowie were guests – it came to a swift end when the co-founders were jailed for tax evasion in 1980.

“I was lucky enough to get a presidential pardon,” says Schrager, in 2017, by then president Barack Obama. “Now, there’s this exhibition.”

It was in midtown Manhattan where the Brooklyn-born entrepreneurs turned a former TV studio and opera house into the hottest nightclub of the 20th century, from 1977 to 1980. Despite its short run, Studio 54 has had a lasting impact on music, fashion, photography and pop culture, fostering the boom and buzz of celebrity culture.

Ian Schrager. Photograph: Alamy Stock Photo

“It was the beginning of the age of celebrity,” recalls Schrager. “Now, 40 years later, the idea of celebrity has become a parody of itself.” He explains: “When we got started, you became a celebrity when you accomplished something. Now, you become a celebrity without accomplishing anything. It’s completely upside down, but I guess that’s the way it is now.”

The exhibit features more than 250 photos, from Brooke Shields in the DJ booth with Calvin Klein, Grace Jones singing at 3am while pointing a gun at the audience, Bianca Jagger seated on a white horse on the dancefloor, Halston kissing Liza Minnelli, Tina Turner laughing with Francesco Scavullo, Diana Ross with a balloon on New Year’s Eve and Truman Capote passed out with a hat over his face.

“Any celebrity that came into New York made a stop on The Tonight Show, then made a stop at Studio 54,” says Schrager. “That’s just the way it was.”

The photos are not posed portraits; they’re spontaneous moments captured on the dancefloor, in motion, off the cuff moments that capture the energy, style and raucousness of the era.

“There was definitely a ‘no photo’ policy,” he says. “But a lot of the photographers were friends.”

Studio 54 is remembered as the first non-judgmental, queer-friendly mainstream nightclub, which was not unlike an adult amusement park. It was a mix of gay, straight, rich and poor. It’s also one of the few places trans women were welcome, and roller skating was allowed on the dance floor. It’s where Elton John danced with the drag queen Divine, and where stars like Farrah Fawcett and Sylvester Stallone danced to escape the everyday.

Bethann Hardison, Daniela Morera and Stephen Burrows at Studio 54 party for Valentino in 1977. Photograph: Rose Hartman

With its growing demand, Schrager invented the red velvet nightclub rope at Studio 54 after seeing how crowds were controlled in movie theatres. But it wasn’t meant to keep anyone out. In fact, there was no real hierarchy for the clientele at Studio 54, according to Schrager. “We never believed in having a VIP area because it would take all the great people out of the room, and the other people would be short-changed,” he says. “As a general rule, we still don’t believe in taking those great people out of the room.”

The exhibit features Schrager’s old business cards, telegrams, party invitations and his handwritten day planners, reminding himself to get a liquor license for the club (which he failed to do, and wound up having to close the club for a short period of time).

There’s Elizabeth Taylor’s sapphire necklace, which she wore to the club in 1979, paparazzi photos by Ron Galella, Interview magazine covers with Cher, glittery outfits by Yves Saint Laurent and vitrines devoted to architectural drawings.

Probably the most famous Studio 54 photo was the shot of Bianca Jagger seated on a horse, but Schrager remembers other moments, as well. “I remember Margaret Trudeau dancing and making sure the photographer got it, because we knew it would be big press, big media,” he says of the former first lady of Canada.

“I remember Andy Warhol walking around with his camera, in a funny kind of way, you might want to say he was the one who invented selfies,” says Schrager. “When I see a Studio 54 photo, it’s just like yesterday. I have a lot of fun memories of the club, the only sad thing is that Steve Rubell isn’t here to see this redemption, after 40 years.”

Francesco Scavullo and Tina Turner in Studio 54 in 1977. Photograph: Rose Hartman

In one photo, Rubell sits with TV host Tom Snyder underneath a wooden sculpture of a moon with a spoon to its nose. It’s a stage sculpture designed by Richie Williamson.

“That piece has been totally, totally misunderstood, I want to explain,” says Schrager. “People thought we were celebrating drugs, far from it. When you have a club, it’s supposed to be cool, subversive to the status quo, a little arrogant, underground, we thought that was a way to present it. It’s a bit subversive and risque, but that’s what a nightclub is about.”

His time behind bars and Rubell’s passing are not easy subjects. “I just think the only nightclub people I knew who survived the whole experience were Steve and I,” says Schrager. “We barely survived because it almost destroyed us.”

Was it worth it all? “Certainly,” he says. “Would I do it again? Not if it ended up in the same way. Knock on wood.”

Though the nightclub’s success is much envied and has been copied countless times, the magic recipe is still unknown.

“I can’t tell you what the definition of what magic is, but we all know it when we walk into a place and it has that electricity in the air,” says Schrager. “We all know it, feel it and when you walked into Studio 54, you felt it.”

That same spirit lives on at Schrager’s new nightclub, Paradise Club, on the seventh floor of the Times Square Edition hotel. It’s where Diana Ross performed for its opening night, red lights line the ceiling, Keith Richards hangs out with his daughters and where one can see a risque stage performance based on William Blake’s book The Marriage of Heaven and Hell.

“It’s so rare to create that environment again,” says Schrager. “Don’t forget there’s limitations, laws and regulations, you can only go so far, I don’t have to go as far as I did before. In a way, the human condition is unchanged; you just have to find out, unlock it and have a catalyst to get everyone to let loose and have fun.”