The Plaza's most famous resident, the storybook heroine Eloise, will soon get a few new neighbors. Elad Properties, a Manhattan-based real estate firm, is transforming New York's iconic 805-room hotel into a high-end mixed-use project that will include 200 luxury condos, 150 five-star hotel rooms, and 160,000 square feet of retail space.
This century-old stomping ground for the rich and the famous closed its doors at the end of April (as scheduled at press time) to undergo its first-ever complete makeover.
“There's been no major capital improvement program at the Plaza since it opened in 1907,” says Steve Solomon, a spokesperson for Elad, which purchased the Plaza last year for $675 million. “[The property] really needs to be reenergized and revitalized and brought into the 21st century.”
Elad plans to pour another $350 million into capital improvements. Plans call for one- to four-unit condos to occupy the top 12 floors of the building, with a few units on the lower floors facing Central Park. The new hotel rooms will be located on the lower floors along the 58th Street side of the property. The cherished interior spaces, including the Grand Ballroom, the Palm Court, and the Oak Room, will not undergo any structural changes, Solomon adds.
Although Elad has the rights to transform the entire Plaza into condominiums, the developer chose to include hotel rooms to keep the building's historic nature alive, says Solomon.
But not everyone sees Elad's plans as a fair compromise, and the project is causing a wave of uproar in the Big Apple. The New York Hotel Trades Council, which represents the Plaza's 900 workers, launched a $2 million-plus public relations “Save the Plaza” campaign.
“First and foremost, we are against the conversion because it is going to cost 800 really good [hotel] jobs,” says Peter Ward, president of the council, which wants just 20 percent of the hotel units to be converted to condos.
However, the council's fight to save the Plaza is part of a much larger battle: an effort to stop all New York City hotels from going condo, a hot trend in the city. “[These conversions] are very bad for our city, and they are going to reduce the amount of rooms to the point where we won't have the ability to hold conventions and host important events,” says Ward, who is seeking legislation at the city council level to ban these conversions.
The hotel union isn't fighting alone. John Finan, chief executive of New York City Consulting Group, a real estate brokerage and hotel investment firm, drives around a 34-foot RV with the message, “Save the Plaza: It's a Landmark!” Finan hopes to raise $300 million to buy as much of the hotel as he can (although Elad has no intention of selling). “I hope it gets saved so it doesn't just become this modern mall type,” says Finan.
Elad insists that the Plaza will maintain its historical significance as an elegant New York City landmark. Plus, the renovation will create 1,200 new unionized construction jobs for nearly two years, as well as another 150 unionized hotel jobs when the hotel reopens in the fourth quarter of 2006.
–Rachel Z. Azoff