New York Plaza hotel wins partial reprieve
17.09.2009, 09:43
NEW YORK - Workers at the fabled New York landmark Plaza Hotel have won a reprieve of sorts from Yitzhak Tshuva, the new owner of the hotel through his Elad Properties
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An agreement was reached yesterday between Elad - which had planned to close the hotel and convert the site into condominiums, commercial space and a smaller 150-room hotel - and the Plaza workers.
According to the agreement, brokered by New York Mayor Michael Bloomberg, Elad will preserve the Plaza's historic halls, and twice the amount of the hotel than originally planned will remain as part of the renovated hotel.
The agreement followed a very public outcry and vigorous PR campaign run by the workers, including a mission to Israel to drum up support and convince Tshuva to reconsider.
Elad's original plans envisaged converting the 805-room Plaza into luxury condominiums, a upmarket commercial space and a 150-room hotel. The agreement enlarges the size of the planned hotel, which will now number 130 regular hotel rooms and 220 luxury hotel apartments. The Plaza's iconic rooms - the storied Oak Room bar, the ballroom and the Palm Court - will all be preserved. The commercial space will be less than originally planned.
The reprieve that the workers union wrestled from Elad Properties is no small matter. When the company bought the hotel, with its listed Beaux Arts exterior, for $675 million last year, it announced that it would invest a further $350 million. The revised plans could lessen the attractiveness of the development project, particularly as the market for luxury condominiums is teeming, and a hotel or apartment hotel seems less financially rewarding.
The Plaza will close as planned at the end of the month, and the renovations and conversions are expected to continue until the end of 2006.
"New York Mayor Michael Bloomberg steered this important agreement to the benefit of both parties," Tshuva said yesterday. "Bloomberg applied his great leadership and prestige to ensure the important balance between the legal and natural rights of the developer and the rights of the workers, between the desire to encourage investments and the public interest, and between the preservation of the Plaza's historic assets and raising the necessary resources to do so."