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Newsday
April 13, 2005

City Hall to save The Plaza

BY ELIZABETH SANGER
STAFF WRITER

Slide Show: Rallying for the Plaza
Photos: Inside the Plaza
What people are saying

Now City Hall is trying to help save The Plaza.

Representatives of the national landmark and of the union that has 900 members there met in the past two days at City Hall with staffers from Mayor Michael Bloomberg's office.

They've been trying to reach a compromise on the future use of the stately structure, including the number of luxury condominium apartments to be carved from the 805 rooms, sources familiar with the talks said.

With an April 30 deadline looming as the final guest checkout, the sides have been feverishly negotiating an agreement that would preserve the icon and its well-known public spaces and restaurants, maintain an ample number of hotel rooms and jobs, and provide the owner with enough condos to make a decent profit on its planned $1-billion investment.

The New York Hotel Trades Council has said it will continue to press for saving members' jobs, past the hotel closing if necessary. Sources say Bloomberg is involved because it's to his benefit to protect good-paying union jobs, particularly in an election year, and tourism is an important engine of the city's economy.

Elad Properties, which bought the hotel last year for $675 million, has built condo apartment towers and converted commercial structures to residential units throughout Manhattan. It plans to gut much of the Plaza's interior and create 200 apartments and a 150-room boutique hotel. It also wants to attract a high-end fashion retailer.

The union wants Elad to essentially split the building down the middle -- giving the better half with the Central Park views to the permanent residents -- and to keep 350 hotel rooms and 450 jobs.

Prominent New Yorker Ronald Lauder stepped in recently to try to forge a deal, believing the Plaza should be preserved as a landmark and a world-famous hotel.

To explain its plans to restore the 98-year-old hotel, which is showing its age, Elad launched the first of hundreds of television commercials Tuesday that will run for two weeks, as well as a Web site (www.ReallySaveThePlaza.com). The union also has a site on the issue (www.SaveThePlaza.com).

Elad says the best-known interior spaces, including the Grand Ballroom, Palm Court and Oak Room, won't undergo structural modifications. However, Elad will introduce "highly appropriate retail uses within its most important public spaces." And it talks about designing "horizontal and vertical circulation," which in layman's terms means installing escalators and corridors. Only the exterior has landmark status.

Elad says the renovation will generate $100 million in additional annual revenue for the city. A source said Elad has been offered more than $1 billion to sell the Plaza and walk away from the controversy, but turned down the bids.

In a related matter, the City Council will hold a hearing today on a proposal by the union that would limit the number of hotel rooms that could be converted to condos. Elad hired Harvard Law School professor Laurence Tribe, and he is expected to argue that the measure is unconstitutional.

Copyright © 2005, Newsday, Inc.
 
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