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Elad Properties Backs Down from Controversial Plan for
 the 805-room Plaza Hotel; Fewer Condos, More Hotel
 Rooms Provides Union with More Jobs Saved

By Elizabeth Sanger, Newsday, Melville, N.Y.
Knight Ridder/Tribune Business News

Apr. 15, 2005 - Six-year-old Eloise, The Plaza's most famous and longest-staying guest, will absolutely sleep well tonight.

After four days of virtually round-the-clock negotiations at City Hall with the hotel workers' union, the Plaza's landlord, Elad Properties, backed down yesterday from a controversial plan that would have turned the Grand Ballroom into a fashion retailer and converted much of the property into condominiums.

Speaking in the ballroom, which is to remain an ornate palace for weddings, bar mitzvahs and social functions, Mayor Michael Bloomberg, whose administration urged the two sides to keep talking, said, "This is another good day for New York."

The 805-room Plaza is scheduled to close April 30. When it reopens in late 2006 or 2007, it will have 150 condos -- down from the initial 200 -- and at least 348 hotel rooms, more than double the 150 Elad had envisioned. The Palm Court, Oak Room and Oak Bar will remain intact. A small retail area will be in the basement, Elad president Miki Naftali said.

Uniformed employees, including doormen, chefs, waiters and housekeepers jammed the news conference. They cheered and chanted for union president Peter Ward, the chief negotiator, who got married at The Plaza in 1983, and for Bloomberg, making it seem at times like a political pep rally.

"A solution is in everyone's best interest," Naftali explained. "The Plaza lives. The legend continues."

Part of the legend involves Eloise, a fictional character who lives at The Plaza. But it continues in a shrunken form. The New York Hotel Trades Council figures it will keep at least 350 jobs at the renovated Plaza, and possibly as many as 450, because its members will fill positions in the condo wing. There are 900 employees now, but under the original blueprint, 150 would have survived, at best, the union estimated.

Local 6 members intending to return will be given one week of pay for every year they've worked and two weeks for every year if they retire.

Bloomberg said negotiations began in February when the commission reviewing sites for the 2012 Olympics stayed at The Plaza. He learned then that talks had reached an impasse, and he installed the sides in Gracie Mansion. With the closing looming, talks heated up in recent days at City Hall, and a deal was struck around 5 a.m. yesterday.

Other efforts occurred overseas. Prominent New Yorker Ronald Lauder, who worked behind the scenes to save The Plaza's historical character, traveled to Israel to meet with Elad owner Isaac Tshuva, who attended yesterday's announcement.

In addition, two Plaza employees and union representatives went to Israel in March to launch a media campaign.

"The world really cares about The Plaza," said doorman Neil Scott Johnson, who made the trip.

Elad paid $675 million for the property and intends to spend $350 million to modernize the 98-year-old national landmark. It will create a five-star hotel along 58th Street, but the main entrance will be the famous Fifth Avenue doors. Luxury condos will get the prime real estate along Central Park South and most of the Fifth Avenue side.

Bloomberg said The Plaza's future crystallized issues facing the tourism industry. Nearly a dozen hotels have turned some or all of their rooms into pricey condos.

Bloomberg plans to assemble a roundtable to make policy recommendations that will ensure future hotel investment and preservation. A bill before the City Council that would limit hotel condo conversions is on hold.

While most employees were overjoyed, some grumbled.

"They bought it as a hotel, they should abide by it as a hotel," said Jerry Dimitratos, a Plaza bell captain for 27 years.

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To see more of Newsday, or to subscribe to the newspaper, go to http://www.newsday.com

Copyright (c) 2005, Newsday, Melville, N.Y.

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