Los Angeles Times

The Plaza soon to go condo


The air conditioning in the Plaza Hotel's presidential suite broke several years ago, and the owners decided not to spend the $100,000 it would take to fix it.

So the sprawling apartment, complete with a walk-in safe the size of a small bedroom, sits empty, like a ghost town in the sky.

The world-famous 98-year-old landmark hotel, with its gold-leaf trim and 1,700 crystal chandeliers, is fraying at the edges.

About 30 of the 805 chambers are out of commission, left uninhabitable by water damage. During heavy rains buckets are placed outside the Palm Court to prevent drips from ruining the carpet.

An elaborate $350 million renovation, which will patch leaks, preserve marble fireplaces, modernize the infrastructure and reconfigure and enlarge the rooms, is slated to start next month.

The last night guests will sleep with Eloise in their midst, until the Plaza reopens in late 2006, is April 29.

But the planned refurbishment, which the new owner says will restore the building to its former glory, is not what many New Yorkers or guests had in mind. The blueprint has created a backlash, led by the hotel workers union, which stands to lose 900 jobs.

Elad Properties, which bought the Plaza for $675 million last year, plans to transform much of the chateau-like abode, at the enviable intersection of Fifth Avenue and Central Park South, into 200 expensive condominiums with park views, pre-war touches and sumptuous kitchens.

The project also envisions a large commercial component. Elad president Miki Naftali said he is talking to high-end fashion retailers to fill 160,000 square feet over five floors, including the grand ballroom.

He said a retailer would push its wares away at night and the ballroom could be used for weddings, fashion shows and special events. What he doesn't want is conventions and corporate meetings.

"We are preserving the public spaces and keeping them open to the public more than today," he said. "If you're not invited to a wedding in the grand ballroon you're never able to see it."

For the sake of public sentiment, Elad will also put a five-star, 150-room boutique hotel under the mansard roof.

It will build an inner garden courtyard with juliet balconies and reopen some restaurants, including the Palm Court, Oak Room and Oak Bar -- where martinis cost $17.

It's a mixed-use project that's unusual in New York, although more hotels are converting some or all of their rooms to apartments to cash in on rising real estate prices.

Until a few years ago selling hotel rooms for good, not just by the night, was more prevalent in resorts, said John Fox, senior vice president of PKF Consulting. Now the trend is moving into urban centers.

In Manhattan, the St. Regis and the Millennium U.N. Plaza want to peddle residences that were hotel rooms. Two Ritz-Carltons were built in recent years with condo units.

The rooms in Trump International Hotel and Tower are privately owned condos, but floors 3 to 17 are rented to overnight guests. Condos and the Mandarin Oriental Hotel share the Time Warner Center. For many years the Waldorf-Astoria and Pierre have had permanent tenants.

A slew of other inns, including the Stanhope, Mayflower, Regent Wall Street, Sheraton Russell and InterContinental Central Park South have shut completely or will close to become apartment buildings.

All told, 10 hotels have converted in the last 18 months, according to the New York Hotel Trades Council. "It's alarming," said council president Peter Ward.

On Long Island, the proposed "Lighthouse" development at the Nassau Coliseum by Islanders owner Charles Wang calls for a 60-story tower that would jointly house a luxury hotel and condominiums.

For condo owners, the advantage of living in a hotel is having amenities, for a fee, such as room, maid, concierge and catering services, in-house restaurants and spas. For developers, it's a chance to recoup part of their investment immediately -- rather than little by little, night after night.

Stribling and Associates, which will market the condos after an offering plan is approved, has received "hundreds" of inquiries from former guests and interested buyers, including foreigners, said spokeswoman Rosita Sarnoff.

However, before the Plaza is reborn, Elad must hurdle several obstacles, not least of which is opposition, as witnessed by a loud union-led rally outside the Plaza's doors on Tuesday.

Director Peter Bogdanovich, who lived at the Plaza in 1980 when he used it as a backdrop for "They All Laughed," called it "the happiest time of my life." Believing the Plaza to be the "heart" of the city, he said this is the first cause he's embraced as a New Yorker.

The city landmarks preservation commission could designate interior spaces, which could limit changing their uses. If Elad wants to put stores in sections not zoned for retail it would need a special permit from the Planning Department. A spokeswoman said no application has been filed.

In addition, the City Council is weighing a bill that would limit a hotel's space that could be converted to apartments to 20 percent. And the owner of two lobby jewelry stores has sued, alleging the landlord is terminating its leases illegally.

Thomas Civitano, the Plaza's executive vice president of marketing, said when it opened in 1907, 90 percent of guests were permanent residents. A century later the Plaza is returning to its roots.

Civitano, who has roamed the wide corridors for 16 years, said he is sad to see his efforts end, but adds, "It's not the end. It's only the beginning of something better to come."

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