New Plan for NYC’s Famous Plaza Hotel

The planned renovation of Manhattan’s famed Plaza Hotel, which raised howls among New Yorkers enamored of its history, will be sharply scaled back under a compromise with new owners unveiled Thursday.

For nearly a century, the Plaza has received celebrities, diplomats and the very wealthy. It was a hangout for literary giants such as Ernest Hemingway and Dorothy Parker, and was the home of precocious children’s book character Eloise.

New owner Elad Properties had planned to convert it largely to shops and apartments, but in a deal brokered by New York Mayor Michael Bloomberg, the company would retain almost half the hotel rooms and its lavish public spaces.

The tentative deal between Elad and union workers will save at least 350 of 900 jobs at the hotel that overlooks Central Park, the mayor said.

Israel-based Elad bought the Plaza last year for $675 million and planned to close all but 150 of its 805 rooms.

Under terms of the deal, the Plaza will close for renovations for up to two years. When it reopens, it will have 348 hotel rooms and its Grand Ballroom, Palm Court, Oak Room and Oak Bar will remain open. It will have 150 condominiums and small retail sites on its lower floors.

Elad’s plans had raised a chorus of objections from New Yorkers. Children around the world know it as the home of Eloise, the heroine of children’s fiction who roller-skates through its halls and irks its stodgy guests.

“I’m elated,” said Joseph Lamont, a Plaza bellman for 17 years. “The children and families really love this hotel.”