Old New York: The Plaza Hotel
By Damian Ghigliotty October 14, 2014 4:00 pmreprints
American architect Henry Janeway Hardenbergh designs and builds the French Renaissance château-style Plaza Hotel, which costs $12.5 million to develop. When the Plaza opens along Central Park South on Oct. 1, 1907, the cost of a room is $2.50 per night.
Hilton Hotels founder Conrad Hilton buys the luxurious Plaza, at 768 Fifth Avenue, from the developer for $7.4 million in 1943. Mr. Hilton spends $6 million refurbishing the 19-story property.
The national restaurant chain Childs Company, which partnered in the development of the neighboring Savoy-Plaza Hotel—later to become the site of the General Motors Building—purchases the Plaza in 1955 for 1.1 million shares of Childs common stock. The stock is valued at approximately $6.3 million. The Plaza is featured in the 1967 American comedy Barefoot in the Park staring Robert Redford and Jane Fonda, the first of several film appearances. The hotel receives landmark status from the New York City Landmarks Preservation Commission in 1969.
The hotel is designated a National Historic Landmark in 1986. Donald Trump buys the Plaza two years later, for about $400 million (equivalent to about $800 million today). Mr. Trump writes about his acquisition in a full-page open letter in The New York Times, stating, “I haven’t purchased a building, I have purchased a masterpiece—the Mona Lisa. For the first time in my life, I have knowingly made a deal that was not economic—for I can never justify the price I paid, no matter how successful the Plaza becomes.”
Following his divorce from Ivana Trump in 1992, Mr. Trump sells the Plaza for $325 million to the New Hampshire-based investor Troy Richard Campbell in 1995.
Mr. Cambell later sells the building for $675 million to the Israeli-owned real estate firm Elad Group in 2004. Elad temporarily closes the hotel for “extensive renovations” on April 30, 2005.
The Plaza reopens for business on March 1, 2008, under the management of Fairmont Hotels and Resorts, offering 282 guest rooms and 152 private condo hotel units. HSBC provides a $48.4 million refinance on the property in October 2008. The India-based financial services company Sahara India Pariwar, run by flamboyant billionaire Chairman Subrata Roy, agrees to acquire a 75 percent controlling stake in the Plaza from Elad for $570 million on July 31, 2012. Kingdom Holding Company, run by Saudi Arabia billionaire Prince Alwaleed bin Talal, also buys a stake in the property. The cost of a room per night at the five-star hotel is upwards of $975.
Mr. Roy is jailed in New Delhi following Sahara’s failure to repay billions of dollars raised in dirty bonds and announces he is seeking a buyer for his company’s stake in the hotel in addition to stakes in New York’s Dream Hotel and London’s Grosvenor House Hotel. A $2 billion price tag is placed on the majority stake in the Plaza. A senior company executive tells Reuters that Sahara may mortgage its overseas hotel properties, which include the Plaza, to raise the necessary $1.7 billion in bail money for its jailed chairman.