Lighting Up the Plaza

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun
NY Sun
NEW YORK SUN CONTRIBUTOR

Ostensibly the celebration set at the Plaza tonight is to mark the 100th anniversary of the grand old hotel where Eloise and millions of others — New Yorkers and visitors alike — enjoyed so much over the years. But really it is about the transformative nature of capitalism, which discovered that locked inside the elegant old heap of limestone and granite was billion of dollars in value that previous owners had failed to realize. A bet that it was there was placed by a developer, Elad Properties, who is converting the structure into a combination of a hotel, condominiums, and retail space. So when the lights go up on the Plaza tonight at nine, it will signal a kind of triumph of capitalism’s spirit in the city that is its capital.

It was little more than 2 years ago that the Plaza was surrounded by a prayer vigil, led by the Reverend Jesse Jackson, and labor leaders fearful that the plans being nursed by Elad to close the Plaza hotel and turn to a new business model would result in job losses. In an editorial issued at the time, we noted that the “very idea of a prayer vigil seemed a bit bizarre, as if the union leaders were counting on the Almighty to smite the Plaza’s new owner, Elad Properties, before the company could convert the building to condominiums.” But, we asked, “what is the religious law that would prevent a private company from responding to consumer demand? The owner of the building believes that what people want is more residential and retail space. What is unholy about homes?”

At the time we noted the drama was a test of Mayor Bloomberg and, by extension, the whole city’s faith in capitalism, particularly given the long list of successful businessmen who had tried, and failed, to make a go of the traditional business model of the Plaza. Prince Alwaleed Bin Talal of Saudi Arabia and the London-based company Millennium & Copthorne, spent $40 million on renovations when they purchased the property from Donald Trump in 1995, we noted. Yet the Plaza had a pretax loss of $1.8 million in 2003, the last full year they owned it. “The hotel needs renovation, and I don’t want to spend any more money on it,” the chairman of Millennium & Copthorne, Kwek Leng Beng, was quoted as saying in the New York Times.

Elad Properties, in contrast, bet something on the order of $400million on its plan. It has been selling condominiums at as much as $6,500 a square foot to some of the glitziest names in sports, business, real estate, and entertainment. The commercial space alone is estimated to fetch as much as $500 million. And the prospect is for new employment, some of it going to those who worked at the old hotel and some of it new jobs. Peter Ward, the union leader who spearheaded the protest against Elad’s plans, will be joining the celebration tonight. Fortunately the Landmarks Commission didn’t interfere with all but a relatively limited part of the enterprise. New Yorkers can hope that the lights of the Plaza can help illuminate the promise that market freedom holds for the city in the next 100 years.

NY Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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