Plaza Hotel, local tycoon compromise
Hotel staff and Israeli businessman sign agreement on future of New York City landmark
Tshuva purchased the hotel a few months ago,with the intention of transforming it into a luxurious apartment complex, which would result in the dismissal of the hotel’s 900 employees.
According to the agreement, the renovation and reconstruction process will begin in May and is expected to continue until 2006.
While hotel employees wishing to resign will be paid double the legally required severance pay (200 percent), staff wanting to return following the year-and-a-half renovation will receive the legally required severance package (100 percent).
The hotel presently employs 900 people, with 100 of them nearing retirement age.
The agreement also stipulates that Tshuva must increase the number of hotel rooms slated for construction, at the expense of the number of apartments set to be built.
According to the new plan, 130 hotel rooms, 220 hotel apartments and 150 luxury apartments are expected to be built. In addition, the hotel's famous banquet halls will also be preserved.
Sponsored by Michael Bloomberg
Tshuva’s Elad Properties Group, who bought the hotel for USD 675 million from Saudi Prince al-Walid bin Talal and British hotel company Millennium & Copthorne, will invest an extra USD 350 million to reconstruct public lands slated for preservation.
In response to the agreement, Tshuva said concern for the staff was always an integral part of the Plaza renovation plan.
“I’m pleased the agreement provides an honorable severance package and ensures jobs for many Plaza staff workers in the future,” he said.
“Ever since we purchased the Plaza we have expressed our intention to rehabilitate and return it to its glory days as a major landmark on Manhattan’s Fifth Avenue.”
The agreement was signed Thursday by Tshuva’s Elad Properties Group and the Plaza Workers’ Union Chairman Peter Wood, and was sponsored by New York City Mayor Michael Bloomberg.
