Plaza Hotel Saved…For Now

Volume CV, No. 6June, 2005

The new owner of the Plaza Hotel and union workers reached a tentative deal on April 14 to preserve the landmark hotel’s Grand Ballroom, Palm Court, Oak Bar and hundreds of guest rooms, reported the New York Times.

Since January, the union representing 900 workers at the hotel had been locked in a struggle with the owner, Elad Properties, which had sought to convert most of 18-story building, at Fifth Avenue and 59th Street, into condominiums. The plan would have put many employees — including musicians — out of work and closed off the hotel’s most famous spaces to the public.

The fate of the 98-year-old hotel, which has figured in countless weddings and bar mitzvahs, the Eloise children’s books and movies like ‘‘North by Northwest’’ and ‘‘The Way We Were,’’ captured international attention.

Under the terms of the agreement, Elad agreed to retain 348 of the Plaza’s 805 rooms, up from 150 in the company’s original plan. Those rooms are on the 58th Street side of the building. The remaining rooms, all with views of Central Park, would be converted into about 150 apartments, Miki Naftali, Elad’s chief executive, said yesterday.

The Israeli company, which bought the hotel last fall for $675 million, also pledged that the hotel’s ornate Palm Court, the dark wood-paneled Oak Bar and the Grand Ballroom ‘‘would remain open for use’’ by the public and visitors to New York, Mayor Bloomberg said.

The hotel has now closed for renovations and is supposed to reopen in late 2006 or early 2007.

The mayor and the union said they expected that the agreement would allow about 350 workers — more than double the original estimate — to keep their jobs at the hotel.

Workers who do not return to the Plaza will receive ‘‘double severance,’’ or two weeks of pay for every year of employment. Those who do return will get standard severance pay for the construction period.

Peter Ward, president of the New York Hotel Trades Council, said the compromise represented ‘‘fairness and equity.’’

Like many of the workers in the ballroom, Marguerite Callender, a housekeeping supervisor who has worked at the hotel for 27 years, said she was ‘‘proud of what we have accomplished.’’

However, it is unclear for the moment how the deal will affect the five Local 802 musicians who performed regularly at the Plaza’s Palm Court. For the moment, these musicians are laid off. Will they return?

“We will let members know as soon as we know anything,” said Jim Hannen, 802’s supervisor of club date and hotel engagements. Marvin Austin of Steven Scott Enterprises, the Plaza’s agent for its steady musicians, could not confirm whether there are plans to reinstate live music in the Palm Court once renovations are complete.

“While our hotel agreement does not address this kind of contingency, the Plaza will continue to be a signatory, so if and when music is reinstated it will be union,” added Hannen.