Built in the early 20th century on the corner of 5th Avenue and 59th Street in New York City, the Plaza Hotel was from the beginning a hotel for the wealthiest Americans. The iconic building, which replicates a French Renaissance mansion, has hosted many famous names, but also many owners: from classic real estate moguls to Slovenia’s most famous son-in-law, Arab princes and Indian tycoons. But as we shall see, having a fat wallet and owning a Plaza doesn’t always bring good luck. Far from it.
On the morning of October 1st, the hotel staff was nervously running around the hotel reception, polishing their uniforms and making final adjustments. Upstairs, the chambermaids were stretching the sheets, and outside, the manager was nervously shouting at the doormen who had not turned up as they should. A crowd had been gathering on 59th Street in New York since early morning, eagerly awaiting the opening of the luxury hotel where the rich and famous would begin to flock.
Finally, at 9 o’clock, a black carriage arrived, Alfred Gwynne Vanderbilt, one of the richest men in the United States, stepped out and walked down the red carpet to the revolving doors of the hotel. “I’d like to check in,” said the charming rich man to the blonde on the other side of the counter.
She picked up a thick notebook that looked like a book, opened the first page and wrote under number one: “Mr. and Mrs. Vanderbilt.” The entry had been prepared in advance and was decorated accordingly. As the richest American, Vanderbilt had the “right” to the first entry, which meant: if it was good for him, it was good for the rest of America.
Soon after, the first guests began to arrive, and the journalists dutifully “took stock” of them: Diamond Jim Brady, holding a diamond-encrusted cane in one hand, and actress Lilliam Russell in the other. Next came Benjamin N. Duke, the tobacco industrialist, followed by John “Bet a Million” Gates, who had taken up residence in the largest and most prestigious of the hotel’s 16-room suites, for which he paid $46 000 a year, which today would be $1.2 million.
The Plaza was the most expensive hotel in the city’s history. Its 18 floors dominated the city’s silhouette, so it is not surprising that it made a very strong impression on the city’s inhabitants. It also contributed to what is today one of the most recognisable symbols of the city: the yellow taxi cab. In fact, 25 bright red cars, the forerunners of today’s yellow taxis, were parked in front of the hotel’s entrance and could be used free of charge by hotel guests. If anyone thought this was a foolish idea at the time, they could bite their tongue a few years later.
But the Plaza brought about another social change. Wealthy New Yorkers, who had previously paid large sums to maids, gardeners, housekeepers and other helpers in their own houses, saw the hotel as a solution. Some of them moved into the hotel permanently, because it provided cleanliness, culinary and technical comforts (telephones, thermostats, automated clocks, etc.) and everything else.
They didn’t need to hire decorators, because each of the hotel’s 800 rooms had the most elaborate furnishings. Each one had three buttons to call a waiter, a chambermaid or a waiter, so help was always at hand when you needed it.
The opening of the Plaza also had an impact on social behaviour, as its restaurants became a meeting point for ‘important’ guests and townspeople. Anyone who was important or wanted to become so had to go to one of them. Journalists were waiting for them in the lobby, dutifully photographing them and running stories about them the next day.
The Plaza was the first hotel to even have a special room for dogs. Life Magazine wrote this on the side: “Like their owners, the Plaza dogs are very well dressed and well fed. They enjoy life in the hotel.” Nana, a French poodle, even had her own miniature bathtub and a special dog menu.
A small army of staff was involved, starting with the chefs in the labyrinthine underground kitchen. The 83 chefs were watched over by a French chef who never missed a detail. But the chefs were only part of a large family of 1 500 staff looking after the hotel.
The year of its opening, 1907, was also the year of the stock market panic, but it seemed to have no effect on the fabulously wealthy individuals who had settled in the Plaza. At Christmas time, millionaires rewarded the hotel staff with gold watches, large tips or other small gifts. It was as if a new era had begun with the Plaza.
The French Chateau
The Plaza Hotel was built with great discipline and perfection, and was completed in just 27 months, a record for the city. Before construction began, there was a small pond on the site where the townspeople skated in winter. In 1882, two builders bought a plot of land and started building a family hotel.
Their money supply ran out before they finished the project, so an insurance company took over and built the “first” eight-storey Plaza. It opened in 1890, during the era of railway construction, when railway and steel tycoons were springing up like mushrooms after the rain.
Elegant houses began to spring up around what is now known as 5th Avenue, and the richest people in New York or the USA. In the years that followed, the Waldorf Astoria Hotel and many others were built here. The once prestigious Plaza thus began to lose business rapidly and eventually ended up at auction. It was sold for three million dollars, today’s 88 million dollars, a record for a New York sale.
If people’s mouths were agape at the news, they probably dropped their jaws when they heard that the new owners were going to tear it down. They were 56-year-old Berhard Beinecke, a tycoon who made fabulous money in the wholesale meat business, and 39-year-old Harry S. Black, a charismatic salesman who had married into the family of George A. Fuller, a wealthy Chicago real estate developer.
Not having enough money to buy the place, they brought in John “Bet a Million” Gates, who was making fabulous money selling barbed wire to Texas ranchers. Rumour has it that he earned the nickname “Bet a Million” when he once bet a company a million dollars on which raindrop would be the first to slide down the windowpane.
So the trio tore down the old Plaza and asked the then famous architect Henry Janeway Hardenbergh to create an unforgettable masterpiece. He envisioned the hotel as a Renaissance French mansion with skyscraper proportions. He placed the main entrance on 59th Street rather than on 5th Avenue, where it is today. Upon entering through the revolving doors, guests are greeted by Rococo marble. A special feature was the four elevators with glass doors, which could not be seen anywhere else at the time.
In addition to the long reception desk and the elaborate ladies’ toilets, the brokers’ room was also special, equipped with a telephone, telegraph equipment, typewriters and a desk. On the ground floor, various catering facilities were built, from a café and tea room to a bar, each with its own style. Upstairs was a ballroom that could seat 600 people. Not far away was the presidential suite, rented by the highest representatives of the state.
One can imagine that in a hotel of superlatives, the furnishings and decor must have been of the very best. The bed linen was flown in from Belfast at a cost of, today, USD 2.7 million. Embroidered curtains were bought in Switzerland at a cost of $3900 each, and glassware (the famous Baccara) was brought in from France. They had to install 1650 chandeliers and 4000 logos (double P) in silver, which today would cost eight million dollars. In the end, the Plaza was unprecedented. As Life Magazine said: it’s rich, but it’s not flashy. The cost of construction was outrageous for the time: $12.5 million, or $340 million today. It was a hotel of superlatives that left passers-by in no way indifferent.
Stacked lives
It was a Friday in March, around 6 pm, when the Hungarian Baron Richard von Arkovy visited the hotel reception. He was tapped on the shoulder by a man who introduced himself as a detective and asked to come in with him. The Baron played dumb and stepped aside – among the other guests, but the detective remained steadfast and pulled him after him.
The Hungarian saw that he was not joking, so he agreed and went with him to the police station, where he was searched thoroughly and found two platinum Cuban diplomat’s bowls, about 3000 dollars in cash and some diamond tie clips. The evidence confirming the suspicions of the police was enough to take him immediately to prison.
At the time of the Hungarian baron’s arrest, the Plaza had been open for several years. It was a meeting point for glamour, money, the richest Americans, politicians, businessmen. It was also a magnet for those who wanted money or fame. One such person was the aforementioned Hungarian baron, about whom very little is actually known. He fled from Hungary to London because of a gambling problem and, although he was “only” the son of a dentist, he began to present himself as a baron. Gambling got him into trouble again, so he fled to the USA.
He first worked in a tobacco shop and was so low on his savings that his life became such a misery that he tried to gas himself. Before he did so, he wrote a farewell letter, saying that he was taking his own life because of the stock market turmoil. Before he finally closed his eyes, a neighbour found him and rescued him.
The story of his suicide out of desperation reached the ears of the press, and the story that the rich Hungarian baron had failed in the stock market and was therefore running for his life was told far and wide. The story was so compelling that some of the world’s media picked it up, even the Hungarian press. When the father of the untried suicide read it, he took pity on him and sent enough money to the US to get his son back on his feet.
Fate had a few more surprises in store for him. One day, it happened that he met 17-year-old Elsa Schroeder, whose grandfather was the wealthy brewery owner Jacob Hoffman. He had been blowing on her soul for so long that he got his mother’s blessing to marry her, but not his father’s. Nevertheless, they gave their fateful yes and committed themselves to the newlywed life.
But my father would not give in. He hired a detective who discovered that the Baron was a fraud. The bereaved mother reproached herself so much for the mistake she had made that she committed suicide by gassing herself. In her will, she left $250,000 (today $6.5 million) to her daughter, with the proviso that she would not be entitled to it until she was 21.
The day before her birthday, the Baron invited the young lady to the Plaza, where the couple, in the company of friends, were already enjoying their rich inheritance. The next day, they collected the first part of the inheritance, and then the now adult wife set off for Europe. Why, no one knows. The Baron was left alone with the money and began to spend it cheerfully.
Life would have been wonderful if he had not been tapped on the shoulder by a detective a few days later in Plaza. Why he was carrying the stolen platinum bowls is unknown. The only explanation that can be offered is that he was a kleptomaniac.
After posting bail, he was allowed to leave prison. He immediately went to the Cuban diplomat who owned the bowls and persuaded (read: bribed) him to drop the case against him. His arrest was too much for the hotel, so he was dismissed.
Unwanted, he went back to Europe and tipped like a rich man who never runs out of money. He stayed in London hotels and gambled constantly. His dissolute life led him to morphine, and he immediately fell in love with it, but this love ended unhappily as he overdosed and died.
His wife fled back to the USA to her father’s arms and begged his forgiveness. But her father was at his wit’s end and committed suicide shortly after her arrival.
This was just one of the stories of the “rich and famous” or those who want to become so. It shows that their lives were often stacked up, despite their glittering facades and boundless flamboyance. The lives of the hotel staff were quite different. Some of them earned a meagre 83 cents a day. They could only dream of paid holidays, and the working day could be as long as 18 hours.
But the hotel workers’ ill will did not start in the Plaza, but in one of the neighbouring hotels (the Belmont), where hotel workers were not only poorly paid, but also punished. One dollar was deducted from their wages if they laughed, two dollars if they drank leftover coffee and five dollars if they ate leftover cake. So three hundred hotel workers took to the streets in May 1912, and were soon joined by hundreds more from New York hotels. And from the Plaza, too, as soon as the soup was distributed.
The Plaza’s manager, who had a hunch of what was cooking, had dozens of migrants from Europe and blacks from the south of the US “hidden” in hotel rooms, ready to jump in and cover the worker shortfall. After a few minutes, the service had already started, so that the hotel guests did not even notice that something was happening. “We can pull hundreds of black waiters out of our hotels in the south of the US in a matter of minutes, and they are not only skilled at their jobs, but grateful for the opportunity,” the Plaza manager bragged to reporters. But the strike was spreading. Some 2 500 waiters, 1 000 cooks and 3 000 other staff members demanded better working conditions: at least one day off a week, a limit of ten hours and an increase in pay to $10 a week.
The hotel managers refused to accede to their demands. In the end, they compromised by raising their wages from 25 to 30 dollars and giving them half a day off a week. In the Plaza, they did not take back anyone who went on strike. A dry year
On an October morning in 1914, a reporter for the New York Tribune was walking along 3rd Avenue and came across a strange dog with a coat of bluish-coloured hair. The owner led the dog to the Plaza, where a lady in a coat of the same colour was waiting for him. “This is a blue terrier. It is not a myth or a hoax, but the reality of the times in which we live,” the reporter wrote in the newspaper a day later.
For the journalist, the dog in question, something completely new in breed breeding, was a symbol of the exaggeration of the times. Like, for example, Mrs Emily Ladenburg, who received her late husband’s inheritance, now worth 16 million dollars, and who the next day threw a party in the Plaza worth a million dollars. People danced, champagne flowed in streams … She was not the only one to spend money so recklessly, despite knowing that a deadly storm was brewing in Europe.
In May 1915, the Germans torpedoed the American ship Lusitania, sinking 1962 people, including Alfred Gweynne Vanderbilt, the Plaza’s first guest. He and his wife divorced after only a few weeks, when they moved into the Plaza. The charming rich man then fell in love with Agnes O’Brien Ruiz, the ex-wife of the Cuban attaché and actress, whom he met while riding in Central Park when her saddle strap got stuck. In the following weeks, she was seen several times by journalists in the park and in the local Turkish bath. Not long afterwards, she was driving around the city in an outrageously expensive car, now worth $300,000.
Ruiz divorced her husband a few weeks later, hoping to become the new Mrs. Vanderbilt, but the romance was already cooling. Vanderbilt visited her less and less often, and she shot herself in the chest in frustration. For weeks the newspapers dared not report the tragedy, fearing a backlash from Vanderbilt’s bloodthirsty lawyers, but eventually the news leaked out.
To distance himself somewhat from the critical public, he took the ill-fated Lusitania to Europe. If rumours are to be believed, he was supposed to have given a lifejacket to a young lady at the moment the ship was sinking, even though he himself could not swim. Despite a $5 000 reward being offered for his body, it was never found.
This unfortunate sinking also plunged the USA into war. At the time, the German ambassador Bernstorff was staying at the Plaza, but was kindly dismissed by the hotel management after the country entered the war (1917). Not long afterwards, it came to light that the ambassador was in league with a Frenchman, Paul Bol Pasha. The latter was on the German payroll in order to persuade the French government to accept an armistice. As a lobbyist, the Germans gave him $150 million of today’s money, but the man was not very successful. In the end, he was just overlooked in France and imprisoned.
During the war, he also had to adapt somewhat to the war situation. White flour was replaced by potato or rice flour, portions were reduced and meat was cut from the menu at least one day a week. They tried to use as little frying as possible in order to follow the country’s guidelines on saving butter and oil. The rationalisation of sugar use has led to the elimination of many desserts from the menu, or to a significant reduction in the number of desserts.
When the First World War ended in November 1918, the Plaza’s manager brought a brass band to the hotel to announce the happy news of the year as they strolled through the hotel corridors. “People drank as much champagne as never before,” wrote a reporter in Life Magazine.
Those who tasted champagne that day were among the last to do so. In the US, even during the war, alcoholic beverages could have a maximum alcohol content of 2.75 %. After the war, everyone expected that the restrictions imposed by the war’s rationalisation of raw materials would no longer apply, but they did not. It was only worse. Congress approved a ban on the production, transport and sale of alcohol.
The prohibition, known as Prohibition, forced many restaurants to close their doors and secret breweries and distilleries to spring up like mushrooms after the rain. Smaller clubs were pouring alcohol in secret, while larger ones like the Plaza could not afford to do so. Traffic thus began a slow but steady decline. Higher hotel room rates and new coloured soft drinks did not help.
A shot in the dark
When the Plaza opened in 1907, its neighbourhood was affluent, but still not very special. But as the 20th century began to turn towards the second half of the third decade, the area began to become one of the most popular and also one of the most monotonous in the city. Harry Black, one of the hotel’s co-owners, was therefore tirelessly buying up the land next to the hotel, if it came up for auction of course.
This allowed the hotel to expand: 350 more rooms were added, the ballroom was enlarged to accommodate a thousand people and the main entrance was moved to 5th Avenue. As the Prohibition trend was towards private parties, some of the rooms were made more intimate and given their own entrances. As the Plaza grew, so did optimism in the green balance. In 1921, for the first time since 1914, the Plaza paid dividends, which grew from a modest one and a half percent to 10 percent in the following years. Thus, within a few years, the Plaza became the most valuable hotel in New York. Black became so rich that he rivalled the richest Americans.
John “Bet a Million” Gates probably would have been too, had he not died in 1921. His coffin was placed in the ballroom, where about a thousand mourners said goodbye. His shares were bought by Black, who became the majority owner of the hotel.
The 1920s became very profitable for hotels. It was as if people wanted to make up for the First World War. Hotels were springing up like mushrooms, people were dancing the Charleston, and many individuals were getting outrageously rich. This is borne out by the national statistics, which at that time ranked the hotel industry as the 7th largest industry, after the steel industry.
But all good things come to an end. In 1929, the stock market began to shake. After 18 October, shares only began to slide further downwards. In February, Plaza shares were selling for 119,5 dollars, in October they were worth only 88 dollars. Black, in his sixties, realised that the good times were over for good. That evening he returned to his penthouse apartment in the Plaza, his wife having gone out to dinner with friends. He went to the bathroom, and was out of it for a very long time.
The assistant knocked gently and, getting no answer, he slowly opened the door. Black was lying in the full bath, his head in the water. He immediately called the police and the paramedics, they spent a very long time reviving him and finally managed to revive him. The police wrote an official report that he had probably suffered a cardiac arrest due to the water being too warm, but only Black knew what was really happening.
They did manage to revive him, but he never recovered mentally. Half a year later, in the summer of 1930, as shares plunged further into the abyss, he was 67 years old, sitting on his hotel bed, shot in the temples. Before that, he had made a will dividing his immovable property between his wife Isabelle and his nephew Georges, and setting aside the money in a special foundation.
To illustrate the value of the estate: before the stock market crash, his estate was valued at USD 15 million, that is, USD 215 million today, and when he died it was worth only a third of that money.
His nephew George, seen by many as a saviour, died of cardiac arrest just 14 months after Black’s suicide.
Beautiful wives love hotels
Some hotel guests have lived in the hotel for years or for the rest of their lives. Among them were 39 widows who, after the death of their husbands, had apparently amassed such great wealth that they were able to enjoy luxury for the rest of their lives. They were good customers for the hotel, despite their proverbial moaning, as they occupied the rooms all year round and were regular payers.
One of the first and perhaps the most extreme was Vilma Lwoff Parlaghy from Hungary. In 1909, she moved into an apartment with a dozen rooms in the Plaza. She brought with her three French assistants, three male assistants, a dog, a pair of guinea pigs, a pair of young wolves, an ibis bird, a falcon, several owls and a family of alligators. She had previously stayed at the Waldorf Astoria Hotel but was evicted because of her mini zoo.
The Plaza was more tolerant of her animals and 43 suitcases of luggage. It was only when she brought a lion cub from the zoo and it outgrew the hotel’s banana that they started to warn her about her lifestyle. No one knew where her wealth came from (she once complained to a Los Angeles Times reporter, her eyes almost teary, that she couldn’t possibly spend a million dollars a year). But when war broke out in 1914, her fortune suddenly began to dwindle. She fell into debt and eventually fled the hotel.
After the stock market crash, 26,000 businesses closed and more than four million Americans were out of work. In 1933, Franklin Delano Roosevelt succeeded Herbert Hoover as US President and began to create more favourable conditions for the country’s recovery. But the recovery was slow.
Hotels were facing occupancy rates of only 50%. The normal occupancy rate before the crisis was just over 70%. The Plaza thus ended 1933 with a loss of $708,000.
The first signal that things were about to get better was the repeal of 13 years of Prohibition. The Plaza promptly revived the “forgotten” Persian Room, which had an eight-foot-long counter, with $1 million of today’s money. It was worth it. The loss slowly began to fade, and it looked like the Plaza would be one of the 19% of hotels that made it through the crisis. After Black’s death, the Plaza was run by his company, U.S. Realty, which was somehow no match for such a large hotel, and wanted to get rid of it as quickly as possible. It was bought by Conrad N. Hilton for 7.4 million dollars, which was considerably less (40 percent) than the value of the hotel when it was built (12.5 million dollars). But no sooner had he taken the reins of the new hotel than the new madness of the century began: the Second World War.
The Plaza had to rationalise its rations and small consumables in line with the country’s guidelines. The lack of adequate technical staff was also a major blow, as most of the men had gone off to war, so there was a long wait for the washing machine and the lift to be serviced.
But Hilton seems to have been a good crisis manager, having been involved in risky business virtually all his life. Even his purchase of the Plaza was viewed with disapproval by some, who wondered why he was buying hotels in such uncertain times. One of the few exceptions that agreed with him was the Atlas Corporation, an investment company that had money but knew little about hotels and was happy to listen to the experienced Hilton when they agreed to buy the Plaza together. In the end, they agreed that Hilton would take 60 per cent ownership and the investment company would take 40 per cent.
Six million dollars were invested in the renovation: to redecorate and paint the rooms, to install new technical installations and to make a few minor adaptations. Fortunately, it was noted that, as the end of the war approached, the number of guests staying at the hotel was increasing, and the balance sheet was therefore floating out of the red.
Hilton thus slowly stabilised its business, but a little less so its private life. He was in a second marriage, this time to the actress Zsa Zsa Gabor, whom he had met in 1941. Gabor, who had run for Miss Hungary in 1933 and then jumped into the marriage yoke nine more times, was known for her extravagant life.
One day, as Hilton lay bedridden with a high fever, he observed her daily routine. After a long sleep, she would have breakfast and then make up and choose a suitable wardrobe until lunch. After lunch, she repeated the ritual for afternoon tea and then dinner. “Glamour is expensive and Zsa Zsa is obsessed with it,” Hilton wrote in his book.
They married after only four months of acquaintance, so it is not surprising that after four years they were already divorced. Gabor’s divorce settlement was for $10 million and she announced that she would give it to “European refugees”, although most people assumed she meant herself. In the end, she extracted $35,000 from Hilton, a $2,000 monthly annuity and six months free accommodation in the Plaza.
At the same time as their divorce, the Second World War ended. New York became a world metropolis with the United Nations, which was reflected in the occupancy of its hotels. In the first months after the war, the Plaza hosted the Soviet embassy and therefore flew the Soviet flag. “Probably no New Yorker ever dreamed that the Plaza would ever fly the Soviet flag,” wrote a reporter for the Atlanta Constitution. The party of the century and the coffee stain
A family gathered around a table in the Plaza loft. At first the atmosphere was pleasant, but then Lourdes Salomone became hysterical. “Daddy, you can’t do that!” the 12-year-old joked. “I’ll never speak to you again!”
Why the tears? Lourdes’s father, Alphonse Salomone, was the hotel manager and a short time earlier the reception had received a request to book rooms for four famous musicians from the UK. But when Salomone put the Plaza’s reputation and earnings in the balance, it tipped in favour of the former, so he decided not to give the rooms to the announced musicians. That evening, he entrusted this to a 12-year-old girl who couldn’t believe her ears and burst into tears.
The Beatles‘ managers had booked the rooms for the ‘four businessmen’, as the organiser called them, in the names of Starr, Harrison, Lennon and McCartney, months before. The receptionist had no qualms about booking five suites and four extra rooms on the 12th floor, but it was only a few weeks later that they found out who these “businessmen” were.
That was the first Salomone had heard of the Beatles. After his daughter’s hysterical outburst, he relaxed a little. He did some research and discovered that the foursome was as popular as Elvis, so he relented.
The Beatles’ plane was met at the airport by nearly 4000 screaming teenagers. “We’ve never seen anything like it, ever. Not even when a king or a queen came,” the New York airport chief told reporters. The musicians were taken from the airport to the Plaza, where a crowd of girls was waiting for them again. At the hotel, they locked themselves in their hotel rooms and stayed there practically until the show. Their wildest act – the one they were most afraid of in the Plaza – was jumping on the beds and getting coffee stains on the sofa.
If it was calm upstairs, the hotel lobby was chaotic. The girls wanted to get to their musical idols by any means necessary. Some even hid in boxes, claiming that the packages were for musicians. Of course, they were not met at the reception, and on a few occasions even the police had to intervene.
Lourdes Salomone was overjoyed afterwards. “After that event, everyone at school wanted to be my friend”, she later recalled. She kept the mattress Paul McCartney slept on for herself. Whether she slept any better as a result is unknown, but we can imagine who she dreamt about.
By the time the Beatles were staying at the Plaza, it was no longer Hilton’s. He paid 7.4 million for it when he bought it and sold it in 1953 for 15 million dollars. The buyer was A. M. Sonnabend, an investor in various companies and otherwise a very conservative businessman. He therefore refused to go along with the increasingly loud whispers to demolish the Plaza, as many of the buildings around it had already been demolished, and build a new one.
But he decided to overhaul the interior, and the cost went from a projected two million dollars to nine million dollars. Every room now had air conditioning and a television set.
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Slovenia’s most famous son-in-law
It was a Friday in September 1973. A few minutes after 12 noon, the Plaza manager was nervously pacing the lobby of the Waldorf Astoria. It seemed as if James Lavenson was gathering information on the worst competition, but that was not the reason for his visit.
Late in the summer, Lavenson received a letter on his desk in his office saying that he had to pay 50 000 dollars or a bomb would go off in the Plaza. The note was signed “Black September”, the name of a Palestinian terrorist organisation. The FBI took over the case and ordered him to contact the terrorists. Their instructions led him to the lobby of the Waldorf Astoria Hotel and from there to an outside telephone booth, where the call directed him to the fourth floor of the Plaza.
“There’s an ashtray by the elevator. Lift the lid and leave the money in it,” said a man’s voice on the other end of the line. A nervous Lavenson did exactly that and quickly left the scene. Not long afterwards, FBI agents spotted a man walk up to the ashtray and grab the money. He was only happy for a short time, because a few seconds later he was accosted by the agents. The man turned out to be a 23-year-old Greek man, Pangiotis Vlachos, with no links to the Palestinians. This event was deeply etched in the memory of everyone in the Plaza and was a kind of harbinger of the decade to come. The 1970s were considered one of the most crisis-ridden decades since the Great Depression of 1929. Unemployment was high, inflation was rampant, drug use was on the rise, marriages were breaking up like clockwork, and corruption was pervading the police force.
New York City had serious liquidity problems, and the garbage was not being collected by the municipal services. Crime was rampant. Thus, the failed assassination of Chiang Kai-shek’s son (Chiang Kai-shek was President of Taiwan) was carried out in the Plaza. The pistol shots miraculously missed him. But that was not all. One night at 4 a.m., a tall, strong man with a moustache walked into the lobby and made his way to the serving counter. He surreptitiously showed him a gun and hissed, “This is a robbery!”
Four other men followed him into the room. They found the manager, tied him up and then took 265 000 dollars and some gold from the hotel vault. There were other similar incidents: a knife attack on a guest, the armed robbery of two couples as they were leaving a ballroom, and a German politician being harassed by prostitutes outside the hotel.
Such chaos affected the hotel’s visitor numbers, and naturally they began to decline. In 1966, the Plaza was still making a profit of 2.6 million dollars, but by 1971 it was already in the red, or 1.4 million dollars in debt. The owner of the hotel was Roger Sonnabend, son of the former Sonnabend, who had bought the hotel.
But he was young and impetuous: overgrown, very thin, in the throes of a mid-life crisis. He was very politically motivated and regularly attended various rallies. He rejected the classical and the traditional, so it is not surprising that the hotel started to get neon lights, incredibly vivid colour combinations, and the traditional had to go.
But if he was targeting young people with the renovation, they were not the target customer of the hotel. So it sank further into the red, and in the end Roger was happy to sell the Plaza to the Westin hotel chain in Seattle. They paid 25 million dollars for it, which is 114 million today. The hotel chain immediately invested 32 million in the renovation to restore the Plaza to its former glory. It was worth it, because by the end of the 1970s, the Plaza was already making a profit of 3.2 million dollars. It was at this time that Donald Trump began to visit the Plaza and fell in love with it at first sight. In 1976, he offered the owner USD 50 million, but the bosses at the Westin were adamant: ‘No. And who is Donald Trump anyway?’
Ten years later, they knew who Trump was, but the tables were turned: the Westin was in crisis and Trump was the most famous real estate developer in New York. “I was in love with her”, Trump, the 45th President of the United States, once later recounted. “I was ready to tear myself apart for her.”
It was true. Trump gave $400 million for the Plaza, or a record $495,000 per room. Such a high price was in keeping with the 1980s, when greed for money was seen as a good thing. The amount was astronomical, and it was strange in its own way that Trump should have got so much credit in the first place, because even a few years before that he had to have guarantors to get credit. Most often it was his father, Fred, who had created a successful family business building houses for the middle classes.
While Fred never showed his wealth outwardly, Trump swore by ostentation from the start: he drove a silver Cadillac, equipped with a phone and a DJT registration plate. He spent his days on his father’s projects and his nights in Manhattan with long-legged mannequins.
It was in one of these clubs that he met Ivana Zelnickova, a Czech who was a promoter of the Montreal Olympics. She had a degree as a gym teacher, but was a professional skier. Two months after they met, Trump invited her to his home in New York.
Meanwhile, he was warming up to buy the Plaza. When he signed the purchase agreement in 1988, he was given a loan of just over USD 400 million from Citibank. Ivana was very enthusiastic about her work and when Trump bought the Plaza, he appointed her as its manager. “My wife is a great manager. I’ll give her just one dollar a year for her work and all the clothes she wants,” he told reporters at a press conference in his characteristic style.
You can imagine the reaction to this statement in feminist circles. It was obvious that Ivana had a flair for decorating, as she created a pleasant atmosphere with her decorations. Many celebrities have returned to the hotel, from Kim Basinger to the Prince of Wales and Mike Tyson. The film Home Alone was filmed there and even Donald Trump made a brief appearance. Michael Jackson has also visited the hotel on several occasions, demanding privacy and lots of sweets, as has Mickey Rourke, who has usually wreaked havoc and caused tens of thousands of dollars worth of damage.
Donald Trump and Ivana were together for 14 years, then came the new blonde: Marla Maples, actress and model. At first, he “hid” her in the next block, telling everyone she was his niece. But when he started coming to her at 10pm and leaving at 8pm, it soon became clear that Marla was just another of his mistresses. When Ivana found out, it was ugly.
But Trump had problems not only with women, but also in the company. He was overpaying for projects and not enough money was coming in to pay off his debts. So in 1991, his Atlantic City casino went bankrupt, and he was stripped of his 85-metre yacht, his private jet, his airline, his stake in the luxury hotel chain Grand Hyatt New York and the Plaza. The latter he held for almost exactly four years. A prince and a billionaire
Even before Trump lost the Plaza, he was already looking for a new owner himself, because that way he could retain some influence in the hotel. He was looking around for rich Chinese people, but it so happened that when they came to visit, the hotel door locked itself so unhappily that hotel security had to break into the suite. Given the bad experience, you can probably imagine that the Chinese backed out of their planned purchase.
Citibank, as the biggest creditor, found two buyers with deep pockets. The first was Kwek Leng Beng, a billionaire from Singapore who had previously bought hotels in Manhattan. The second was Prince Alwaleed bin Talal of Saudi Arabia, also a billionaire. After months of negotiations with Citibank, they finally agreed to pay 325 million dollars for the Plaza, which was 83 million dollars less than Trump had paid for it seven years ago. The billionaires each took a 42% stake in the hotel, with Citibank taking the remaining 16%.
The two majority owners were full of contrasts. Kwek Leng Beng was modest, while the Arab prince lived large. He had hundreds of attractive cars and a Boeing 747 with a golden throne. Kwek Leng Beng gave him a gold-plated machine gun when he signed the Plaza deal.
It took five years for the Plaza to become profitable, and then came the infamous 11 September 2001, which brought tourism in New York to a halt. Profits began to fall and the building began to show the ravages of time. Until then, it had always been partially renovated, but never radically. The roof had leaked so badly that 30 of the 800 rooms were unusable.
The owners had invested 65 million in repairs, but the building was still in trouble. According to the estimate, 200 million should have been invested, but Singapore’s Kwek was not having it.
In 2004, an Israeli company, El Ad Properties, knocked on the owners’ door and offered 625 million for the hotel, but all three owners refused. The Israelis added another $50 million to the offer, which amounted to $838,500 per hotel room. This was a record price and once more than the buyers had offered for the hotel.
They shook hands and closed the deal. But why would the Israelis pay so much for this hotel? The plan was to rent out the lower floor to various shops and services, and to convert the rest of the Plaza into luxury apartments. The renovation would have taken two and a half years and cost $450 million, but in the end they would have made almost $1 billion from the sale.
But this was a no-buck bill. The plans were opposed by the hotel syndicate, which was well-connected politically. What’s more, it invested 2.5 million dollars in the Save the Plaza campaign, which included print ads, celebrities, TV and radio commercials. They were joined by supporters of preserving the Plaza’s architecture and by random individuals who watched in disapproval as real estate developers raised prices to dizzying heights and got fabulously rich in the process.
After a year of mudslinging in the media, the two sides finally came to the same table in 2005. The deal was that the hotel would keep 282 rooms and some historic spaces, such as the ballroom, and the investor could convert the rest into apartments. Of the nine hundred employees, around 300 kept their jobs.
The need to preserve the cultural heritage of the hotel was particularly emphasised. In the area where the hotel was being converted into flats, an auction of items was organised, auctioning everything from hotel keys to sofas, pianos and so on. People queued for hours to get in line so that they could walk around the Plaza and buy the piece of furniture they wanted.
The hotel has been under renovation for a good two years, and in the meantime, agents have already started selling new apartments at a price of ten million and more. If a 5th Avenue apartment was available for three million dollars, a similar one in the Plaza cost five million dollars. But that was the base price, plus $40,000 for the basement, $10,000 for the use of the gym, and $500 a day for maids, utilities, electricity, etc.
Of course, only the fabulously rich could afford such an apartment, although for most of them it would be unclear where the money would come from. Some were so rich that they decided to buy a flat in a matter of minutes. Someone ordered an apartment from his car while he was driving. Another promised his wife an apartment in Plaza, so he bought it as quickly (20 million) as if he had jumped into a shop to buy sugar. Apparently, they were so flush with money that it was really unnecessary to give the purchase any serious thought.
But there were also the kind of dudes that could be the basis for a crime film. At one meeting with an estate agent, a man came with an armed escort, at another meeting a potential buyer asked if he could pay in gold, and at a third if he could pay in cash. One client wanted to buy several flats, but before the deal was completed she had already been arrested for organising prostitution.
Among the celebrities who occupied the apartments were Simon Fuller, creator of the TV show American Idol, Doug Morris, boss of Sony Music Entertainment, and Tommy Hilfiger. The largest area – seven units – was bought by real estate developer and investor Harry Macklowe for 51 million dollars.
Many of the buyers were foreigners, particularly Russians, Mexicans, Spaniards, Italians and Turks. There were also buyers from Kazakhstan, such as the dictator’s brother, Bolat Nazarbayev, and even more straw companies where it was not even known who owned them. Interestingly, despite the staggering sums involved, almost two thirds of the buyers stayed in these units only occasionally or never at all. In 2011, the Plaza Hotel complex was bought by Subrata Roy, an Indian who had over one million employees in his home country. He paid 570 million for a hotel that he wanted to establish globally and not only in India, which was very much to the Israelis’ liking, as the recession was looming and they did not want to be tied to this hotel property.
But Roy was soon afterwards taken under the microscope by the Indian Revenue Service and several irregularities were discovered, which landed him in jail. The Plaza started to sink into the red, but once again foreign capital appeared: this time from Qatar. The hotel chain Qatar Hospitality spent 600 million dollars on the hotel. Who knows whether it will be the last owner, but the fact is that the company has a fat wallet, which should make the hotel’s future bright. But haven’t others had it, too, which have not ended up nearly so bright?
