One of the investors close to securing a majority stake in New York’s iconic Plaza hotel for $600 million plans to bring the luxury property brand to the UAE in the near future.
"My dream has been to build a brand of Plazas globally like the Ritz Carlton but with uber luxury and brands unique to the Plaza like the Palm Court and The Oak Room," Shahal Khan founder of Dubai's White City Ventures, told The National by email. "We are ready to close and I look forward to opening a plaza in Abu Dhabi soon thereafter. By 2020 I'll open one in UAE. Also one in China."
Mr Khan and other investors have secured a deal with the Indian conglomerate Sahara India Pariwar, controlled by Subrata Roy, and will close the deal by June 25, according to The Real Deal who was first to report on the agreement last week. The Sahara Group has a controlling stake in the landmark hotel which it bought in 2012. Minority owners in the property include Ashkenazy Acquisition Corporation and Saudi Prince Alwaleed bin Talal's Kingdom Holding with each holding a 12.5 per cent stake in the hotel.
Sahara, which previously owned the Grosvenor House in London, has been trying to sell its stake in the Plaza, because its chairman, Mr Roy, is under pressure from the Indian government, which has ordered him to return billions of dollars to investors, according to Bloomberg.
Mr Khan told The National he is financing $415m of the purchase amount of the 111-year-old Plaza and the remaining portion with equity.
[ Alwaleed's Kingdom and partners to sell New York Plaza for $600m ]
[ Subrata Roy: The rise and fall of an Indian billionaire ]
“I can confirm we have reached an agreement…We are also removing the loan of HBJ (Sheikh Hamad bin Jassim bin Jaber Al Thani) and waiting for approvals on that,” Mr Khan said.
Last year, the former billionaire Qatari Prime Minister became a senior creditor on the property after acquiring a mortgage on it, according to a Bloomberg report.
Whether Ashkenazy Acquisition and Kingdom accept or challenge the agreement remains to be seen.
The hotel, which is considered a trophy asset by investors, was once owned by US President Donald Trump who bought the property in 1988 for $390m. Mr Trump was forced to offload the Plaza, which was facing bankruptcy in 1992. The hotel has been managed by Fairmont Hotels & Resorts, a unit of France’s Accor since 1999.
Mr Khan said he intends on visiting the UAE this summer as part of his plans to eventually bring the brand to the country.
Illustrious history of a New York landmark
The Plaza Hotel in New York, now managed by Fairmont, was the dream of financier Bernhard Beinecke, hotelier Fred Sterry and Harry Black, president of the Fuller Construction Company. The trio bought a 15-year-old property of the same name on the site and set about building a 19-storey edifice that became one of the most famous hotels in the world. Construction took two years and no expense was spared. The largest single order in history for gold-encrusted china was placed with L Straus & Sons and no fewer than 1,650 crystal chandeliers were bought. Since it opened its doors it has changed hands a couple of times, played host to some very famous names and been the setting for classic films, from Cary Grant-starring North By Northwest to 2013 remake The Great Gatsby.
Today it is still a gem among the US hospitality industry and a night's stay there with breakfast will cost around $825.
1883: Construction begins on the first Plaza Hotel on the former site of the New York Skating Club.
1890: The first Plaza Hotel opens on October 1.
1905: The first hotel is demolished to build a bigger Plaza.
1910: The second Plaza Hotel opens at a cost of $12.5m exactly five years later on October 1.
1943: Conrad Hilton and Atlas Corporation buy the Plaza for $7.4m.
1964: UK pop group The Beatles arrive for a six-day stay.
1988: Mr Trump acquires the hotel for $390m.
2008: The Plaza reopens after a three-year refurbishment programme costing $450m and Fairmont takes over management of the establishment.