Famed Plaza Hotel still mired in trouble

May 18, 2011 12:26PM

With the controversial Miki Naftali stepping down from the Plaza’s helm, the recent record $48 million sale of a 12th-floor spread, and the pre-Lehman-esque $37.5 million asking price on the penthouse unit, it appears the landmark building has steered clear of the financial storm. But according to the Observer, The Plaza is still stuck in choppy waters. The primary concern is the retail spaces on the coveted Fifth Avenue lot. The Oak Room is closing in July, the Edwardian Room has been looking for a new tenant for years and the Shops at The Plaza are mostly vacant, having already gone through two cycles of retailers. Prudential Douglas Elliman retail broker Faith Hope Consolo simply asked, “Why would you want to be in this maze when you could be on Fifth Avenue?”

Though Todd English’s new food hall in the building is packed, the surrounding shops are too expensive to attract its own foot traffic, the Observer said. As are the residential condominium units above. The Observer reported that only the record-breaking sale garnered a higher price than the seller originally purchased the unit for, and even that took a multi-million dollar renovation that might have resulted in a net loss for the seller. Adding insult to injury, the building has earned several complaints for shoddy construction. As a result, compared to other famed New York City apartment buildings, The Plaza still has a lot to overcome to live up to its stellar reputation. [NYO]