(Bloomberg)—Next month’s auction for the Plaza Hotel in Manhattan was canceled after the holders of the mortgage reached a deal to give the borrowers more time to sell the property and pay back the loan, said a person with knowledge of the matter.
The hotel’s ownership has been in limbo for two years. Billionaire brothers David and Simon Reuben hold the mortgage on the five-star hotel and had scheduled a foreclosure auction for April 26, according to the person, who asked not to be named because the deal is private. The Reubens bought the loan from Bank of China Ltd. after a de fault by the property’s current majority owner, Sahara India Pariwar, last year. Sahara is controlled by Subrata Roy, who was imprisoned in India in early 2014 for defrauding investors.
A spokesman for the Reuben brothers didn’t immediately respond to an e-mailed request for comment.
The chateau-like Plaza, located at the corner of Fifth Avenue and Central Park South, has changed owners many times over its 109-year history. Presidential candidate Donald Trump bought the Plaza in 1988 and married his second wife, Marla Maples, there. Trump sold it to a group including Prince Alwaleed bin-Talal of Saudi Arabia, who then sold it to Israel’s Elad Group, which converted some of the hotel rooms to condominiums. Bin-Talal retains a minority stake in the Plaza, as does an entity tied to hotelier Sant Singh Chatwal.
For sale were the Plaza’s hotel rooms, its restaurants and retail space, according to the person with knowledge of the matter. It was to be sold in a package with the Dream Downtown hotel, a trendy property in Manhattan’s Chelsea neighborhood that is located one block from the elevated High Line park, the person said.
The two hotels serve as collateral for the Bank of China loan and are cross-collateralized with the Grosvenor House hotel in London. The Dream hotel is owned by Sahara’s Roy and Chatwal. The combined mortgages for the New York properties total about $500 million, the person with knowledge of the matter said.
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