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Waldorf Astoria Moves Toward Luxury Condo Conversion and Anticipates Closing During the Renovation for up to 3 Years, Costing nearly $1 BillionPDF Icon

After China-based Anbag Insurance Group purchased the Waldorf for $1.95 million in late 2014, the firm’s chairman expressed the intent to convert the hotel into high-end condos, while maintaining a smaller five-star hotel. In 2015, the NY City Council passed a law banning hotels with more than 150 rooms from converting over 20% of the property into residences. The law exempted recent transactions, including the Waldorf. Standing in the way of moving forward were the 1,221 Waldorf union workers, whose jobs were protected by the Waldorf’s contract with the New York Hotel and Motel Trades Council, a union which represents hotel workers. The Waldorf reached a record deal with the union in which the hotel could pay almost $149 million in severance packages over the next two years. The average payout will be more than $142,000, with a handful of employees eligible for more than $300,000. One longtime worker is walking away with $656,409.68. Hilton Worldwide will continue to operate the hotel portion of the building. It has been announced that the entire hotel will be closed for renovation.

Other major Manhattan hotels have opted to fully close down while undergoing extensive renovations, starting with the Peninsula in 1998. The Plaza Hotel, later, in 2004, through its developer, El Ad, decided to close the hotel before starting the demolition and reconstructive work. When El Ad elected to proceed, first, by abatement of asbestos and other environmental contaminants, Osborn Law was retained, as environmental counsel, to oversee the preparation of technical analyses and to address regulatory concerns relating to the contracts for abatement and demolition of asbestos containing plaster. The environmental consultant and abatement team were able to carry out the asbestos abatement, based on regulatory protocols which provided for the disposal of plaster with asbestos content in excess of 1% ACM as “hot”, while plaster with lesser asbestos content could be disposed of, much more cost-effectively, as construction debris.

Keeping the Lights On During Renovation

On the other hand, many hotels are renovated without closing a single day. During the 1990s, the New York Palace, and the New York Hilton continued to serve guests while undergoing large scale renovations.  The New York Palace renovation was especially renowned as it featured the construction of an extravagant lobby which was built 50% at a time; while half of the lobby was being built, the second half was open to the public. Because of adept phasing, the hotel guest could barely discern that a renovation was taking place. Similarly, the NY Hilton coordinated adeptly to keep guests satisfied while undergoing an extensive renovation in the 1990s. Whether renovating “with the lights on” or fully closing down the hotel until completion of the work, honoring the following tips is essential:

  • Make a thorough physical assessment of the area to be renovated, especially in an older facility with crumbling masonry, plaster, or corroded piping;
  • Conduct an environmental assessment. Failure to account for asbestos, lead paint or conditions leading to mold contamination or legionella can cause delays and complicate renovation work;
  • Prior to bidding the work, require the architect to provide a complete design and take care to sequence the work with a focus on avoiding dust contamination, security risks and accidents;
  • Enter into sound construction and design contracts, which clearly define the scope of work, coordination and methods of dispute resolution; and
  • To avoid overruns and delays, develop a streamlined method of communication and prompt decision-making among the key players – the hotelier, architect and contractor.

If You Decide to Stay Open While Renovation, Meet the Daily Challenge

The theme is the same whether renovating or operating a hotel. Be responsive, efficient and user-friendly.  Keeping the lights on during renovation is a daily challenge, requiring a committed renovation team that is well informed, consistently involved and focused on schedule, budget and serving the guest.

Published: June 30, 2016

Pepsi-Cola Sign in Long Island City is Designated a Landmark | PDF Icon linking to PDF version of article

When asked “Where is Queens West, Exactly?” Point to the Pepsi Sign

Almost 30 years after being calendared for landmark designation, the Pepsi sign, on April 12, 2016, was designated as a landmark.  The sign, built in 1936, was installed at the top of the Pepsi bottling plant in Long Island City.  The bottling plant, closed in 1999, is gone – the sign remains.

Although a landmark must be at least 30 years old, the designation often takes considerably longer.  Some examples are the Chrysler Building which was landmarked in 1978, the Empire State Building landmarked in 1981 and the Rockefeller Center landmarked in 1985.

As the Pepsi sign was being designated as a landmark, the Landmarks Preservation Commission Chair, Meenakshi Srinivasan observed, “This is probably one of the most universally loved and recognized signs and it represents many things, and tells a specific story about industry in Long Island City.”

The Pepsi sign has a storied and charmed place in history. Its place on the Cityscape was cemented when, in 2001, the developer of the north end of the Queens West waterfront complex was able to buy 21 acres from PepsiCo., while PepsiCo reserved a 60 by 200 foot parcel as the permanent home for the Pepsi sign.  Quoted in the New York Times on July 10, 2013, Jon McMillan, the planning director at TF Cornerstone said, “Pepsi was not going to sell the land to anyone unless they kept the sign.”

On July 10, 2013, New York Times writer, David W. Dunlap, put the Pepsi sign’s incredible and lasting resilience and prominence in perspective: “Once regarded as an eyesore, the sign is generally embraced as a symbol of Long Island City’s industrial past, as a colossal work of Pop Art and as a way for those who live in the six buildings of TF Cornerstone’s Long Island City development to orient friends and families.”

For residents of the TF Cornerstone development, it is no longer necessary to ask “Where Is Queens West, Exactly?”

The Landmark Designation Process

The New York City Landmark Commission, formed in 1965, defines a “landmark” as an improvement, at least 30 years old, which has a special character or special historical or aesthetic interest or value as part of the development, heritage or cultural characteristic of the city, state or nation.

There are four types of landmarks:

  1. Industrial Landmarks, such as bridges, certain skyscrapers or the Coney Island Wonder Wheel;
  2. Interior Landmarks, such as the Ed Sullivan Theater;
  3. Scenic Landmarks, such as Central Park or Prospect Park; and
  4. Historic Districts which hold architectural or historical significance such as Ladies’ Mile in Manhattan or Cobble Hill in Brooklyn. [Note that the Landmarks Preservation Commission extended the Park Slope Historic District in Spring 2016 by adding 300 more buildings.

Demolition of a landmark is prohibited unless the owner can present financial reasons for the demolition—even then the City might try to find a more cooperative buyer for the building, offer tax abatements or enable selling the building’s air rights to create a scenario under which demolition would be avoided. The landmark status also requires the owner to keep the building in good shape and safe to operate, in return for which the owner will be eligible for tax abatements and favorable loan arrangements as well as other benefits.

In Spite of Preservation Victories, Notable Losses: For Example, Old Penn Station

Preservation by private organizations and citizens’ groups had a number of preservation victories including most notably Carnegie Hall in 1956 and the Dakota Apartment building in 1961 (later landmarked in 1970). In spite of notable preservation victories, a majority of condemned buildings went without any organized protest, including most notably, the tearing down of New York’s old Penn Station in 1963 – 1966.

Published: May 6, 2016

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