MIDTOWN — The owner of the Plaza Hotel is planning to put the hotel on the auction block, with the gavel set to fall on the palatial hotel overlooking Central Park next month, according to a report in Bloomberg News.
A source “with knowledge of the matter” told Bloomberg News that David and Simon Reuben, the billionaire brothers who hold the mortgage to the hotel, have scheduled a foreclosure auction, putting up the Plaza's hotel, retail space and its restaurants April 26.
The circumstances regarding the foreclosure were not immediately clear. A representative of the Reuben brothers did not immediately respond to a request for comment.
The auction would put to rest years of uncertainty over ownership of the Plaza, which has changed hands numerous times in recent decades. The Reubens bought the hotel’s mortgage from its creditor, a Chinese bank, after the previous majority shareholder, Sahara India Pariwar, defaulted on loans thanks in part to a fraud case in India against its principal owner, according to news reports.
The Plaza Hotel has passed among property magnates in its 109-year history, with the hand-offs accelerating in the past 30 years. Donald Trump bought the palatial hotel in 1988, before passing it off to an investment group that included a Saudi Prince, according to Bloomberg.
The prince handed it off to Israeli firm El Ad Group, which still holds a minority stake after unloading 75 percent of shares to Sahara for $800 million in 2012, according to news reports at the time. Sahara defaulted on its loans after principal Subrata Roy became ensnared in fraud charges in India, and the Reubens paid the face value $800 million on the Plaza’s debt to the Bank of China, according to news reports.
The sale package includes the Dream Downtown Hotel in Chelsea, which Sahara bought along with the Plaza in 2012, according to Bloomberg.