Troubled Plaza Hotel goes under hammer

The Sahara group has been trying hard to raise funds through refinancing of loans on Plaza and Dream Downtown properties

New York’s 109-year-old Plaza Hotel is poised to go on the auction block next month, ending two years of uncertainty over its ownership.

David and Simon Reuben currently hold the mortgage for the premium property  located at the corner of Fifth Avenue and Central Park South, and have scheduled a foreclosure auction for April 26, Bloomberg reported.

The Reubens bought the loan from Bank of China after a default by the five-star hotel's current majority owner, Sahara India Pariwar, last year. Sahara is under major financial strain, after its head Subrata Roy, was imprisoned in early 2014 for defrauding investors.

The chateau-like Plaza has had several changes in its ownership. Republican Presidential candidate Donald Trump bought the Plaza in 1988 and married his second wife, Marla Maples, there. He sold it to a collective of owners 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 still retains a minority stake in the Plaza, as does an entity tied to hotelier Sant Singh Chatwal.

The Plaza Hotel will be sold in a package with the Dream Downtown hotel, which is located in Manhattan’s Chelsea neighborhood that is located one block from the elevated High Line park. The package will include the Plaza’s hotel rooms, its restaurants and retail space.

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 too is jointly owned by Sahara’s Subrata Roy and Chatwal. The combined mortgages for the New York properties total nearly $500 million.

Reuben Brothers declined to comment. The Plaza is the site of the 1985 signing of the historic Plaza Accord to devalue the US dollar.