Nearly 100 years into its life as an icon of wealth and status in New York City, the Plaza Hotel was purchased in 2004 by El Ad, a condominium developer with grand ambitions to convert the historic hotel into apartments. After a protracted fight with New York City’s powerful hotel union, the developer agreed to curtail its design, creating some 180 multimillion-dollar condominiums and retaining a small boutique hotel. The apartments opened in 2007. In this excerpt from her book The Plaza: The Secret Life of America’s Most Famous Hotel, author Julie Satow details the eye-popping sums paid by the likes of Robert Kraft, Suze Orman, and Tommy Hilfiger for these apartments—and the drama that ensued when they were far from the spectacular homes that were promised.

In New York, luxury condominiums are chock-full of owners who purchase their units through shell companies, using money obtained through possibly illicit means. But who these buyers are, and how they arrive at the building, isn’t a primary concern for developers and brokers. Like other condominium developers, when El Ad began selling the Plaza Private Residences, as the reimagined hotel rooms were called, its chief priority was to generate as large a profit as possible. A team of real estate brokers was hired to accomplish this, and their responsibilities included marketing and sales—not investigating their clients.

Alexa Lambert, an agent at the brokerage firm Stribling, was put in charge of marketing the Plaza’s splashy new condominiums. “I’ve never worked so hard in my life,” she told me. For Lambert and her three-person team, pitching the Plaza units was challenging, mostly because they didn’t yet exist. Unlike the grand celebration in 1907 that greeted Alfred Gwynne Vanderbilt, John “Bet-a-Million” Gates, and other guests on the Plaza’s opening day, in 2005, buyers were introduced to a property that was a complete wreck. Rather than red carpets, claw-foot bathtubs, and arched windows overlooking Central Park, they found a gutted structure filled with dust, loud banging, and a constant crush of construction workers. Potential buyers entering on Fifth Avenue were ushered around mountains of debris and equipment to the corner where Fifth Avenue and Central Park meet. There they found a sales office, the room’s dark wood paneling and gracious interiors converted into cubicles and oversized video screens.

It would be more than two years before the Plaza condos were complete, so Lambert and her brokerage team showed buyers idealized digital depictions of what El Ad planned to build. This was before the widespread use of virtual reality, and buyers were offered a panoply of video renderings, as well as blown-up photos of the various views, taken from every window of the gutted interior. A Plaza replica in miniature helped them envision their new homes using light up apartments to illustrate the units and floor plans. The model, while accurate in many details, was inexplicably surrounded by bucolic green hills rather than a bustling cityscape.

Even with the chaos of construction, and the fact that there were no apartments to see, that first day multiple contracts were sent out to interested buyers, and the calendar was already booked with appointments. Colleagues at other brokerage firms who wanted to see the new project complained that their calls weren’t being returned fast enough, and many grew frustrated when their high-profile clients were forced to wait days to get inside. Lambert, a pretty brunette with a friendly smile and a no-nonsense persona, did her best to handle the velocity of calls and appointments. Even with two small children at home, she would often arrive at six o’clock in the morning and still be there at eleven o’clock at night. It became so crazy that her harried team started ordering lunch as soon as they arrived in the morning, in hopes they could find a few minutes to scarf down sandwiches between appointments.

Prospective buyers were willing to spend astronomically on these imagined apartments. Even by the elevated standards of the mid-aughts, when a historic real estate bubble was reaching its peak, the Plaza’s prices were high. If an exclusive Fifth Avenue home was selling for $3 million, at the Plaza a similar unit was asking $5 million; if that Plaza unit overlooked Central Park, it was even more. And absolutely everything was extra: the basement storage bins cost more than $40,000 each; the Plaza’s fitness center was accessible only by shelling out $10,000 in dues before stepping foot on a treadmill; and maid service, provided by the hotel, cost nearly $500 for a full day’s work. “It was hard to understand what a new frontier it was in terms of pricing,” Lambert told me. “It was completely new to have a $5 million or $6 million one-bedroom...It was just nuts.”

At the Plaza, the high price tags seemed only to stoke more interest. There were high-powered New York lawyers, Wall Street hedge funders, Hollywood executives, and foreign tycoons who put down deposits, some sight unseen. One buyer was driving down a Los Angeles freeway in his convertible when he called the sales center. As the broker struggled to tell him about the different apartments over the din of the traffic and the strong wind, he brushed her off. Instead, the caller decided on the spot to buy a $12 million pad with Central Park views. In another case, a multimillionaire had promised his wife that should he ever become successful, they would live at the Plaza. He called the sales office and ordered her a penthouse for $20 million, with about as much due diligence as if he were ordering Chinese takeout.

Other buyers who did come to the sales center shocked the staid brokers with their behavior. There was one foreigner who arrived with an armed security detail, the guards standing at attention with their guns in full view while he perused the marketing materials. In other instances, buyers inquired if they might not pay with a suitcase of gold; or bags of cash; or half in euros. The brokers told them that real estate sales must be transacted through a lawyer, and the offers were politely declined. Brokers couldn’t accept cash for an apartment, but they could accept buyers without having to check their backgrounds. This proved a problem when a Brazilian woman, for instance, who was in the process of buying several units at the Plaza, was arrested for running a high-priced call girl ring on the Upper West Side; she was sent to prison before the transaction closed.

Buyers who wanted to do more than sit around in the sales office looking at renderings were out of luck. El Ad strictly forbade any prospective buyer from venturing into the building’s construction zone. Not only would that have hurt the rarefied image it was trying to project, but El Ad didn’t want to take a chance that one of the world’s wealthiest people might accidentally injure themselves in a mishap. Some potential buyers, used to getting their way, bristled at the rule. “It’s kind of silly,” Maria Baibakova, the daughter of Oleg Baibakov, a former Russian metals magnate, told Bloomberg News. “If you are buying a $30 million apartment, you are entitled to see the view.”

At least one VIP circumvented the prohibition. “I got to know [Yitzhak] Tshuva,” Robert Kraft, owner of the New England Patriots football team, told me, referring to the Israeli developer. “We were playing the Jets and I came in early, before going to MetLife [Stadium], and I walked the building.” Kraft likened the half-built condominium to visiting a bombed-out city, but it didn’t deter him from buying. Like many others, Kraft had a nostalgic connection to the Plaza. As a student in the early 1960s at Columbia, he often frequented Trader Vic’s with his buddies, and later, during the years when Alphonse Salomone was running the hotel, Kraft spent his wedding night there.

Having led the Patriots to a record-breaking 11 Super Bowls, Kraft used his team to help him decide which unit to buy. “They said I could have any apartment I wanted, so I was thinking I would do the 12th [floor], because that’s Brady,” he said, referring to the legendary Patriots quarterback Tom Brady, whose jersey number is 12. But then Kraft decided to expand into two units and combine them, and there was only one option that hadn’t already sold, on the 11th floor. “So I went from Brady to Edelman,” Kraft said, referencing Patriots wide receiver Julian Edelman, who wears number 11.

The floors surrounding Kraft would be filled with a who’s who of the business world. His neighbor on the 11th floor was Dave Barger, the former CEO of JetBlue. One floor below was Tom Mendoza, the vice chairman of NetApp; and one floor above was Amir Elstein, an executive at the pharmaceutical giant Teva. There were several Hollywood executives, including Simon Fuller, the creator of the reality-TV singing contest American Idol, on the 9th floor; and the COO of Viacom, Thomas Dooley, who moved in down the hall. Doug Morris, the chief executive of Sony Music Entertainment, was upstairs on the 16th floor; while Paul Schindler, a powerful entertainment lawyer, was on the 17th floor.

Other famous buyers included Tommy Hilfiger, who purchased a penthouse that featured a cupola, the fashion designer hiring the illustrator Hilary Knight to cover its walls with an Eloise-inspired mural. The Plaza condominium also drew Guy Wildenstein, an art collector and gallery owner, who snatched up several apartments to create a duplex large enough for his extended family. Several Wall Street figures were also buyers, including the hedge funder Martin D. Sass, who bought a penthouse; Earl McEvoy, an asset manager at mutual fund Vanguard; and Kenneth Moelis, an investment banker who once worked for Donald Trump. The chief executive of Bear Stearns, James Cayne, purchased two apartments for $28 million on the 14th floor. He closed on the units just a month before his bank collapsed in the wake of the 2008 financial crisis; despite the turmoil, Cayne didn’t sell his new home.

There were also several women owners, including Suze Orman, the financial guru, who bought on the 12th floor; and the socialite and philanthropist Mary Q. Pedersen, who bought on the 5th floor. Patty Farmer, an informal Plaza historian who wrote two books on the hotel, bought on the 8th floor. There was even an Olympian, Ann-Kathrin Linsenhoff, a gold medalist in dressage at the 1988 Seoul Olympic Games, who bought on the 14th floor.

Lambert and her team of brokers welcomed countless would-be buyers who arrived wearing Prada and dripping with diamonds. But many failed to look the part. Before appointments, the brokers were often frantically googling names to determine who had sufficient financial backing and who was merely window-shopping. One wealthy couple, for instance, owned a car dealership in Ohio. “If I didn’t know better, I would have thought I was being punked by one of my friends,” said one of the Plaza brokers. “The guy had a really bad toupee, and a tacky wife with platinum blonde hair. I was like, ‘For real?’” (The couple didn’t end up buying.) After the appointments, the agents handed out marketing materials to potential buyers, enclosing the brochures either in expensive leather pouches embossed with the Plaza logo or in cheaper linen versions. They took to examining visitors’ shoes to determine who was worthy of the leather pouch, and who the linen: Those with expensive footwear were given the leather cases.

When, in the summer of 2007, the apartments were finally ready for occupancy, there was a rush of excitement. The celebrations, however, would turn out to be premature. It was like “Extreme Makeover: Home Edition—only the total opposite,” quipped Vanity Fair. The apartments were finished, yet there was a litany of complaints. One couple moved into their $4.75 million two-bedroom to find the doors were missing their doorknobs, while another complained the hallway carpeting on the penthouse floors was cut and pieced together, a cheap method known as “patch-n-match.”

There were allegations that El Ad had taken a number of shortcuts, including using low-density marble from China rather than Italian marble, and installing mahogany closets that were really just veneer over industrial particleboard. Lawsuits and countersuits were filed between El Ad and various contractors over unfinished work and unpaid bills. The restaurateur who signed a lease for the Oak Room also ended up in litigation with El Ad, as did other retail tenants. In all fairness, the process of creating luxury apartments in a building that was more than 100 years old, and protected by landmark status, would be a challenge to any developer. Zoltan Saro, a partner at Costas Kondylis’s architecture firm, called the redevelopment project “my two-year nightmare,” complaining that every wall they opened, every steel beam they removed, resulted in some unforeseen challenge that led to costly adjustments.

Still, the Plaza buyers were an exacting group, and there was little patience for excuses. Particularly aggrieved was “the Russian in the penthouse,” as Andrey Vavilov, a hedge fund billionaire and energy magnate, was known among the residents. Vavilov, a former Russian finance minister, was so rich he reportedly kept large bags of cash in his Moscow home and expressed his love for his wife, the actress Maryana Tsaregradskaya, by posting amorous declarations to her on enormous billboards across the Russian capital.

The colorful oligarch was also known for having narrowly escaped death when, in 1997, a bomb blew up his empty Saab while it was parked in front of the Finance Ministry; the perpetrators were never caught.

A decade after his near-death experience, in 2007, Vavilov told the Plaza brokers “in no uncertain terms that he wished to own the largest and most expensive apartment at the Plaza,” according to lawsuits that were later filed. He zeroed in on the Plaza’s penthouses, but in one of the ironies of the building, these upper floors had been built more than a century earlier to serve as servants’ quarters. When Trump acquired the hotel, he submitted and received approvals to carve these upper floors into penthouses, and his permits were still valid. El Ad relied on Trump’s designs, but it was still hamstrung in what it could alter because of the building’s original layout and its landmark status.

In its offering plan, El Ad noted that the ceiling heights and apartment sizes might vary due to the historic nature of the building and its accompanying restrictions. But Vavilov claimed that the sales pitch he received glossed over such specifics. He readily plunked down $53.5 million to buy a duplex and a triplex on the top floors that he planned to combine. It would have been the highest price at the Plaza, and the second-highest price ever for a Manhattan condominium. (The honor of the priciest unit at the Plaza would instead go to Harry Macklowe and his $51.5 million one-bedroom.)

In June 2008, more than a year after Vavilov gave his deposit, his new penthouse residence was ready. His wife, who had been plotting her entrance into New York society and had hoped the fabulous new home would cement her standing, arrived for a tour. But when she entered the space, what greeted her was a decided step down from the vision she had conjured up in her imagination. Rather than a spectacular home that would inspire awe and incite jealousy among her rich Russian friends and New York’s upper crust, the home was an embarrassment. The narrow windows were small and oddly shaped, beginning partway up the wall and then sloping inward into the apartment, more like skylights than a wall of glass. Outside, enormous drainage grates and large setbacks blocked what was supposed to be unimpeded views of Central Park. Most egregiously, there was an enormous column, which housed air-conditioning units, situated directly in the middle of the living room. Upon seeing her new home, Tsaregradskaya burst into tears.

Promptly, Vavilov went on the attack. He refused to close on his purchase, and filed a suit alleging the home was a “glorified attic space.” The couple put out a press release titled “Fraud at the Plaza?,” calling it “a classic bait and switch.” “My client was led to believe that it would receive one of the most luxurious apartments in New York history; it got far less than what it bargained for,” Vavilov’s lawyer, Y. David Scharf, declared.

El Ad was frantic that the bad press might create a run on other apartment buyers who wanted their deposits back. It aggressively punched back, filing a countersuit alleging defamation. Vavilov, El Ad insisted, was just bitter because Macklowe usurped him in the race to purchase the biggest apartment at the Plaza. Vavilov had tried to buy more penthouses, El Ad said, but it was too late, and they were already sold out.

After months of mudslinging, the two sides settled. Vavilov agreed to complete his purchase of the smaller of the two units, buying the duplex for $11.2 million. As soon as Vavilov closed, he re-listed the apartment, selling it to Maribel Unanue McVicar, an heiress to the Goya food fortune, for just $8.4 million. The Vavilovs ended up staying in the neighborhood, passing up the Plaza to purchase a full-floor penthouse at the nearby Time Warner Center.

From the book The Plaza: The Secret Life of America’s Most Famous Hotel. Copyright (c) 2019 by Julie Satow. Reprinted by permission of Twelve/Hachette Book Group, New York, NY. All rights reserved.

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