The 1.95-billion purchase of the Waldorf Astoria by a Chinese insurance firm earlier this year campe with plans to convert part of the building into high-end condominiums while maintaining a smaller five-star hotel.
However, the hotel’s 1,221 union workers claimed their jobs were protected by the Waldorf Astoria’s contract with the New York Hotel and Motel Trades Council, a union that represents hotel workers. The owners of the Waldorf, New York’s largest union hotel employer, reached a record deal with the union in which the hotel could pay nearly $149 million in severance packages to its employees 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 worker is walking away with $656,409.68.
“It is a great deal,” said Peter Ward, the head of the Trades Council. “There are people of retirement age, hundreds of them, that are getting over $200,000 in severance.”
Under the terms of the deal, employees will receive 29 days of pay per year they worked, or 58 days if they are tipped employees. The typical union severance package is just four days of pay per year, or eight days for tipped employees.
The Trade Council negotiated with Hilton Worldwide, which operates the Waldorf, and the Blackstone Group, which owns 46 percent of the hotel chain, over several months this spring. Hilton will continue to operate the Waldorf as part of a 100-year agreement it signed with the new owner. As the negotiations were occurring, a bill backed by the union was making its way through the City Council that would have placed a moratorium on hotel-to-condominium conversions like the one the Waldorf is planning.
Last month, around the time that the severance package was finalized, the City Council approved the legislation, placing a two-year ban on owners of Manhattan hotels with at least 150 rooms from converting more than 20 percent of the rooms to condominiums. Hotels that had been purchased in the previous 24 months and where the buyers had expressed an intent to convert were exempt, including the Waldorf.