March 7 (Bloomberg) -- With a $400 million overhaul added to the $675 million purchase price, Miki Naftali and Elad Properties have more than $1 billion riding on the rebuilt Plaza Hotel.

The historic exterior and grand public rooms have been impeccably restored, yet the New York icon feels embalmed rather than enlivened. Reopened on March 1, Naftali has positioned the hotel in the ``six-star'' luxury stratosphere as he prepares an 11.5-million-square-foot brand extension into Las Vegas.

Designed by Henry Janeway Hardenbergh in 1907, the Plaza's restored chateau-on-steroids exterior retains its unabashed opulence. The hotel never traded on elegance but on a marble- slabbed, heavy draped, chest-thumping masculine splendor.

Still, the plaza is a legend as well as a building: Russian Princess Vilma Lwoff-Parlaghy with her lion cub, F. Scott Fitzgerald's dunk in the Pulitzer fountain, a pioneering wardrobe malfunction by Marilyn Monroe, Kay Thompson's venerable ``Eloise.''

Legend or no, the place was a wreck, Elad President Naftali said in an interview. To underwrite the top-to-bottom overhaul the much-remodeled pile has never had, he rebuilt rooms facing Central Park and Fifth Avenue into 182 condominiums, rapidly selling them out, with one price topping $50 million.

The hotel has shrunk to 130 rooms on the West 58th Street side and 152 larger ``hotel residences'' (formerly known as time shares) stacked on top. Because of the condos, only a few hotel rooms get partial Central Park views.

Stained-Glass Ceiling

Restoration architect Walter B. Melvin has gorgeously recreated the l,200-square-foot stained-glass ceiling in the Palm Court. Called a laylight, the original was destroyed by Conrad Hilton in 1944 in favor of a solid ceiling and air conditioning. The laylight still doesn't open to the sky, but an automated lighting system impressively suggests the passing of the day.

Restoration of the Edwardian Room, with its wrought timber ceiling beams, and the Terrace Room, with its Renaissance-style vaults near completion while Naftali seeks super-luxe retailers willing to live within the building's landmarked splendor.

I hoped architect and designer Gal Nauer would bring a sexy new glamour to an added lobby and the gutted and rebuilt rooms. Regrettably, she mixes a stiff formality with Walt Disney whimsy.

Grand New Lobby

She reclaimed a forgotten space south of the Fifth Avenue entrance for a grandly scaled, crystal-chandeliered new hotel lobby. (The old one on 59th Street is reserved for condo owners.) She crowds a showroom's worth of velvet-and-gilt furniture into the edges of the room, leaving a ballroom-size swath of gold-trimmed marble floor to frame a floral medallion that looks like a Rorschach blot.

She furnishes the Palm Court with throne-like powder-blue chairs so heavy they give waiters a workout. It doesn't get better at the Rose Bar, a luridly upholstered, low-ceilinged lounge accessed by a grand stair that appears to have collided with a column.

She's tucked a fussy, multilevel mini-mall into the 58th Street side, presided over by an undernourished chandelier. Come May, it will be home to a Caudalie spa and a food hall modeled on Harrods, with Plaza-branded delicacies and souvenirs.

Reproduction formality rules the guest rooms, where delicate, gold-trimmed side tables and curlicued headboards look stranded against stark white walls. The grand baths with carved marble pedestal sinks and 24-carat gold faucets come with an amateurishly drawn flower stem by Nauer worked into the tile.

No Surprises

This kind of luxury will comfort those who don't want surprises -- or character -- in their hotel visit. With room rates starting about $1,000 per night, Fairmont, the hotel operator, promises a highly personalized guest experience. A white-gloved butler presides over each floor, ready with a cup of coffee or a reservation at the Palm Court or Oak Room (opening in May).

Nauer's second-rate traditionalism can't kill the Plaza, it just makes creating a distinct new personality more of a challenge.

I'm not sure that's Naftali's goal, though. Up next is the Plaza Las Vegas, a casino resort with six towers crowned by Plaza-like mansard roofs and themed with ``Eloise.'' Did Naftali and his team rebuild the Plaza so painstakingly to create new legends or milk old ones?

(James S. Russell is Bloomberg's U.S. architecture critic. The opinions expressed are his own.)

To contact the writer of this story: James S. Russell in New York at jamesrussell@earthlink.net.

Last Updated: March 7, 2008 00:02 EST