NEW YORK — When The Plaza hotel opened in 1907, the cheapest rooms went for $2.50 a night, $4 with a bath, and some suites cost an astounding $25. But the steep prices seemed justified, given the location at Fifth Avenue and Central Park South, next to the mansion of Cornelius Vanderbilt II, and what it had cost to build the castlelike hotel with the stunning chandeliers: $12.5 million.

Nearly 100 years later, that's about what it will take to get in the door once most of the rooms at the hotel are converted into condos.

"I'm not saying I won't have a couple buyers at $20 million to $40 million, but the majority will be $5 million to $10 million," said Mike Naftali, president of Elad Properties, which is shutting the famous hotel April 30 to begin the $350 million conversion.

Those lower-priced condos will be small by neighborhood standards, 1,000 to 2,000 square feet, nothing like the mammoth places that have drawn record prices in the Time Warner Center. But that's "new construction," Naftali pointed out, the sort of glass-tower environment likely to draw new money, while the 200 condos in his "very romantic" property will be pitched to draw the old-money crowd out of their Park Avenue and Fifth Avenue pads.

The condo-conversion craze has been spurred by rising real-estate prices, with the average cost of units cracking $1 million in most of Manhattan last year. Hotels have been a favorite target because the owners can deliver empty buildings; there's no need to deal with residents holding long-term leases.

"In the last year, a dozen hotels have been [converted]," said John Turchiano, communications director for the New York Hotel and Trade Councils, the union most affected by the trend.

The Plaza has been a setting for scenes in books and movies such as "The Great Gatsby" and "Eloise at the Plaza." But to the 25,000-member union — which has lost 1,076 jobs to condo conversions in the past year — its significance is as the site of an additional 900 precarious jobs, many of which pay sums people beyond the Manhattan hotel scene might find hard to believe.

Forget the $100,000-plus that the uniformed doormen take in. Union officials said veteran banquet waiters can earn $200,000, thanks to generous tips written into all special-event contracts.

"We have a lot of guys that make a lot of money," said maintenance mechanic Ben Cooley, whose 26 years on the job are not unusual for the hotel's work force.

"They feel that this was a place they would be able to stay and retire," Cooley said of his co-workers, who know it will be hard to find jobs at their current pay.

The flip side of that is the contention by the Israeli development company that bought The Plaza last year for $675 million — about $838,000 a room — that such labor costs make it unfeasible to maintain the place as a 805-room hotel. Elad Properties is planning to have a 150-room hotel when The Plaza reopens at the end of 2006, and those rooms will be along East 58th Street, not on the choice park-view side.

Naftali said the downsized hotel would operate with about 150 employees. Current workers have been offered two weeks' severance pay for each year of service.

The hotel union is trying to pressure Naftali's group to scale back on the number of condos. Union President Peter Ward said the developers could make a $400 million profit if they converted only the top quarter of the 16-story structure and left the rest as a hotel.

But in the current real-estate market, Naftali sees no end to the condo conversions. "Every rich person in the world," he insisted, "will consider The Plaza as one of the places they want to own an apartment."

The Plaza means so much to Joan Yatsko that she and two colleagues in a New Jersey radiology office created www.friendsoftheplaza.com and are collecting online signatures for a petition to save the hotel. "My parents spent their wedding night there in 1947," said Yatsko, 49. "Growing up, it was always like The Plaza was the epitome of class."

On the Web site, six of the most prominent Plaza rooms are pictured: the Palm Court with its columns and faux skylight; the ornate, wood-paneled Oak Room and Oak Bar; the historic Grand Ballroom; and the lobbies on Fifth Avenue and East 59th Street, also known as Central Park South.

The six rooms have been "calendared" by the city's landmarks commission. That means the rooms will be the subject of an as-yet-unscheduled public hearing on their eligibility for landmark status and may not be touched until that is resolved, said Robert Tierney, chairman of the landmarks commission.

"Even to be calendared suggests some significance," he said. "The question is, is it significant enough to be a landmark?"

Every U.S. president since William Taft has made at least one visit to The Plaza. Not to mention a parade of kings and queens and a galaxy of cultural stars from Mark Twain and F. Scott Fitzgerald to the Beatles and architect Frank Lloyd Wright, who kept a suite there during the construction of his Guggenheim Museum.

The hotel is the subject of several books, but many children and adults know it best from the "Eloise" series. Begun in 1955 by Kay Thompson, the books, and later the film, chronicle the life of Eloise, a spoiled, but charming, 6-year-old who lives with her British nanny in The Plaza and drives the management crazy.

Material from the Chicago Tribune

is included in this report.