NEW YORK (AP) -- New York's famed Hotel Pennsylvania is safe from the wrecking ball, rescued by the economy rather than preservationists.
Plans to knock down the nearly century-old hotel, where jazz great Glenn Miller and his orchestra broadcast in the 1940s, and replace it with a 67-story office tower are "on the shelf," said Steven Roth, chairman of the Vornado Realty Trust, which has owned the building since 1998.
Although City Council approval of zoning changes for a tower to replace the 1,700-room hotel remains valid, the weak economy has led Vornado to switch gears.
"It's an interesting option to have, but it's not possible today," Roth said at an investor conference earlier this week. "We're not going to tear down the hotel. In fact, we're going to invest in it aggressively and try to make it into a really profitable, really good hotel."
Vornado declined to provide additional information about its plans for the building.
Roth, who will assume the additional role of CEO at Vornado on April 15, said the company is close to finding a partner and principal developer to help restore some of the hotel's former grandeur. The hotel is across from Madison Square Garden and Penn Station.
While its lobby retains traces of its origins and it still has the "Pennsylvania 6-5000" phone number made famous by Miller's orchestra, the Hotel Pennsylvania is now a budget-priced destination with a less-than-luxurious reputation among tourists.
The hotel averages 2 1/2-star reviews on travel websites and has been known for bed bugs, a common problem in Manhattan hotels.
A recent comment on yelp.com summed up what many of today's patrons say about the hotel, "Affordable, and you get what you pay for."
Vornado was near a deal in 2007 to build a tower to house new trading floors for Merrill Lynch, but the brokerage's board backed away from the plan days before it was expected to finalize the deal. Less than a year later, Merrill was on the verge of collapse when it was bought by Bank of America, as the economic crisis neared its peak.
Vornado went ahead with designs for the building and received City Council approval for needed zoning changes in 2010. The approval came despite objections from Empire State Building owner Anthony Malkin, who complained that a tower, 825-feet high, would block views from the Midtown landmark's observation deck.
Local preservationists also objected to the plan failed to get landmark status for the hotel, which opened in 1919 and was designed by renowned architects McKim, Mead & White.
In an interview Thursday, Malkin focused on the prospects for improving the hotel. "I think an upgraded Hotel Pennsylvania will be fantastic for the area," he said, noting that the neighborhood has a few hotels but can use more.
Gregory Jones, part of a small group that changed its name this week to the "Hotel Pennsylvania Preservation Society" from "Save Hotel Pennsylvania," said in an email that efforts to get the property landmarked will continue.
Jones said he found that at least some parts of the stately interior of the original hotel remain, but were covered by alterations done in the 1980s. The group intends to encourage Vornado to restore the building rather than simply renovate it.
Vornado, a real estate investment trust, owns 7.5 million square feet of office and retail space in the blocks surrounding the hotel. Roth said at the Monday conference that the company now aims to develop the hotel as part of its strategy to drive up the value of the surrounding properties.
"We're trying to make it an amenity to the area, where we have billions of dollars of assets surrounding it," he said.
The company is working with other hotel operators to formulate a plan for upgrading the Pennsylvania.