The new Chinese owners of New York’s Waldorf Astoria Hotel are getting a lesson in troubled Sino-American relations stemming from what the U.S. says are activities by China-based hackers and other forms of electronic espionage.

The U.S. State Department, after decades using the Art Deco luxury hotel as home base for U.S. diplomats during the United Nations General Assembly each fall, will shift this September to the nearby New York Palace Hotel, said a U.S. official, who confirmed the change first reported by the Associated Press.

The shift has been under consideration since Hilton Worldwide Holdings Inc. sold the midtown hotel in 2014 to Beijing-based Anbang Insurance Group Ltd. for $1.95 billion.

The decision hasn’t been formally announced and the official, who spoke on terms requiring anonymity, offered no comment on whether the move was due to concerns about possible Chinese spying.

Hilton, which continues to manage the property, is “confident there are no national security issues as a result of this transaction,” a spokesman said last fall when the issue arose. There was no immediate response to an e-mail request for further comment.

U.S. intelligence officials cite, among other things, concerns that the Chinese might install eavesdropping equipment during the planned renovation of the property, as they have in hotels in China.

White House spokesman Josh Earnest declined to say Wednesday whether President Barack Obama will also abandon the Waldorf.

Tight Security

The hotel, which has hosted every president since Herbert Hoover and is home to U.S. Ambassador to the UN Samantha Power, has been favored by world leaders and celebrities for its physical security. The Waldorf’s structure, which includes 27 public and private elevators, allows for security guards to be posted in the lobby and on the floors of the ambassador’s residence and suites used by top officials, as well as at the entrance to the units.

The 1,232-room luxury hotel was originally built in 1893 by William Waldorf Astor, the only child of financier John Jacob Astor III. The hotel was relocated from its original site on 33rd Street to Park Avenue at 49th Street in 1931. The spacious Presidential Suite, which starts at $1,999 a night, has over the years hosted guests including the Soviet Union’s Nikita Khrushchev and France’s Charles de Gaulle. The suite features furniture donated by U.S. presidents, including a wicker-backed rocking chair from John F. Kennedy and a wooden desk with carved eagle-claw feet from Dwight D. Eisenhower.

The New York Palace, known for a time as the Helmsley Palace, is located minutes away at 50th & Madison Avenue, near St. Patrick’s Cathedral and Rockefeller Center. TV shows including Gossip Girl, 30 Rock, and Law & Order have shot scenes in and around the Palace, according to the hotel.

The Palace’s owner, Northwood Investors LLC, a New York- based real estate investment and management firm, announced this month that it has entered into a contract to sell the hotel to the Lotte Group, South Korea’s fifth-biggest conglomerate, which has interests from shopping malls to candies. The transaction is scheduled to close later this year.

–With assistance from Sangwon Yoon in New York.

To contact the reporters on this story: Indira A.R. Lakshmanan in Washington at; Terry Atlas in Washington at To contact the editors responsible for this story: John Walcott at Ros Krasny, Elizabeth Wasserman

This article was written by Terry Atlas and INDIRA A.R. LAKSHMANAN from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: The Waldorf Astoria New York was sold to a Chinese insurance firm, and the U.S. decided it will no longer place its diplomats there when the UN convenes. Associated Press