Trump Tells Congress U.N. Should Abandon Turtle Bay
BY MEGHAN CLYNE - Staff Reporter of the Sun
July 22, 2005
WASHINGTON - The U.N. renovation project will probably cost $3 billion - more than double the United Nations's estimate of $1.2 billion, and more than four times the $700 million the project would cost if it were being managed competently, real estate developer Donald Trump told senators here yesterday.
The best solution to the United Nations' refurbishment woes would be for the organization to abandon its current Turtle Bay headquarters entirely and relocate to the new office towers being built at ground zero, Mr. Trump said.
Mr. Trump's assessments were delivered in testimony before the U.S. Senate subcommittee on federal financial management, government information, and international security. The chairman of the subcommittee, Senator Coburn, a Republican of Oklahoma, investigates cases of waste and financial mismanagement at the federal level.
One such case, Dr. Coburn has said, is the U.N.'s plan to undertake a complete renovation of its headquarters at Turtle Bay, at a cost of $1.2 billion, 22% of which would be shouldered by American taxpayers. The renovations - set to begin in 2007 and expected to take five years - would be financed by America in the form of a $1.2 billion, 30-year loan at 5.54% interest offered last fall by the Bush administration.
As The New York Sun reported in February, the $1.2 billion price tag for the project appeared exorbitant to many New York real estate developers, including Mr. Trump. Their concern begat alarm in Washington, where legislators, particularly Senator Sessions, a Republican of Alabama, have launched a campaign to limit the amount of America's loan and make it contingent on greater transparency in the U.N.'s construction.
Mr. Trump said the construction of the brand-new Trump World Tower - a 90-story luxury residential complex in Turtle Bay - cost roughly half what the United Nations expects to spend on the renovation on a per-square-foot basis.
Anyone who says that building renovation is more expensive than building a new building doesn't know the business, the developer said. It only costs a fool more money.
Mr. Trump said that, as a result of meetings with Secretary-General Annan and conversations with other U.N. officials, he had come to the conclusion that the world body was being naive, at best, in its approach to the renovations. I'm going to predict that it will cost over $3 billion because they just don't know what they're doing, Mr. Trump said of the project. In my real opinion, it should cost around $700 million, he added.
His dream, the developer added, would be to take the United Nations and move it to the World Trade Center as a brand-new U.N., and sell the U.N. site for much more money than the renovation would cost.
Mr. Trump conceded that such a move was unlikely. As the Sun reported in December, the United Nations was offered space at ground zero in 2002 and turned it down, citing an excessively taxing commute for U.N. employees living in Midtown.
The developer appeared at the hearing at the invitation of Mr. Sessions, who joined Mr. Trump as a witness. Mr. Sessions, along with Dr. Coburn, expressed grave concern about the U.N.'s unwillingness to provide information to the Senate about the renovation project, including a cost breakdown, auditing records, and material about the design work done on the project.
In view of the lack of transparency, Mr. Sessions and Dr. Coburn pledged their continued vigilance of the project at yesterday's hearing. Congressional oversight on this project is only beginning, Dr. Coburn said. This committee will not let go of this issue, period, he added.
Legislation introduced by Mr. Sessions to cap at $600 million the amount of any American loan to the U.N. for the purposes of renovation was passed unanimously by the Senate on Wednesday.
The legislation was nonbinding, but both Dr. Coburn and Mr. Sessions have promised to continue their efforts to prevent wasting American taxpayers' dollars. In light of the concerns raised by Mr. Trump and others at yesterday's hearing, Dr. Coburn said, There ought to be a complete stop until they've really looked at this.
Mr. Trump offered to manage the renovation free of charge, promising to keep the cost down and start on the project within months by eliminating the concept of swing space, which he labeled asinine.
The United Nations claims that it must vacate its headquarters entirely during the renovation process owing to threats posed by asbestos. It had initially sought to erect a 35-story edifice over a neighboring city park for the purpose, at a cost of an additional $650 million on top of the $1.2 billion renovation cost.
The world body's plans were stymied, however, by the New York State Legislature, which refused to approve the bill necessary for the U.N. to use the parkland. New York State was represented at the hearing one of the legislature's leading opponents to the U.N. expansion project, state Senator Martin Golden, a Republican of Brooklyn, who testified on the panel with Mr. Trump. Both the developer and Mr. Golden were introduced by Rep. Vito Fossella, a Republican from Staten Island.
Mr. Trump said he could save the U.N. the cost of its backup plan to the swing space - renting commercial space in Manhattan during the renovations - by completing the refurbishment without having to relocate staff.
The U.N.'s recently appointed undersecretary general for management, Christopher Burnham, responded after the hearing via a U.N. spokeswoman: The U.N. would encourage him to bid on the project.
Mr. Burnham, an American, represented the world body at yesterday's hearings. He promised that the renovation would be run on the up-and-up. You can rest assured I'm going to run a lean operation, Mr. Burnham said, citing his past experience and integrity as a top financial officer for the State Department and in the private sector.
Mr. Burnham has, among other posts, served as the treasurer of the state of Connecticut, and his departure from the position in 1997 prompted criticism from the state's Democrats and ethics commission over a possible conflict of interests. According to a New York Times report, Mr. Burnham vacated the job to become president and chief executive officer of Columbus Circle Investments in Stamford, Conn. The firm had been hired 14 months earlier to manage $150 million in pension funds for the treasurer's office.