Mayor May Revive a Scheme To Get U.N. More Space in City

Benny Avni
February 13, 2007
New York Sun
Original Source: http://www.nysun.com/pf.php?id=48514

While sources say Mayor Bloomberg wants to revive a plan to erect a new building in an effort to avert what he calls the disaster of losing the United Nations to another world city, such a building could act as an aid for city developers to regain possession of lucrative office space currently leased cheaply by the world body, sources said.
On a visit to Washington yesterday, Mr. Bloomberg expressed concern about the United Nations leaving New York. According to several sources, the mayor intends to revive an old plan to build a swing space to house U.N. offices while its headquarters undergoes an ambitious $2 billion renovation. U.N. officials, however, say they have no current plan to leave the city. And many business and U.N. sources familiar with the issue say the aim of several real estate developers is not to help the United Nations but to make a Midtown office building more profitable.
The United Nations and several of its agencies currently lease part of the U.N. Plaza Hotel building on 45th Street and First Avenue at well below market rent. If the world body vacates the space, it could be renovated and sold for nearly $500 million — half of it net profit for a lucky developer.
For that to happen, however, the United Nations needs to be persuaded to give up the space. One proposal is to move the offices currently in the space to a new building in Long Island City, Queens, across the East River from the landmark U.N. building. Staffers could be ferried easily to and from the United Nations.
Before a meeting with Secretary of State Rice yesterday, Mr. Bloomberg told reporters that he hoped she could help him keep the world body in the city.
Foreign diplomats and their financial contribution to local businesses would not be there if the United Nations wasn't in New York City, and to lose the United Nations would be a disaster, the mayor said.
City planners reportedly believe that the state legislators who rejected an earlier plan to erect a building for the United Nations in an open space at Robert Moses Park on 42nd Street may drop their resistance. Opponents of the plan have softened their stance since last year's elections, which changed the power structure in Albany, aides to Mr. Bloomberg believe.
But Senator Martin Golden, a Republican of Brooklyn who led the opposition to the plan, told The New York Sun, I don't think anything currently happening at the U.N. could make us change our mind.
For their part, U.N. officials say the time has passed for the Robert Moses Park plan, and that their current renovation proposal does not include a permanent swing space. The officials, who requested anonymity, also said they doubt such a space could be built before the start of the renovation this year, which is scheduled to wrap up by 2014.
Mr. Bloomberg's reported plan to revive the swing space idea has nothing to do with the capital master plan to renovate the United Nations, the spokesman for the plan, Werner Schmidt, told the Sun. The United Nations is now planning to renovate 10 floors at a time. A temporary conference space will be built on the U.N. campus, and while their offices are being renovated, staffers will be moved to a rented space in East Midtown, Mr. Schmidt said. He added, however, that the rent for the temporary new class B offices will certainly be higher than what the United Nations pays for its space in the U.N. Plaza Hotel building.
Real estate developers have long eyed that building, which the United Nations, the U.N. Development Program, the World Food Program, and the Office for the Coordination of Humanitarian Affairs, among other U.N. agencies, have occupied for several years.
The organization's long-term lease at the building will not expire before 2025. The United Nations currently pays $25 a square foot for the space, while similar offices in the neighborhood fetch $60 a square foot on average.
One real estate source who crunched the numbers said recently that the United Nations' 320 square feet of offices could be renovated and sold as condominiums for $480 million. The net profit for the developer, according to the source, who spoke on condition of anonymity, would be $220 million. The stumbling block for such a plan is persuading the United Nations — which currently enjoys a dream arrangement, as one U.N. source described it — to give up its lease, and the renewed talk about the Robert Moses Park swing space plan may be connected to such an effort.
But as the Sun earlier reported, the park's location above the Midtown Tunnel presents a major security risk. And building on a public park requires the approval of legislators in Albany, another challenge.
Long Island City, on the other hand, is an area City Hall is interested in developing, and its proximity to the current U.N. campus could make it an attractive option for U.N. planners.