Expansion Project Has U.N. Board Concerned Over Personal Liability
BY MEGHAN CLYNE - Staff Reporter of the Sun
April 8, 2005

As the president of the United Nations Development Corporation prepared to make a last-ditch appeal to the majority leader of the state Senate on behalf of the U.N. expansion project yesterday, directors of the corporation sought to protect themselves from personal financial liability for the planned building.
At a meeting of the city-state entity's board yesterday morning, held at its offices at 2 U.N. Plaza in Manhattan, directors also discussed the uncertain fate of the project, and the corporation's role in it.
The United Nations plans an overhaul of its headquarters in Turtle Bay. During the renovation, officials of the world body hoped to move its entire staff out of the Secretariat and other facilities into a 35-story addition to its complex, to be built by the UNDC on the site of Robert Moses Playground, a city park neighboring the U.N. compound.
Opposition to the project, not least from state legislators, has delayed the construction to the point at which it is unclear whether the United Nations and the UNDC can proceed with construction of the 900,000-square-foot tower, for which they need approval from Albany.
The chairman of the development corporation, George Klein, likened the situation to a young man proposing to a beautiful woman and all of a sudden the in-laws and cousins start to interfere, referring to the relationship among the United Nations, the development corporation, the Bloomberg administration, and others - including lawmakers in Washington and Albany - who have weighed in on the project.
Of those in-laws and cousins, Mr. Klein said: I assume they all mean well. Only God knows what's in their hearts.
The time for extended-family deliberations and antics, however, has expired, in his view. We've come to the point where we're either going to get married, or we're not, Mr. Klein said.
The president of the UNDC, Roy Goodman, expressed confidence, however, that the figurative nuptials would take place, announcing that he was having lunch with the state Senate majority leader, Joseph Bruno, after the meeting in hopes of cementing the compact. Mr. Goodman was for years a Republican colleague of Mr. Bruno's in the state Senate. Last December, the majority leader shelved legislation that is needed for the process of swing-space construction to begin.
Mr. Goodman said the Senate and the Assembly would revive and approve that legislation after their work on the state budget is finished, which he suggested would take place next week.
The stalled legislation would set the construction process in motion by approving a land-use review, though it would not approve the use of Robert Moses Playground for the new U.N. building. That would require further legislation in Albany, in addition to the blessing of the City Council. Mr. Klein said that if the Legislature approved the land-use review now, the second legislation could be approved in July or August.
The sponsor of the current bill in the Assembly, Steven Sanders, a Democrat who represents the United Nations area, suggested, however, that the UNDC was getting ahead of itself. According to Mr. Sanders, it would take at least six to nine months to complete the review process.
Furthermore, if the first legislation is not approved within the next eight to 10 weeks, it is unlikely to be enacted this calendar year, Mr. Sanders said in a phone interview with The New York Sun.
The assemblyman also said he was unaware of any changes in the Senate's position on the bill. For his part, Mr. Sanders has said he will not re-introduce the legislation in the Assembly until there is clear indication it would pass in the Senate.
A spokesman for Mr. Bruno, Mark Hansen, suggested that the fate of the legislation was still pending, despite Mr. Goodman's optimism. Although Mr. Bruno met with members of the UNDC earlier in the year - including, as the Sun reported, Mayor Bloomberg's sister, Marjorie Tiven - Mr. Hansen said of the U.N. legislation: There are a handful of outstanding issues still being worked on.
There is a continuing dialogue with the UNDC, and I cannot speculate as to what may or may not happen, he added.
One of the Senate's staunchest opponents of the U.N. expansion, Martin Golden, a Republican of Brooklyn, said he was unaware of any new discussions with the U.N. about the fate of the legislation and the swing space.
His position on the legislation, he added, hasn't changed: If Kofi Annan steps down, I vote for it. Mr. Golden has maintained that he will not support the physical expansion of the United Nations in New York as long as Mr. Annan remains secretary-general.
If the UNDC board expressed confidence yesterday that it would receive good news from Albany in the coming weeks, some directors seemed tremulous about personal liability for potential terrorist attacks and other disasters that might befall the planned building at the playground and the corporation's current holdings at U.N. Plaza.
At the beginning of the meeting, Mr. Klein, who in private life is a developer, explained the need to increase the corporation's liability insurance, because U.N. facilities, he said, are a confirmed terrorist target. In the event of a catastrophic loss of life or property resulting from damage to a UNDC-owned and -managed building, it was conceivable the corporation could be slapped with lawsuits from parties alleging the UNDC had not taken sufficient precautionary measures, he said.
A private-sector lawyer appointed to the corporation's board by Governor Pataki, Elizabeth Factor, then expressed concern that members of the UNDC could be held individually liable in the event of such lawsuits, exposing their private assets to litigation.
She requested that the corporation pursue for its members the type of indemnification enjoyed by public officials, who, for the most part, cannot be held personally liable for their public work. Indemnification also usually includes access to legal counsel at taxpayer expense.
Mr. Goodman said that since Al Qaeda does target the U.N. as a high-profile priority, it was important to protect the corporation's directors from the vicissitudes of second-guessing lawsuits, and thus spare them possible inconvenience. Mr. Goodman and the corporation instructed its counsel, Jonathan Mechanic, to pursue indemnification for directors of the corporation.
As the Sun reported in January, the UNDC seeks to erect the new building atop a known terrorist target, the Queens-Midtown Tunnel, which runs directly beneath Robert Moses Playground.