Secretary-General Urges United Nations To Abandon 'Swing Space' Plan

By Meghan Clyne 
May 11, 2005
Gotham Gazette
Original Source: http://gothamgazette.com/community/4/news/1581
The secretary-general, Kofi Annan, is recommending that the United Nations abandon its plans to use a proposed 35-story building, to be constructed over a neighboring city park, as temporary relocation facilities while the world body renovates its Turtle Bay headquarters.
The 900,000-square-foot swing space would have been built over Robert Moses Playground by the United Nations Development Corporation, a city-state entity, to house the world body's offices during a planned $1.2 billion renovation of the Secretariat and other facilities. The proposed cost of the swing space and an esplanade park, offered as mitigation to replace the playground, is $650 million.
The project was frozen in early December, however, when the state Senate declined to take up the first piece of legislation that would have been required to approve the United Nations' use of the park for the construction. The Senate leadership has shown no indication of reversing its decision, and the delays have imperiled the building's fate to the point that the United Nations says it could be ready no sooner than 2010.
For the purposes of the U.N. renovations, that's too late. A report issued to the General Assembly yesterday said: the Secretary-General believes that owing to the current poor condition of the United Nations Headquarters complex, as well as the uncertainty regarding the approval and timely construction of UNDC-5, the Organization should proceed with leased space in the New York City area and should proceed with an on-time refurbishment start date of 2007. UNDC-5 is the U.N. term for the Moses building.
In search of options for that leased commercial space, the United Nations, in coordination with a city real-estate consultant and the city's Economic Development Corporation, has reviewed more than 100 properties. One, as reported Monday by the Financial Times, is 7 World Trade Center, which a U.N. spokeswoman, Marie Okabe, confirmed U.N. officials visited this week.
As The New York Sun reported in December, the United Nations rejected previous offers of space at ground zero, citing the difficulty of the commute that Midtown-based diplomats would face.
There is no mention of Lower Manhattan swing-space options in the secretary-general's report. A Midtown Manhattan temporary building, how ever, is identified, and described as one property in Manhattan that would meet U.N. office-space needs and be accessible to the headquarters.
The only site that would fulfill U.N. requirements for both office space and conference space is part of a larger development in downtown Brooklyn, the report said.
It consists of both office space, some of which could be occupied as is, and space that the developer would build out to accommodate conferences, the report said.
Some U.N. observers have speculated that the site is part of developer Bruce Ratner's Atlantic Yards project, which would bring an arena for the Nets basketball team and office, retail, and housing space to the Brooklyn Navy Yards and adjacent properties.
Brooklyn would present the least expensive temporary facilities for the United Nations, according to the report, which estimates the cost of that option at between $211 million and $220 million. The Midtown Manhattan site would cost between $266 million and $275 million.
Sticking with the Robert Moses swing space - which carries a projected price between $362 million and $367 million - would be the costliest option, even accounting for the U.N. officials' expectation that the world body will not pay taxes in occupying the space, according to the report.
The president of the United Nations Development Corporation, Roy Goodman, a former state senator from Manhattan's East Side, said the city-state entity was not involved in U.N. scouting of Atlantic Yards or 7 World Trade, or in helping the United Nations locate alternatives to the Robert Moses swing space, which the UNDC is still lobbying Albany to agree to.
Yet neither has it discouraged the United Nations from pursuing other swing-space options, Mr. Goodman said. Regarding the long-term prospects of the Robert Moses building, he said: We'll be working assiduously on the matter of the consolidation building.
In addition to serving as temporary offices during the U.N. renovations, UNDC-5 would, according to proposals, be used after the refurbishment to house U.N. staff currently scattered around the city. Thus, even if the General Assembly were to scrap plans to use the Robert Moses edifice as swing space, the building could still present a unique opportunity for the United Nations to accommodate its long-term needs, the secretary-general's report, which recommends that the world body continue to support the UNDC in seeking approval for the use of Robert Moses, said, because such a consolidation is in the long-term best interest of the Organization.
The report recommends continued support for the UNDC in seeking approval for the Moses building, even while acknowledging that the UNDC's economic plan makes the overall project only marginally favourable.
The United Nations currently occupies two other UNDC buildings in Turtle Bay, UNDC-1 and UNDC-2, at favourable rental rates that expire in 2023, the earliest UNDC-5 could begin to yield savings for the world body, according to the secretary-general's report. The break-even point for the building, the report states, could come as late as 2043.
If the benefits to the United Nations of consolidation are to be realized, further negotiations with the UNDC need to be conducted, the report said.
A spokesman for the Economic Development Corporation, Michael Sherman, said: We hope to get the state legislators to move forward on the legislation. ... This is an important project for New York City, and we fully expect it to move forward.
The report was presented as an addendum to the Capital Master Plan, the U.N. term for the renovation and expansion project, and set forth the secretary-general's recommendations to the General Assembly as the body prepares to deliberate the expenditures associated with the project. The U.N. Advisory Committee on Administrative and Budgetary Questions is scheduled to take up the Capital Master Plan on Monday, and it is to be debated in the General Assembly's Fifth Committee, which handles the body's administrative and budgetary matters, May 23. If approved by both committees, the expenditure would then require the approval of U.N. member states.
The central question faced by those member states is whether to authorize Mr. Annan to accept America's offer of a $1.2 billion, 5.54% interest, 30-year loan for the purposes of the renovation. The United Nations had initially anticipated that America would provide the loan interest-free and held out for lower-interest financing options for the project. The report, however, states the secretary-general's findings that America's offer, which expires September 30, beats market rates and presents the best financial option. Mr. Annan recommends that the world body accept the financing proposal, which, accounting for the total principal and interest repaid over the life of the loan, will cost the United Nations $2.511 billion, according to the report.
Actually obtaining the $1.2 billion, however, is contingent on congressional approval. As the Sun reported in March and April, however, members of the House and Senate have begun to question the loan's amount, and whether America should provide any financing to the United Nations in light of the recent scandals that have plagued the world body. Some in Washington have urged that America's contributions to the project be made contingent on greater scrutiny of the construction, or have asked that the total amount of the contribution be capped at lower levels.
If the state of the funding for the Capital Master Plan remains uncertain, it has not kept the United Nations from spending $18 million on planning and preparation through the end of 2004, according to the report. The report anticipates that another $25.3 million will be spent this year, and that the total cost of planning and design will amount to $51.5 million through 2006.