- The Washington Times - Friday, August 23, 2002

NEW YORK U.N. officials are privately circulating a $1 billion proposal to renovate the iconic but deteriorating U.N. headquarters on New York's East River and build a 30-story office tower on an adjacent property.
It is not yet clear how the organization would pay for the four- to six-year construction project, although most of the burden is likely to fall to U.N. member states.
U.N. officials propose building a new office tower on a playground just south of 42nd Street. That building would be used to house displaced U.N. staff while the landmark headquarters building is gutted and renovated, according to the closely guarded report obtained this week by The Washington Times.
After the renovation is complete and staff move back in, more than a dozen U.N. agencies, offices and programs now scattered around town could move from expensive rented space into the 30-story tower.
The Capital Master Plan has been in the works since 1999. But the current version, which will be presented to the General Assembly in mid-September, is the most comprehensive, ambitious and at $1.3 billion expensive proposal yet.
"The CMP will provide a one-time opportunity to bring the headquarters complex into the future," says a draft of the report.
The glass-and-marble Secretariat Building was constructed in 1949, before computers or terrorism or high energy costs. Today, many of its systems are obsolete, and maintenance is becoming difficult and disproportionately expensive.
Those costs are borne by all member states, with the United States paying just over one-fifth of the total.
"The findings of the design-plan process confirmed that a fundamental refurbishment was required to bring the headquarters complex into compliance with safety, fire and building codes, and to meet modern energy-efficiency standards and security requirements," says the draft report, which was prepared by the U.N. Department of Administration and Management and the office of Central Support Services.
Key U.N. officials yesterday either were on vacation or declined to comment on the proposal until it is presented to member states next month. However, the draft report has been circulating around U.N. offices and member governments for at least two weeks.
The document outlines three options for renovating the 50-year-old headquarters:
Vacate the building and completely renovate it from the basement to the roof.
Empty five to 10 floors at a time and perform the most invasive construction at night and on weekends.
Keep repairing things as they break and absorb the spiraling maintenance and energy costs.
The report clearly favors the most ambitious proposal, which could cost up to $1.3 billion with all the optional structural, environmental and security innovations. The new building would be needed only if that option is chosen.
The most expensive option, in the long run, would be to do nothing, according to the report. Utilities and repair costs could top $2 billion over 25 years and still leave the building with crumbling masonry and antiquated systems.
The Capital Master Plan has been under discussion for nearly three years, even as diplomats dodge the scaffolding and paint buckets that have become ubiquitous around the ground floors and conference areas.
For the United Nations, the key question is how to pay for the repairs, which will run to hundreds of millions of dollars no matter which option is chosen.
U.N. officials are hoping somewhat unrealistically, they acknowledge that a government, foundation or billionaire will step forward with an interest-free loan as the United States did in 1949 to finance the original construction.
Failing that, they are hoping for a new and separate assessment of dues from governments willing to shoulder the extra expense.
A final option is for the organization to seek permission from the General Assembly to float public bonds or borrow the money at commercial interest rates.
The U.S. General Accounting Office in June 2001 recommended a comprehensive overhaul of the Secretariat Building but left it to the State Department and Congress to determine how large a financial commitment Washington should make.
Despite its sometimes wobbly financial condition, experts say the United Nations could get a highly favorable AA rating based on the overall financial health of the member governments themselves.
The catch there is that nations would have to agree to service the debt before paying anything else out of the regular budget.
The renovation should not affect U.N. peacekeeping operations, which are funded out of a separate budget.
The Capital Master Plan stresses that whichever path is chosen, members must act soon. Every year of postponsed construction adds 3 percent roughly $50 million to the cost, according to the report.
Among the most urgently needed improvements is the repair or replacement of the building's distinctive glass walls, which leak heat and cool air as well as water.
Asbestos, lead paint and PCBs must be removed, and fire alarms and sprinklers must be installed.
New electrical and mechanical systems must be installed for everything from air conditioning and heating to communications and data storage.
Security measures alone will cost at least $77 million up from an estimate of $22 million before September 11.

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