FoxNews.com  |  November 3, 2011

U.N.'s $2 Billion Building Binge: Getting Worse While It Lobbies for $3 Billion More

By George Russell

United Nations Building in New York City.

With a $2 billion renovation of its New York headquarters building still more than two years from completion, the United Nations is already lobbying member states for some $3 billion or so for additional major building projects in New York City and Geneva.

About $2.4 billion of the total would go for construction of a new office tower in Manhattan to accommodate the world organization's burgeoning staff. Another $590 million or so would go for yet another mammoth renovation job -- this one of the U.N.'s venerable offices in Geneva, located in the one-time home of the ill-fated League of Nations.

And those hefty figures, gleaned from documents presented to this year's General Assembly, are only early estimates -- and when the U.N. is involved, early building estimates are far more likely to go up than down.

The cost estimate for the U.N.'s ongoing headquarters refurbishment in Manhattan, for example, has climbed roughly 225 percent from its initial estimate of $875 million. And the price hikes there are far from over, as the U.N. tweaks and re-tweaks parts of the project.

An end-of-year analysis of the headquarters renovation project by the U.N.'s independent Board of Auditors warned that "the Board cannot provide assurance on the accuracy of the forecast costs to complete the project."

In fact, the auditors foresaw at least another $227 million in cost increases for the current headquarters renovation, and predicted that "this situation is more likely to worsen than improve."

One reason for the continuing U.N. push for a global building boom is that whatever austerity the rest of the world faces, the world organization expects its headquarters staff to keep growing -- at a steady 1.1 percent rate annually over the two decades ending in 2034, according to a U.N. study.

That would add 3,000 people in New York City alone who will require nearly 1.9 million square feet of additional space -- hence the desire for yet another additional U.N. tower.

Meantime, its badly aging facilities in Geneva -- some of them 70 years old -- must also accommodate more staff, though the U.N. hopes to do more there through re-jigging its antiquated existing spaces.

Whether the U.N. will get the money it says it needs to accommodate the ongoing bureaucratic bulge is another matter entirely.

The financially hard-pressed score or so nations that put up most of the money for the U.N.'s building plans -- led by the U.S., which is paying 22 percent of the current Manhattan renovation bill, and would likely be dunned the same way for any new building plans -- are already starting to squirm over the likely size of the tab, not to mention the New York City renovation bill they are already paying.

And with reason: the U.S. share alone of the new proposed building costs could run to $660 million or more.

And the U.S. portion of the U.N. refurbishment that is already under way is still growing, too. In addition to 22 percent of the estimated $2 billion cost so far, the U.S. has ponied up $100 million for additional security measures for the midtown Manhattan campus.

But there is more: An additional U.S. share of other cost overruns caused by extensive re-tweaking of the Manhattan renovation, and a 22 percent chunk of a nebulous category known as "associated costs, for outlays that include everything from a $40 million broadcast center that the U.N. wants to install to $44 million for new furniture. Total bill for the associated costs is so far estimated at about $146 million.

Moreover, U.N. overseers of the project still keep changing their minds, leading to literally hundreds of "change orders" that continue to affect... more here.