FIFTH COMMITTEE HEARS PROGRESS REPORT ON CAPITAL MASTER PLAN TO MODERNIZE UN HEADQUARTERS IN NEW YORK

Fifty-eighth General Assembly                              

Fifth Committee                                            

45^th Meeting (AM)

Fifth Committee Hears Progress Report on Capital Master Plan

To Modernize UN Headquarters in New York

Construction of New Building Could Begin in Late 2005

The Fifth Committee (Administrative and Budgetary) this morning was presented with a progress report on the Capital Master Plan for the refurbishment and modernization of the United Nations Headquarters in New York.

The plan was approved by the Assembly in December 2002, when, by the terms of its resolution 57/292, it expressed concern over the hazards and deficiencies of the current United Nations buildings and endorsed modernization of the existing complex and construction and lease purchase of a new United Nations building south of 42nd Street.

Briefing the Committee, Under-Secretary-General for Management, Catherine Bertini, said that subject to resolution of various legislative and security approvals, the United Nations Development Corporation (UNDC) hoped to begin construction of a new building on the corner of First Avenue and 42nd Street late in 2005.  The Secretariat was trying to accelerate that date, if possible.  [The UNDC is a not-for-profit public benefit body created by the New YorkState legislature in 1968, with the support of New York City, to provide space and facilities for the United Nations community in New York.]

The Capital Master Plan in all its aspects would be considered during the fifty-ninth session, when she hoped to present to the Assembly a number of options for the financing of the project, she said.  Key decisions later this year would be critical to timely implementation of the Plan.

The Secretariat continued to talk with the host Government and members of Congress regarding an interest-free loan from the United States, which still required congressional approval.  [On 16 March, the United States representative submitted to the Fifth Committee his country’s provisional proposal for a $1.2 billion loan at 5.54 per cent interest for a maximum period of 30 years.]  Meanwhile, the Organization was also looking at several other funding options, which included a 25-year or shorter repayment period to the host Government, which would lower the total cost.

Also under consideration were nine additional scenarios -– all within the parameters of the current host country’s proposal -- involving various disbursement rates, grace and time periods.  All those options could be adopted in response to a formal United States offer.  Other possibilities related to the use of the United States offer as a guarantee against borrowing money from the private sector and giving Member States such opportunities as payment of their total assessment up front, thus avoiding any interest.

Turning to funding, she said that each of the three components of the Capital Master Plan would be funded differently.  The refurbishment of the United Nations complex was the responsibility of the Member States and would be handled by assessments.  The Secretariat also hoped to offer Member States the opportunity to fund the refurbishment of specific conference rooms.  The new building (DC-5) would be financed separately through the sale of bonds by the United Nations Development Corporation.  That would not require any other cost to Member States.  The rent that the United Nations would pay to the UNDC for building during the Plan was included in the $1.2 billion Plan cost.  The major focus for the new Visitors’ Centre would be on the private-sector financing through various United Nations Associations.

Now that there was a better sense of possible options, she would soon be recommending to the Secretary-General the appointment of an Advisory Board for the Capital Master Plan, she continued.  Many of the issues would be “coming together” by late summer, and she expected to propose a range of funding modalities to the Assembly in the fall.  By that time, she also hoped to have more solid negotiations, if not decisions, from the City and State of New York on the prospects of using the space on the corner of First Avenue and 42 Street for the new building and from the United States Congress about the pending proposal requested by the United Nations Development Corporation for the bond financing scheme for that facility.  The UNDC had signed a contract with a renowned architect, Fumihiko Maki, for the design of the new building, supported by a New York firm, Fox and Fowle.  It had also initiated a security assessment of the new building.

Reports had also been prepared on the proposed new mid-sized meeting rooms and additional parking capacity.  Those documents would be considered during the fifty-ninth session.

Following the presentation, representatives of Ireland (on behalf of the European Union), United States, Canada, Japan, United Republic of Tanzania and Nigeria took the floor, welcoming the information provided and asking questions on the details of the project.

Responding to questions from the floor, Ms. Bertini reiterated that on the issue of DC-5, the proposal was to finance the building by the sale of bonds.  To begin that process, a legal commitment from the Assembly was needed that the Organization would pay rent for the building.  The corner of 42nd Street and First Avenue was officially designated as park space.  New York City and State had to pass legislation to take it off the rolls as park.  That was one reason why the initial plans contained a proposal for an esplanade as a trade-off for the public for the lack of that space.

She also clarified that discussions with community groups continued on the matter.  However, the Councilwoman for the neighbourhood supported the Plan, and the Mayor was very excited about the project.  Alternative space had not been explored, as it was unlikely that the legislature would not pass.

John Clarkson, Officer-in-Charge of the Capital Master Plan, responded to a question on the lease purchase.  He said the agreement between the United Nations and the Development Corporation was that the Organization would lease the space for 30 years, at which time it would have the option to buy the building for a nominal fee of $1 dollar.  If it paid the bonds off early, it could own the building before the 30 years.

The Committee will continue its work at 10 a.m. tomorrow, 21 May, when it is expected to take up the financing of peacekeeping missions in Liberia and the Democratic Republic of the Congo.

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